Senator Reuven Carlyle explains why he voted against the McCleary deal: the entire burden is placed on the middle class

Video: Sen. Carlyle’s McCleary Floor Speech


Reuven Carlyle explaining his opposition to the McCleary deal

(Excerpts)

70% of low income people in King County are going to see a tax increase.
There is a perception that this is about taxing rich folk in the big cities [but it’s not so].

There is not one business in this state that does not win in terms of lower taxes in this deal. And the middle class is going to feel it deeply and seriously.

The entire weight, the entire obligation, the entire bill is being sent to the middle class, seniors, working folk, renters, and so many others. We have lots of people who are, effectively, house rich and cash poor because we’ve had an explosion in the past 10, 15 years of value in homes.

To put all of that burden, in a state with the most regressive tax system in the nation, all of the burden, exclusively on the middle class . We’re better than this. We could have made it fair, we could have made it equitable, and we could have made it widespread.

We haven’t closed any tax breaks of meaningful size. We haven’t done anything. We haven’t asked anyone else [other than the middle class] to contribute. Hundreds of millions of dollars in business taxes will be reduced. Hundreds of millions in this deal. And yet a retired grandma in Ballard will see 100s of dollars of increase for a home she’s lived in for 20 years.

To put that entire bill on that grandma in the middle class is just not right.

This middle class property tax increase is just too much, too high, too unfair, and too narrowly applied.

A tale of two studies: poor research leads to poor findings on minimum wage

Seattle’s economy is booming: construction everywhere, crowded streets and transit, housing costs soaring, bustling neighborhood restaurants, and a 2.6% unemployment rate. Much of this growth is driven by high wage-tech jobs and the spillover effect of all those workers eating out, shopping, and paying premium prices.

It’s in this context that Seattle instituted its higher minimum wage ordinance in 2015. In the past week, two studies have come out with very different conclusions on the impacts of those wage increases on low wage work – one says it’s positive, and the other negative. But the two studies are not created equal.

The first study, led by Michael Reich and Sylvia Allegretto based at the University of California, Berkeley, concludes that the 2015 and 2016 increases to $11 and $13 an hour had the intended effects of raising incomes for low-wage workers without having discernible impact on the number of jobs. These findings are consistent with the bulk of economic studies of minimum wage increases over the past couple of decades.

In the second, a University of Washington team concluded that the 2016 wage increase reduced the number of low-wage jobs by 9% and actually lowered the incomes of low-wage workers. This diverges from the majority of economic research. Across the U.S., city, state, and federal governments have changed minimum wages dozens of times over the past two decades. Multiple economists from across the ideological spectrum have studied these changes, and even opponents of minimum wage increases have not found impacts anywhere near the scale of the UW team.

The UW’s counter-intuitive findings underscore several methodological flaws:

  • They limit their study only to single-site establishments, because their data could not distinguish whether employees of multi-site chains – think Molly Moon’s, Mud Bay, Mod Pizza, Starbucks – actually worked inside or outside the city limits. That leaves 40% of workers excluded from their study. It also means that leaving a job at small business for a job at a larger company counts incorrectly as a job loss.
  • The UW team created a control by comparing Seattle’s employment statistics with other parts of the state. But there is no place in Washington that has a similar economy to Seattle. Seattle has an economy more like San Francisco or New York than Everett or Spokane. The Berkeley team used the more accepted methodology of generating a control from similar areas across the country, rather than just the state. Moreover, the Berkeley team compared numbers for the previous 5 years, while the UW only looked at the previous 9 months.
  • The UW study focused on jobs paying $19 an hour or less, making the assumption that fewer jobs in this bracket meant lost opportunity for workers who used to be in this pay range. But what we’re seeing in Seattle is that jobs that used to pay $18 an hour now pay $20 due to competition for employees. In the UW study, this was unaccounted for and incorrectly counted as job loss.

The quality of a study hinges on the quality of its methods. But the UW study was too myopic in its lens. It eschewed all of the hallmarks of good science – including all the data, equivalent control group, breadth of time. There’s a reason its findings go against what the vast majority of previous studies found: the UW study isn’t as academically rigorous.

If something seems too bad to be true, it probably is.

