Michigan leaps forward into the running for the first state in a hundred years to create a state Public Bank, thanks to Republicans and Democrats working together for their state's best interests.
Last Thursday, MI House Bills 5431-5434 were formally introduced — a bipartisan package of bills that would create and maintain a state bank. According to a statement by State Rep. Martin Howrylak (R), the Michigan state-run bank would effectively be a co-operative, holding state and local government funds. The bank could then use those funds to provide loans to the state and its subdivisions (schools, cities, townships, villages, etc.).
“This is a fiscally responsible solution for taxpayers. As states are looking for ways to reduce spending, many are exploring the idea of a state-owned bank, similar to the Bank of North Dakota. In North Dakota, public revenue runs through the state-owned bank (Bank of North Dakota, BND). The BND provides loans significantly below market interest rates to local governments, smaller banks and businesses. Local governments and schools use these savings to pump more money into classrooms, expand access to infrastructure funding and keep tax rates low.”
That model has successfully been used in North Dakota, significantly reducing the cost of capital to taxpayers and helping keep taxes low. Like the Bank of North Dakota, this bank will not have retail branches. Its operations will be focused on wholesale lending. ...
This legislation allows the state to offer reasonable interest rates for targeted projects that benefit the public interest, while generating additional revenue for the state’s general fund. The State Bank of Michigan would be a win-win for taxpayers, schools, local governments and local banks.”