Whatever happened to Murphy’s ‘state bank’ idea? It’s getting new push
It was perhaps Phil Murphy’s most unique proposal made as a candidate for governor: the establishment of a state-run public bank.
It hasn’t yet gone anywhere in his first nine months in office, outside of a committee hearing with two invited speakers and a bill introduced in the Senate – and all of that happened back in January.
With a new policy brief published Thursday, New Jersey Citizen Action aims to give it a push.
NJCA executive director Phyllis Salowe-Kaye said approval of the state budget took up a lot of attention but that she believes momentum on the issue is heating up.
“We’re not unhappy. Look, Gov. Murphy is the only governor in this country who has put out there the concept of a state bank since a hundred years ago, when North Dakota(’s bank) was established,” Salowe-Kaye said.
North Dakota remains the only state with a government-owned public bank.
As envisioned in New Jersey, the bank wouldn’t have retail branches. It could use state deposits of tax revenues to provide low-interest loans for public infrastructure, affordable housing, small businesses and students, as well as retirement savings accounts to private-sector workers without them.
“What a bank would allow the state to do is fund those things through its own resources and recapture of a lot of the money that’s currently being paid out to owners of the state’s bonds,” said policy analyst Karl Beitel of Harvey M. Rose Associates. He helped research the report.
Urban revitalization consultant Pat Morrissy said a state bank would be beneficial for implementing the economic proposals Gov. Phil Murphy unveiled Monday. The bank was not included in Murphy’s nearly 60-page economic plan.
“In order to make his economic plan work, he’s going to need a box of financial tools,” Morrissy said. “We believe that this is one of the most powerful financial tools for directing low-cost capital to those challenges. We think it’s just obvious.”
One of the ways in which Murphy’s public bank concept is mentioned in the Statehouse is speculation that it could become a banking option for legal marijuana businesses who have trouble using federally chartered banks for deposits and financing.
The Citizen Action report doesn’t address that, in part because adult-use marijuana hasn’t yet been legalized. But Beverly Brown Ruggia, NJCA’s public bank project coordinator, said it’s something to discuss.
“It’s a possibility,” she said. “To the extent that we want the bank to be involved in supporting small business – you know, that, yes.”
Assemblyman John McKeon, D-Essex, recently proposed legislation, A4510, that would establish a state bank for handling of marijuana-related funds.
The report does suggest using the state bank to direct some marijuana tax revenue to social benefit projects.
“We would like to see the money directed through the bank to social projects that benefit communities that were disproportionately and most negatively impacted by the historically unjust policies related to the prohibition,” Brown Ruggia said.