Originally published at EOIOnline

Republicans work hard to main our regressive tax system that benefits the rich

The perennial brinkmanship that the Republican State Senate engages in on the State Budget can best be seen as a concerted effort to maintain the most regressive state system in the United States. Please see the chart from Money Magazine, hardly a progressive publication. Essentially, every two years, the Republicans fight to maintain a system where the middle 60 percent of us pay four times the percentage of our income in state taxes that the top one percent pay and the poorest Washingtonians pay almost seven times the percentage of their income in state taxes that the top one percent pay.

If you earn $379,000 a year or more in Washington State, you are in the top one percent of earners (source: Economics Policy Institute) and the regressive status quo that Republicans fight so hard to maintain means you pay lower taxes. If you earn LESS than $379,000 a year, the Republican efforts to maintain the regressive tax system in Washington State mean you pay higher taxes than you should.

Let me repeat that: If you earn LESS than $379,000 a year, the Republican efforts to maintain the regressive tax system in Washington State mean you pay higher taxes than you should. Perhaps it is time that Washington voters sent Republicans and tax breaks for the One Percent at the expense of everyone else state tax system packing.

Washington State has the most regressive taxes in the U.S.

Refusal to re-balance taxes hinders schoolkids

It’s day 23 of a second special session in Olympia, since legislators couldn’t agree to a state budget before the end of the regular session. Now they have only 16 days left until the new two-year fiscal term. It will be hard to start that without a budget!

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The cause for delay is a disagreement over how to increase funding for the state’s paramount duty: public education. Republicans have proposed increasing property taxes in cities; Democrats have talked about a carbon tax or a capital gains tax. Gov. Jay Inslee suggests a sales tax on goods purchased online. But none of those measure has enough support to pass.

That leaves us with the status quo — which is convenient for avoiding tough political decisions, but atrocious for our kids and schools. The state Supreme Court ruled in 2012 that the state was guilty of underfunding education. Two years later, the court found the Legislature in contempt for failing to remedy this constitutional violation. And in 2015 the Court imposed a $100,000 per day fine on the Legislature for their failure to act, which now totals $67.1 million.

The Legislature has already put a plan for fully funding education into law, but they haven’t given themselves the tools to fund it. Unable — or rather, unwilling — to remedy that fundamental problem, some are now trying to pretend it no longer exists. Both parties have touted the improvements to education funding in the last few years. But it’s like having a house with a leaky roof, then patting yourself in the back for putting on a new coat of paint: the reality contrasts with the rhetoric.

In terms of quality, Washington’s K-12 schools lag behind 19 states, according to the Education Week Research Center: Massachusetts, New Jersey, Vermont, New Hampshire, Maryland, Connecticut, Wyoming, Pennsylvania, New York, Rhode Island, Minnesota, Wisconsin, Maine, Virginia, Illinois, North Dakota, Iowa, Delaware, and Nebraska. Part of those states’ success is their ability to maintain smaller student-teacher ratios: an average of 13 to 14 students per teacher. Washington has the seventh-worst ratio in the nation, at 19 students per teacher.

The only way to fix that is to hire more teachers. And that requires money. What would it take for our state to have class sizes like the states ahead of us? About $1.35 billion a year — but only if we could attract more teachers at current salaries!

Washington teachers are paid about 10 percent less than the national average, so we’re not attracting new talent. A beginning educator now earns only $35,700, even though the Legislature’s own technical working group recommended a starting salary of $54,000 next year. Raising teachers’ salaries to competitive levels would mean $2 billion a year in new public investments.

The Legislature is not even close to reaching those levels of funding. The core problem is that Washington state relies too much on regressive sales and property taxes, which mean poor and middle-class households pay four to seven times more of their income than those at the top. We can’t generate the revenue we need for public education with an upside-down tax system.

There are some options on the table. State law currently allows the very wealthy to accrue profit through stocks and bonds with no contribution to public good. A person pays no state tax when selling high-end financial assets. A capital gains tax — 92 percent of which would be paid by those with incomes over $600,000 a year — would generate about $700 million per year.

It’s nowhere near enough to cover the more than $3 billion we need to truly build a strong K-12 education system. But it’s a step in the right direction.

In the long run, the only realistic way we’re going to ensure educational opportunity is really a right for all children in Washington — and not a privilege for the lucky few — is with broad-based progressive tax reform that reduces taxes on low- and middle-income families, and increases them on the rich.

