Santa Fe Mayor Exploring the Potential Of Public Banking

"We have to become innovators.  We have to think outside the box.  We have to look for non-traditional ways of meeting the critical needs of our community." - Santa Fe Mayor Javier Gonzales


rsz_screenshot_2014-09-28_120913(1).pngIn a press conference on Friday September 26th, Santa Fe Mayor Javier Gonzales discussed the need for new approaches to help the Santa Fe economy.  Gonzales acknowledged that while his city is an international art and culture destination, it has not been immune to the larger economic challenges facing the nation.

"(Santa Fe) has become a tale of two cities. When you look at the income gap between the highest wage earners and the lowest, we are no different than many cities across America - it has gotten larger." 

To support its economy, Mayor Gonzalez emphasized that Santa Fe must invest in broadband, early childhood development, job training, and programs that help kids who are the verge of dropping out, among other areas.  All those investments must come from non-traditional sources, however, as new government revenues in Santa Fe are essentially capped, the mayor said.

Mayor Gonzalez discussed the importance of access to capital in any recovery, and pointed out that in that respect, the "Main Streets" of Santa Fe and much of the nation have still not recovered, in part because lending by big banks to small businesses is still down by 53%.  The mayor suggested that there are tantalizing prospects to increase capital flows and lending in Santa Fe by re-examining where city funds are currently kept, and how they might be more strategically deployed.

"At the end of the day it really is about banking and betting on your community.  Right now our bank is Wells Fargo.  They serve the City according to our contract.  But they also take city revenues, taxpayer dollars, and they use those taxpayer dollars as part of their loan portfolio that goes to places outside of Santa Fe and certainly outside of New Mexico.  And when you think of that most basic concept of taxpayer money being used to earn revenues for national banks that have reduced their small business lending by 53%, you have to pause and wonder - is this the best structure for our community?  Does this make the most sense when it comes to the public's money? ... We owe it to the public to look at ways to keep money in our community, to reinvest it in our community, to bet on our community and their ability to succeed - and to do so in a way that protects the taxpayer.  As the experts will tell you - in a public bank you can be in a regulated environment that assures that there is protection of the public's funds."

In initiating a feasibility study, the mayor said that his goal was to determine what a public bank could do to help the local economy move forward.  The study would determine if a public bank in Santa Fe is possible, if so - how to proceed, and what are the risks to the community. 



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