Pollina to push state bank idea

Anthony Pollina, a Washington County Progressive, Democrat and Working Families senator, wants the state to try again at looking at the possibility of a state bank.
Currently, the vast majority of incoming tax money or federal money the state receives goes to TD Bank, which earns a profit and charges fees, Pollina says. Through a state bank, which would use existing local banks or a state agency like the Vermont Economic Development Authority, the state could earn interest and use the money to re-invest in businesses or student loans, advocates say.
In 2010, a preliminary analysis by the Vermont Legislative Joint Fiscal Office wrote the system has a number of potential long-term benefits, but it would likely have a complicated and controversial transition.
Committee hearings have gathered testimony about the possibility, but banking representatives have opposed the measure.
A bill to study the issue was introduced last year by Pollina and Chittenden County Sen. Ginny Lyons, a Democrat, but the proposal ultimately was tabled.
Pollina said during an interview last week a state bank would work in partnership, rather than competition, with banks. He also said he believes that public support is more receptive now than it was two years ago.
He also said the University of Vermont’s Gund Institute for Ecological Economics has supported the idea.
A fellow with the institute, Gary Flomenhoft, was part of the legislative testimony on the issue.
He’s suggested the North Dakota state bank was a key part in the state having a budget surplus after the 2008 stock market crash when other states came out with deficits. He’s pointed to how in 2009 the North Dakota state bank returned $30 million to the state based on investments.
A conference from 9 a.m. to 4 p.m. Dec. 7 at Vermont College of Fine Arts in Montpelier has plans to discuss the issue of state banks. The conference, called Vermont’s New Economy, costs $25. Attendees can register at global-community.org/cgi/gc/neweconomy/.
Pollina is also working to draft a bill for another study group to try to undo declining state funding to state colleges for the cost of college education.
The state currently funds about 12 percent of the cost, Pollina said. In 1980, state funding paid for about half, and tuition covered the rest, he said.

2 Responses to Pollina to push state bank idea

  1. Pingback: “State Bank” a Recipe for Cronyism — True North Reports

  2. I can’t help but immediately think that an organization like VSAC could be a good pick for this. It would shore up their base and allow them to diversify from the student only funding that has scaled back due to changes at the Federal level. Makes sense that they would have in place a system of applying for and awarding grants or lending funds that could be adapted to do businesses in a very ‘non bank’ kind of way.