So far, our legislators have been loath to tax the wealthy. So we are left with this inconvenient truth: The wealthy are protected while the education of our children is undermined. The kids are not all right!

Original: Everett Herald »

What are we getting out of Boeing’s tax breaks?

As a young girl, my daughter had a fear of flying. She overcame this through a thorough study of airplanes and landed on the 737 as her preferred means of transportation in the air. So naturally, she asked for a Boeing T-shirt for a present. It says, “If it’s not Boeing, I’m not going!”

So let’s talk about Boeing. You might expect that Boeing would treat Everett as the jewel in the crown of its operations. That is certainly what the Boeing management led legislators and the governor to believe when the company demanded first a $3.2 billion tax concession from the state, and then another $8.7 billion.

But what did this recent tax giveaway to Boeing get us? A loss of close to 12,000 jobs, 15% of the total Boeing workforce in our state. That means that the state gave Boeing about $138,000 for every single job they took away!

Boeing just heralded its new 787-10, built in South Carolina. This was the first Boeing jet to make its first flight outside of Puget Sound. The company is forecasting that production of the earlier 787 models may slow down. Where will the planes not be built? Well, naturally, not in Boeing’s old home of Washington. That tax money we gave them? It just finances outsourcing of jobs and investment to other states and countries.

Boeing is spending billions of dollars in South Carolina and not in our state just to stick it to the unionized workers, the machinists and the engineers, in our state. There is no other reason, financial or otherwise, to forsake decades of investment in plant and workers. Remember how all this got started: Boeing took over McDonnell Douglas in 1997, but actually the McDonnell Douglas management took over Boeing. Right away, they went looking for a new Boeing corporate headquarters, not in Seattle.

The guy who oversaw this flight from and fleecing of our state was Harry Stonecipher. He dreamed up outsourcing the 787 to Japan, Italy, South Carolina and other places, which resulted in billions of dollars of cost overruns when the quality of this outsourcing was not good enough to fly safely in the new airplane.

As Jim Albaugh, chief of Commercial Airplanes at Boeing, explained in January 2011, “We spent a lot more money in trying to recover than we ever would have spent if we’d tried to keep the key technologies closer to home.” But Stonecipher was not fired for his mismanagement of Boeing, he was fired for his mismanagement of his personal life after it came out he was having an affair with another Boeing manager.

Washington has not only given billions to Boeing in tax breaks, it has invested in workers’ education to insure a pipeline of skilled employees for Boeing. At Edmonds Community College, the Washington Aerospace Training and Research Center teaches manufacturing assembly, electrical assembly, quality assurance, aerospace tooling and aerospace composites. Everett Community College has both the Center of Excellence for Aerospace and Advanced Manufacturing and an aviation maintenance technology program. In 2012, the Legislature established the Aerospace and Advanced Manufacturing Pipeline Advisory Committee.

However, with Boeing’s job drain, we do not need a pipeline. These workers are picked off by companies in other states, with no investment by those states. Recently SPEEA, the Boeing engineers union, sent out a notice to its members about Lockheed Martin holding a Seattle job fair to hire for positions in California and Texas. So now aerospace companies are poaching Boeing workers from our state. These workers have been educated thanks to our public investments in K-12 and higher education to supply Boeing with a skilled workforce. Now Boeing does not need or want these workers.

Boeing is indeed going. There is no reason why the state of Washington must pay them to go. The Legislature should immediately close that $8.7 billion tax loophole, and put that money into education from pre-kindergarten through college. Then we would have workers ready for Washington companies, including aerospace companies, who are committed to our state. Boeing is not one of those.

Originally published a the Everett Herald

Why Dems have a good chance at winning back the state senate in the 45th LD

In the 2016 election, every single precinct in the 41st, 45th, and 48th LDs preferred Hillary Clinton & Tim Kaine over Donald Trump & Michael Pence. (Source: database downloaded from: King County Elections)

[Correction: an earlier version of this article incorrectly reported that every precinct in the 5th LD voted for Hillary & Kaine. In fact, 138 out of 168 precincts went for Hillary & Kaine in the 5th LD.]

In the 45st LD, 48,147 people voted for Hillary & Kaine; 20,824 voted for Trump & Pence: a ratio of 2.3.   The largest precinct ratio (Hillary/Trump) was 6.1; the smallest ratio was 1.1.

