Berkeley residents will answer a $58.3 million question this November that Richmond elected officials have already said they support: How badly do they want a public bank?
Measure Z, one of seven measures on the Berkeley ballot in the Nov. 3 election, would institute a six-year parcel tax, starting at 6 cents per square foot for homes and 9 cents per square foot for other buildings, to capitalize and deposit in a regional public bank for the East Bay. Projected to raise more than $9 million in its first year, it would be the largest single investment in a long-discussed regional bank, with the only other pledge to date coming from Richmond at $750,000.
Bank supporters say it’s an opportunity for Berkeleyans to put their money where their morals are and build what they hope will become a self-sustaining institution for investment in progressive goals such as affordable housing and clean energy, all with stricter local oversight.
“People are more mindful of where their money is going and what impact that money is having,” Neha Singh, project manager for Friends of Public Bank East Bay, told Richmondside’s sister publication, Berkeleyside. “And by parking a majority of our money in Wall Street, big banks, we are enabling and complicit in a lot of those projects that those Wall Street banks make a profit from funding, which include oil and private prisons as well as genocide.”
It’s not surprising that such an argument appealed to Richmond, where the city council sticks to a strong progressive agenda and has taken stands against Israel’s actions in Gaza, voting in 2024 to divest city money from stocks or mutual funds involving companies with ties to Israel.
Opponents call ballot question a “bait-and-switch”
Opponents say the ballot question is a bait-and-switch — that the public bank Berkeley leaders and residents have considered for years was predicated on larger investments from Oakland and Alameda County, but those are no longer part of the formula. Now, critics say, Berkeley is being asked to pick up the tab for the East Bay with no guarantees that any of that money will come back into the city.
“It should be regional money going to a regional effort,” said Paul Mathew of Within Our Means Berkeley, a group opposed to the ballot measure. “Imagine [if] only Berkeley paid for BART.”
Public Bank East Bay, which has led the charge for a regional public bank, believes it can keep overhead and interest rates low in part by not offering retail banking services like personal accounts, cash machines or local branches; the target depositors are local governments, nonprofits, pensions, unions and foundations. Central to their pitch is that public banks do not have to turn such high profits as bigger banks — they need to make some profit to cover overhead and expenses, but they can invest in projects bigger banks would find too risky.
Public bank proponents, who gathered petition signatures from Berkeley voters to put the measure on the ballot, have formed a campaign committee called the Coalition to Keep Berkeley Money Local. The committee had raised more than $155,000 as of Aug. 17, according to campaign finance records. It received a $45,000 loan from Debbie Notkin, chair of Public Bank East Bay’s board; and $45,000 each from Keep East Bay Money Local and the San Francisco Foundation, which gives money to racial equity causes. Friends of the Public Bank East Bay kicked in another $20,000.
Dozens of local officials — including five members of the Berkeley City Council and state Sen. Jesse Arreguín — along with labor organizations, faith communities and advocacy groups have signaled support for Public Bank East Bay generally. But the Berkeley ballot measure has so far not attracted any formal endorsements; the Alameda County Democratic Party is scheduled to vote on whether to endorse it at a meeting Sept. 9.
It also appears to have the support of an official from Richmond LAND, a community land trust nonprofit that says its mission is to “remove land from the speculative market to protect homes for working-class families, and conserve land for long-term community needs — not corporate profit.”
Richmond LAND Executive Director Princess Robinson, who spoke at a Public Bank East Bay event, is quoted as saying, “When you’re from the community you carry a passion to see it thrive. That’s why it’s so important to have locally controlled banks with decision-makers who actually live here. If the people in power aren’t rooted in the community, you’ll always end up with profit over people.”
Why is only Berkeley mulling a tax for a regional bank?
Proponents of the tax said they are only pursuing their measure in Berkeley because this is where polling indicates it’s more likely to pass.
“The constituents of Oakland didn’t have an appetite for a parcel tax,” Singh said. “They seemed a little bit more skeptical about the idea.”
In June, Oakland voters shot down Measure E, a $192 parcel tax that the City Council there was counting on to fund core city services.
“In Berkeley we polled much better. That was really what determined the direction that our ballot measure campaign would go in,” Singh said.
A city-commissioned poll, conducted in April, found 58% of likely voters said they were inclined to support the proposed parcel tax.
