On the first Tuesday of March, communities across Vermont hold town meetings at which they elect local officials, approve the coming year’s budget and vote on measures announced in advance.
This week, 19 Vermont cities and towns voted on a measure calling for the Vermont Economic Development Authority, a statewide finance lender created in 1974, to be turned into a public bank. Fifteen approved the notion.
In January, state Sen. Anthony Pollina (D) and five other progressive state lawmakers had introduced legislation to advance the proposal. Senate Bill 204 would direct the state government to deposit 10 percent of its unrestricted funds in a public VEDA bank, which could then leverage the money in the same manner as private banks do.
The Senate legislation would:
(1) create statutorily the 10 Percent for Vermont Program within the Vermont Economic Development Authority for the purpose of establishing a banking system owned, controlled, and operated by the State of Vermont;
(2) amend the statutory authority of the Vermont Economic Development Authority to permit it to engage in the business of banking; and
(3) direct the State Treasurer to transfer 10 percent of the State government’s cash reserves to the 10 Percent for Vermont Program for initial funding.
The pilot program would partner with local private banks to offer loans and boost economic development "by increasing access to capital for businesses in the State,” according to the legislative text. VEDA is currently financed by legislatively appropriated funding, bonds and other means.
A companion bill, HB 627, has been introduced in the state House.
Also in January, a report by Vermonters for a New Economy -- a coalition of state groups, businesses and individuals backing the initiative -- concluded that the creation of a public bank could create 2,535 new jobs in Vermont, $192 million in Gross State Product and $342 million in increased state output.
According to Vermont Public Radio, the following towns voted for the proposal: Bakersfield, Craftsbury, Enosburg, Marshfield, Montgomery, Montpelier, Plainfield, Putney, Randolph, Rochester, Royalton, Ryegate, Tunbridge, Warren and Waitsfield. The communities of Marlboro, Barnet, Fayston and Greensboro rejected the measure.
The only state to currently operate a public state bank is North Dakota. Twenty other states are considering a similar banking reform.