Likewise, 43,509 voters (58%) in the 45th LD voted for Jay Inslee; 31,950 went for Bill Bryant.   142 out of 166 precincts in the 45th LD voted for Jay Inslee over Bill Bryant.

For Legislative District 45 Representative Position 1, Democrat Roger Goodman won 42,981 (62%) of 45th LD votes, over 26,491 for Republican Ramiro Valderrama. 160 out of 166 precincts in the 45th LD chose Goodman over Valderrama.

For Legislative District 45 Representative Position 2, Democrat Larry Springer ran unopposed.

These results give hope that the Dems can win the special senate election in the 45th LD, where Democrat Manka Dhingra is aiming to win back control of the state senate from the Republicans, who have promised to spend $5 million to retain the seat.   The election is necessary because the incumbent, Republican Andy Hill, succumbed to  lung cancer in late October, 2016.

In the 41st LD, 50,843 people (72%) voted for Hillary & Kaine; 19,575 voted for Trump & Pence: a ratio of 2.6 favoring the Democrat. The largest precinct ratio (Hillary/Trump) was 5.5; the smallest ratio was 1.3.

In the 48th LD, results were even more lopsided. 42,860 (73%) voters chose Hillary & Kaine; 15,727 chose Trump & Pence. Every precinct went for Hillary & Kaine.

Even in the 5th LD (further east), 41,955 voters (60%) chose Hillary & Kaine, while only 28,450 chose Trump & Pence.  138 out of 168 precincts voted for Hillary.

Below are the ratios of Hillary & Kaine votes to Trump & Pence votes in all LDs in King County. Only in the 31st LD, in south-eastern King County, did Trump & Pence beat Hillary & Kaine.

+------+--------------------+--------------------+----------+
| LEG  | Hillary & Kaine    | Trump & Pence      |   Ratio  |
+------+--------------------+--------------------+-----------
|    0 |                 30 |                  9 |   3.3333 |
|    1 |             656524 |             263428 |   2.4922 |
|    5 |            7048440 |            4779600 |   1.4747 |
|   11 |            5311893 |            1992330 |   2.6662 |
|   30 |            3853512 |            2385330 |   1.6155 |
|   31 |             454116 |             485992 |   0.9344 | 
|   32 |            3142264 |             703840 |   4.4645 |
|   33 |            4647924 |            2047461 |   2.2701 |
|   34 |           13073159 |            2448853 |   5.3385 |
|   36 |           19877948 |            2132560 |   9.3212 |
|   37 |           10382058 |             969006 |  10.7141 |
|   39 |                286 |                186 |   1.5376 |
|   41 |            9711013 |            3738825 |   2.5973 |
|   43 |           16702844 |            1122116 |  14.8851 |
|   45 |            7992402 |            3456784 |   2.3121 |
|   46 |           14989462 |            2272650 |   6.5956 |
|   47 |            4250544 |            2993088 |   1.4201 |
|   48 |            7457640 |            2736498 |   2.7252 |
+------+--------------------+--------------------+----------+

Furthermore, 41st LD voters ousted Republican Steve Litzow from the state senate, replacing him with Democrat Lisa Wellman. During the campaign, Litzow even sent out a mailing to constituents announcing his opposition to Trump.  The other state legislators from the 41st LD are Democrats too, and women:  Judy Clibborn in the senate, and Tana Senn in the house.

The 45th LD senate election will be interesting, not only because of its political importance and expense, but also because both Dhingra and her Republican opponent, Jinyoung Lee Englund, are of Asian descent and are female.  With substantial Asian populations on the eastside, it is unclear what effect, if any, their ethnicity will have on the election outcome.

“The election won’t necessarily change the balance of power in the state for the long run: The winner of the special election will only serve out what would have been the last year of Hill’s term, and will have to fight to keep the seat in 2018.” (The real fight for control of the state lies ahead )

Please don’t take these results as reason for complacency.   Dems and allies need to work hard to win back the seat.

Bipartisan attack on ST3 funding threatens light-rail extensions

(April 20, 2017) — The Legislature is wrapped up in discussions about how to fund (or not fund) K-12 education. But if you look under the covers, you will see that these very same elected representatives and senators are intent on defunding Sound Transit 3. Instead of simply abiding by the voters’ approval of the tax increases necessary to fund mass transit in the Puget Sound area, they are engaging in a bipartisan attack on the election results.

