California’s local governments face a range of challenges, including increased needs and revenue shortfalls, which have been exacerbated by the COVID-19 pandemic. As a result, many local governments have been forced to cut critical services such as schools and food programs, and to devote a larger portion of their budgets to public health. These limitations disproportionately harm communities of color and poor communities.
By providing municipal governments with inexpensive depository services and cash management, as well as additional funding, California’s public banks can help to alleviate some of these challenges. This funding can help to supplement government spending and free up money for the crucial services that are so vital to the well-being of local communities. Overall, California’s public banks have the potential to be a valuable resource for local governments, helping to support the needs of the community and ensuring that essential services are available to all.
THE LOS ANGELES PUBLIC BANK WILL CREATE CLEAN JOBS FOR THE COMMUNITY
Small and medium-sized businesses play a vital role in driving economic growth in Los Angeles. By working with local financial institutions, such as community banks, credit unions, and community development financial institutions, the LA public bank will have the opportunity to provide these businesses with access to capital, helping them to develop and scale. By screening for standards set by unions, public banks can also help to bolster wages and promote a more equal distribution of power to working people. A public bank can be a valuable resource for small and medium-sized businesses, supporting their growth and development and helping to strengthen the local economy.
THE LOS ANGELES PUBLIC BANK WILL PROVIDE STABLE FINANCING
A public bank can provide an alternative to traditional financial institutions by accepting deposits and handling banking services for local governments and agencies. This can allow cities like Los Angeles to move our money away from Wall Street banks, which often prioritize shareholder profits and finance activities that many local governments have voted to divest from. By choosing to bank with public banks, these institutions can enjoy more customized services at a lower cost, while also keeping their money local and aligning their values with their financial decisions. This can be a win-win situation, enabling the City of Los Angeles and agencies to better meet their financial needs while also supporting the local economy and promoting their values.
THE LOS ANGELES PUBLIC BANK WILL CONTRIBUTE STRONG ECONOMIES
Local governments in California currently pay hundreds of millions of dollars in interest to private banks each year, even as these banks continue to be profitable and reap huge rewards. A significant portion of the cost of infrastructure projects, nearly 50%, goes towards bank fees and interest. By depositing tax revenues in a public bank, the City of Los Angeles can significantly reduce these costs, potentially cutting infrastructure creation and repair costs in half.
Public banks have the unique ability to leverage capital up to ten times, meaning that every dollar deposited represents up to ten dollars available to loan. This can provide a valuable source of funding for a wide range of projects, including affordable housing, climate change infrastructure, and smaller initiatives such as keeping illegally dumped trash off the streets or building a basketball court for underserved teens. By providing access to these funds, a public bank can help Los Angeles to meet the pressing needs of our communities and make a positive impact..