Last November, we approved Sound Transit 3, with more than 54 percent support for the taxes necessary to build out our light rail system. To finance this, voters ratified Sound Transit’s financing plan, which increases property taxes by $25 per $100,000 in assessed value, hikes sales taxes by one half of one percent, and increases annual car-tab fees by about $80 for a vehicle valued at $10,000.

That money will enable Sound Transit to complete a 108-mile light rail network from Everett to Tacoma. By 2040, Sound Transit and its regional transit partners, including Community Transit, will carry more than 200 million passengers, with seven out of 10 trips made by rail, most of those by light rail. That is the key, because light rail is dependable, doesn’t get stuck in traffic, and takes you to where you want to go, or at least close by!

During the campaign, Sound Transit was completely transparent about the taxes. We all knew that our car tabs would increase a lot in 2017 to help fund Sound Transit. So when the first invoices arrived, the vast majority of people just paid their tabs. But a vocal minority, with big tabs from expensive cars, took their displeasure to Olympia, hoping that the Legislature would listen to their stories and disregard the will of the people.

Now we have a bipartisan attack on Sound Transit, with both Republicans and Democrats offering proposals for defunding.  The Republicans in the Senate are straightforward. One bill, sponsored by Sen. Dino Rossi (R-Sammamish), would allow cities and counties to opt out of all Sound Transit taxes. With this one bill, the Republicans enable any city to pull itself out of Sound Transit, regardless of how its citizens benefit. Free rides for all! This bill also appears to be a moneymaker for Tim Eyman, as it enables local initiatives to void all taxes paying for Sound Transit.

In this context, the Democrats’ proposal in the House of Representatives doesn’t look so bad. But it is not good. It, too, undermines the vote of the people last year and the financing necessary for building out Sound Transit.  Twenty Democrats in the House of Representatives endorsed the Sound Transit 3 ballot initiative. Now they are proposing to lower car tabs for motorists who have bought cars recently, and especially for those who have bought the most expensive cars. This is what is considered “providing fair tax relief for motorists.”

Do Democrats think they can win votes from the complainers who do not want to pay their car tabs for Sound Transit? The Democratic proposal does not roll back car tabs to where they were last year. So if you are going to complain, you will complain about your car tab increase whether it is $100 or $200 or $300.

One owner stated that he was billed three times as much as what he paid last year. His total bill was $406. Under the Democrats’ bill, it will be around $275. He won’t like that either.

But let’s stick with the law as approved by the voters. $406 sounds like a lot. Now consider his vehicle: a 2010 Range Rover, with a sticker price of more than $76,000. If he can afford a car that is valued at twice the total annual earnings of typical workers in our state, then he can afford his car tabs. They cost him $1.11 a day.

Under the Democrats’ bill, if passed, car tabs for this fellow would be 75 cents a day. He would save 36 cents a day and Sound Transit would lose 36 cents a day. That’s not much, but you add together all these reductions, and Sound Transit loses $780 million in car tab fees. This will result in a total loss of $2 billion over 25 years, a loss of 4 percent of the total budget for Sound Transit 3, worth about four miles of light rail track.

Perhaps the light rail to Everett would end at Paine Field. You could take a taxi to downtown!

 

Originally published at The Stand.

Tax breaks for Boeing have helped send jobs out of state

Here’s a headline that should make us happy: “Trump, Battered in Washington, Is Buoyed at Boeing Rally.” That was from the New York Times, last Friday.

But the funny thing is, there was no Boeing rally in our state, where the vast majority of Boeing workers live and work, making the vast majority of Boeing’s airplanes. And it wasn’t “fake news.” Trump just decamped to Charleston, South Carolina, to have a love fest with Boeing management. Those are the same people who funded and masterminded an all-out multi-million-dollar anti-union campaign to blackmail workers in South Carolina not to join the Machinists union.

The backdrop for this love fest between the billionaire and the mere millionaires of Boeing’s management was the latest new Boeing 787-10 Dreamliner in production in South Carolina. South Carolina wasn’t even called out in Boeing’s employment statistics in 2012. Now it is touted as the jewel in the crown. Is something wrong with this picture? A lot of things.

How did Boeing get all the billions of dollars to invest in South Carolina? Well, it could be seen as a direct transfer of tax money from our state, to Boeing, to South Carolina. Just in 2014 and 2015, Boeing got more than $521 million in tax breaks from the state of Washington. Did that go to ramping up Boeing employment in our state? No, employment has actually fallen, from 87,000 in October 2012 to 71,000 now. That is a loss of 16,000 jobs, or almost 1 out of 5 jobs disappeared.

Adding up the tax exemptions that Boeing rammed through the Legislature in 2003 ($3.2 billion) and 2013 ($8.7 billion) and even a top executive can figure out that’s how to invest in South Carolina. Which Boeing has done, to the tune of at least $2 billion, so far. These tax breaks have also enabled Boeing to pay over $41 million in fines in 2014 and 2015 for falsifying claims for the maintenance of military aircraft. No skin off Boeing’s profits!

Why is Boeing so anxious to rob the state of Washington and starve education funding, with these tax breaks? Is it because the workers in Washington, organized together in the Machinists Union and SPEEA, saved Boeing from its disastrous outsourcing of initial production of the 787 to other state, countries and companies? Is it because the 737 plant is going full-tilt as Boeing’s cash cow in Renton? Is it because we have the biggest concentration of aerospace-related production, manufacturing, and brain power in the world right here. Is it because the state of Washington has invested in community college workforce training and degrees tailored specifically to “supply” skilled workers for Boeing?

OK, so none of these reasons makes sense. How about this one: Washington workers are organized into unions at Boeing. Because of this, they don’t have to forfeit their constitutional rights when they walk into the plant. They get some respect from the company. They have some power to negotiate with the company to determine their wages and benefits. They cannot be fired at the arbitrary whim of a supervisor. They cannot be fired by Donald Trump, like he loved to do on “The Apprentice.”

Are there ways to stop the hemorrhaging of Boeing jobs from our state? Last year, state Rep. June Robinson, D-Everett, proposed a simple equation: Boeing, if you want your tax break, you keep jobs in Washington; if you reduce employment by 5,000 jobs or more, you lose your tax break and that money goes into education funding.

Really, what do we have to lose? Our state is just getting played by Boeing. We give Boeing tax breaks, they invest in other states and countries. We don’t, and Boeing invests in other states and countries, but they will have less money to do so. And of course, whenever these Boeing off-sites like the joint Boeing-Russian operation for titanium machining in the Ural Mountains of Russia, or the Charleston, South Carolina, site for the 787-E or the Boeing technology center in Moscow, whenever any one of them fail the exact quality assurance we all need for aircraft, Boeing will always fall back on the workers, the machinists, the engineers and the aerospace infrastructure of Washington state. So rather than encouraging Boeing to go, let’s just tell them they should stay!

Originally published at HeraldNet.com

2017 Public Bank Bill Gets a Hearing in Olympia on Feb 7. Why public banks save money.

The bill to establish a public bank, Senate bill 5464, is scheduled for a public hearing in the Senate Committee on Financial Institutions on Tuesday, February 7 2017 at 8:00 am in Olympia. Here is a link to this bill:
http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bills/Senate%20Bills/5464.pdf

If you cannot attend this hearing, here is a link to submit comments in favor of this bill:

https://app.leg.wa.gov/pbc/bill//5464

 

The bill to establish a public bank, Senate bill 5464, is scheduled for a public hearing in the Senate Committee on Financial Institutions on Tuesday, February 7 2017 at 8:00 am in Olympia. Here is a link to this bill:
http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bills/Senate%20Bills/5464.pdf

If you cannot attend this hearing, here is a link to submit comments in favor of this bill:

https://app.leg.wa.gov/pbc/bill//5464

Email us if you need a ride to Olympia
springforschools@gmail.com

Regards,
David Spring M. Ed.
Washington Public Bank Coalition

What is a Public Bank?

A public bank is a bank that is established to operate for the public good rather than for private profit. There are many public banks in nations around the world. In particular, public banks were responsible for the restoration of economic prosperity in Germany after the devastation of World War Two.

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All 50 states, except North Dakota deal with private wall street banking system that works like this:

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How our current system works:

1) We pay our taxes / fees and they go to the state government.

2) The state government invests our money in private “Too big to fail” banks.

3) The banks speculates with our money in the stock market and in derivatives, financial gambling instruments, which were part of the cause of the 2008 crisis)

4) The banks profit from our money.

5) We get a modest return.

6) And equally important, because our government doesn’t take in enough revenue to pay for infrastructure (like roads and school construction) the city, county and state governments have to issue bonds and we end up paying huge amounts of interest and fees (debt service) to both the banks who write the bond deals and to bond holders.

Read more: What is a Public Bank?

Welcome to the Washington Public Bank Coalition

Welcome to the Washington Public Bank Coalition! Our goal is to provide you with information on the benefits of creating a public bank to finance public projects, such as public public schools, rather than financing public projects through private Wall Street mega banks. The safety of one million school children in our state depends on replacing one thousand crumbling school buildings. The best and least expensive way to build these urgently needed schools is by creating a public bank. Our hope that you will join with us to support the establishment of a public bank here in Washington state so that we can begin to build these urgently needed schools – financed entirely by repealing tax breaks for billionaires – and without placing additional financial burdens on local homeowners.

What is a Public Bank?
A public bank is a bank that is established to operate for the public good rather than for private profit. There are many public banks in nations around the world. In particular, public banks were responsible for the restoration of economic prosperity in Germany after the devastation of World War Two.

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Due to the corrupting influence of greedy Wall Street banks, the only public bank in the United States is the Bank of North Dakota – which was established by conservative farmers in North Dakota to free their state from the economic control of powerful East Coast Bankers. Despite many attempts by Wall Street bankers to kill the Bank of North Dakota, it has thrives and allowed North Dakota to be free of the debt slavery imposed by Too Big to Fail banks. Each year, the Bank of North Dakota returns millions of dollars in profits to the people of North Dakota – in addition to providing low cost loans for the building of public schools and public roads in North Dakota.

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Best of all, the Bank of North Dakota is the safest bank in America. It does not engage in risky “credit default” speculation and it has the highest ratio of assets to liabilities of any bank in America.

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Why do we need a Public Bank in Washington State?
We have gone for more than 100 years in Washington state ever since we were granted Statehood in 1889 without a public bank. So why do we need a public bank now? The answer is that our state is facing economic problems which are greater than any time in our history. Over half of public schools are more than 50 years old. They do not meet earthquake codes or health codes. They are so unsafe that they place the lives of 500,000 students at risk should a major quake occur while the children are at school. It would take more than $30 billion to replace all of these crumbing schools. We also have a $20 billion road construction and repair backlog. Half of our bridges are also more than 50 years old and would collapse in the event of a major earthquake. We are already paying more than $2 billion per year just in interest payments to Wall Street banks from past loans. We as a State simply cannot afford to continue squandering billions of dollars every year to payments to greedy Wall Street bankers when a public bank would allow us to build public schools and roads with no interest charges. Below are just a few of many benefits of creating our own public bank.

First, we could build schools and roads for half the cost – or build twice as many schools and roads! The concentration of wealthy and power in the hands of Wall Street banks is greater now than at any time in our nation’s history. The difference in cost between what Wall Street banks are able to get from the federal government versus what they charge states is the highest in history. Wall street banks get money at near zero percent interest and charge our State, cities and School Districts 4 to 5 percent interest – even though no city or school district in our state has ever defaulted on a loan. The prices were are being charged in interest by Wall Street banks amounts to robbery. The only reason they get away with it is that the big banks are a monopoly.

A public bank would allow us to build public schools and public roads without being fleeced by the private Wall Street banking monopoly. Currently almost half the cost of all public schools and roads goes simply to pay off the bonds of the Wall Street banks. If we loaned the money to ourselves, we could eliminate these greedy bankers and return the money to the tax payers by lowering the cost of public projects. Alternately, we could build twice as many public projects with the same amount of money.

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Second, we could lower local property taxes. Because our state is at the debt limit, the state school construction matching funds have fallen from 67% of the actual cost of building schools in the 1980s to less than 10% of the actual cost of building schools today. As a consequence of the state failure to help build schools, local homeowners have been forced to pick up the difference through skyrocketing local property taxes in order to pay off the Wall Street banks in a vicious cycle of debt induced slavery. If we had a public bank, there would be no need to increase local property taxes – in fact, we could cut local property taxes in half. Eventually, we would become like North Dakota which has virtually no debt and therefore has very low taxes.

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Third, starting a public bank would allow us to create more than one hundred thousand new good paying jobs – building the schools our kids need and the roads that the rest of us need to get to and from work.

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Fourth, we could reduce our dependence on greedy corrupt Wall Street banks.
The reason Wall Street banks were given billions of dollars in bailouts in the past few years is because we do not have a public banking system to fail back on when private for profit banks go broke. Starting a public banking system will allow our economy to grow even if the greedy Wall Street banks gamble away all of their profits and go broke. It is much safer to invest our tax dollars right here in Washington state helping build our local schools and roads than to hand our money over to Wall Street bankers who will gamble it away in a reckless drive to maximize profits.

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Put Our Tax Dollars to Work for Us – Interest earned from investments made by a Public Bank would be returned to the State’s general fund and put to work right here in Washington. The North Dakota State Bank returned over $300 million dollars to the State in the last decade. With our larger population, a Washington State Bank could generate even more revenue, stabilize our economy, and avoid tax increases.

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Do you know where your Washington State tax dollars go?
When you go to the drugstore to buy some aspirin for the headache you got watching too many false and misleading ads on TV, the store adds 9.5% of the price to your bill. That money is collected and used by the State of Washington to pay for schools and social services. But before the state uses the funds for their intended purpose, did you know that all of those billions of dollars go into an account at Bank of America? This basically billions of dollars of free money that Bank of America uses to increase their corporate profits. This is the same Bank of America that is now considered “Too Big to Fail” and that you and I paid billions of tax payer dollars to bail out when they recklessly gambled with depositors’ money and lost it on speculation in financial schemes such as collateralized debt obligations and mortgage-backed securities.

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This is the same ruthless Bank of America that is now foreclosing on tens of thousands of Washington State residents, all the while skirting its obligation to re-negotiate underwater home loans in good faith and using “robosigners” to pretend to hold notes that were sliced diced and discarded years ago. A Washington State Public Bank would allow us to keep our state tax dollars out of the hands of these greedy, lawless Wall Street bankers.

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The Cause of our Economic Crisis is the Private Mega Bank Monopoly
Clearly, our current financial systems, nationwide and in Washington State, aren’t working. The gap between the rich and poor is growing; worker lay-offs and state deficits are increasing, and many, many people need jobs. Our current banking system is directly connected to big banks. On August 31, 2010, Washington State had 67.8% of its current deposits of $5.4 billion dollars in nine private banks that are headquartered outside the Northwest. Most of our tax money is deposited in the Bank of America. These private banks are in business to make profits for their owners and their shareholders. These 9 banks directly benefit from holding Washington’s state revenue on their balance sheets. They are able to leverage that money (multiply it many times) to create new loans, including out of state loans and to invest that money on Wall Street.

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Our State’s tax payers pay interest to Wall Street Bankers in at least three ways.

First, we pay about one billion dollars per year from the State General Fund to cover the interest on loans from State public projects. Second, we pay more than one billion dollars in interest on public projects funded through local governments like cities and counties. Third, we pay more than one billion dollars in interest and principle payments for local school district school construction bonds. The total bond payments, for all three bond sources for public projects by all tax payers in Washington State, exceed $3 billion per year. By contrast, thanks to having their own public bank, the State of North Dakota has no bond payments and has no budget shortfall.

Currently, taxpayers in our State pay about 5% interest on these $3 billion in bonds to Wall Street Bankers. This is an unreasonably high interest rate given that Wall Street banks are able to get the funds to finance the bonds from the Federal Reserve for near zero interest rates. If we financed our own public bonds, we could likely cut the interest rate in half, saving our State’s tax payers more than one billion dollars per year in interest payments on bonds – simply by eliminating the Wall Street middle men.

The Solution to our State’s Economic Problems is to Start Our Own Public Bank
Instead of banking on Wall Street, Washington State needs to bank on Main Street. The answer lies in Public Banking. Simply put, Public Banks put state tax revenue, investments and assets to work on Main Street, not on Wall Street.

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Click on the other pages on our website to learn more about the drawbacks of continuing to borrow money from Wall Street banks and the benefits of creating our own public bank.

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Then click on the Join Now button to join with us in creating a public bank here for Washington State! Together with the help of a public bank, we can restore economic prosperity here for everyone.

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