Besides the public bank tax, Berkeleyans will also vote this year on a 0.5% sales tax increase to fund city services, a $300 million infrastructure bond measure, an arts and culture parcel tax and an increase in the city soda tax.
In Richmond, the city council voted in 2024 to put $750,000 toward the bank, but only if state regulators approve its charter and Alameda County puts money in as well.
Nevertheless, Singh said it was “significant” that Richmond was the first government to pledge money as it had less to work with than Berkeley, Oakland or the county. She suggested Richmond’s $550 million 2024 settlement with Chevron, which kept a refinery tax off the city’s ballot that year, could be a source of deposits too; Richmond is currently mulling how to put that money to use.
Advocates from Within Our Means Berkeley, which frequently opposes new taxes, say they have no problem with the public bank’s mission, just with the proposed financing.
“I don’t think we’re, collectively, ideologically, anti-public bank at all,” Paul Mathew, a Within Our Means organizer, told Berkeleyside. “The issue is the way this is written, the provisions, the lack of specificity and … this question of Berkeley money going to a regional effort.”
Proponents such as Notkin, Public Bank East Bay’s board chair, acknowledge they are asking Berkeley to take a big first step. But even if Berkeley has to lead the way, Notkin said, “Things that improve Oakland, things that improve El Cerrito, things that improve the county improve Berkeley.”
And public bank backers are confident Berkeley will not be walking alone. Ultimately, Notkin said, “The goal is to get the county engaged, because the county is where the money is, and one way to get the county engaged is to show voter support.”
Public bank efforts grew out of Occupy Wall Street
The push for public banks grew out of the 2008 financial crisis and the Occupy movement that followed it. Proponents say Wall Street’s relentless pursuit of profit leaves gaps that public banks can fill — in helping prop up dwindling community banks and credit unions, refinancing municipal debt and financing public infrastructure at more affordable rates.
Globally, public banks are fairly common. But in the United States, the only longstanding examples are the more-than-century-old Bank of North Dakota and the Territorial Bank of American Samoa. During the Great Recession North Dakota’s state bank acted as a financial bulwark, offering credit and loans when conventional banks could not. And in contrast to the Wall Street banks that took hundreds of billions in bailouts, the Public Bank of North Dakota made tens of millions in low-interest loans when droughts ravaged the state’s ranches in 2017.
There have been campaigns in Vermont, Philadelphia, Los Angeles and elsewhere to take steps toward creating more public banks within local and state governments.
“Every one of them is driven by an awareness that we’re all spending way too much money on Wall Street and the bonds market,” said Walt McRee, the president of the Public Banking Institute, a nonprofit headquartered in Southern California that advocates for public banks nationwide.
The Berkeley City Council lobbied Sacramento on behalf of a 2019 state law that created a framework for public banks. Berkeley also joined with Oakland and Alameda County to pay for a study that indicated a public bank would be workable if state law would allow it.
The council in 2023 again declared support for public banks, this time announcing Berkeley intended to act as a “founding member” of a regional public bank — with the assumptions that Oakland and Richmond would do the same, and that Alameda County would “take an ownership stake” in the bank after the state licensed it. (The county “cannot be a founding member without a county-wide referendum process,” according to a 2022 viability study.)
Across the bay, San Francisco voters will also have a ballot question on public banks this November. Unlike Berkeley, however, their ballot question is logistical rather than financial: It concerns only the governance structure for a municipal finance corporation, which could become a public bank in three to five years. If that bank needs new taxes for capital or investments, San Francisco voters would have to approve that at another election.
What happens once money is raised?
If Berkeley voters approve the public bank parcel tax, the tax rate would rise each year based on Bay Area cost of living or California per capita income, whichever increases the most.
Very-low-income property owners would be exempt from the tax, but would be required to apply for exemptions and document their statuses each year.
Once Berkeley raises enough to capitalize the bank, about $40 million, Friends of Public Bank East Bay would apply for insurance through the Federal Deposit Insurance Corporation (FDIC) and certification to do business through California’s Department of Financial Protection and Innovation. If the state and federal regulators sign off, the board can appoint a CEO.
If the FDIC does not green-light the bank before June 30, 2033, the tens of millions of Berkeley tax dollars stay in a special fund that the city can loan out for housing, green energy and infrastructure and small businesses — until, and unless, the regulators do eventually approve the bank to do business.
But opponents worry there is no real roadmap if Sacramento or Washington do not approve the bank.
The ballot question before Berkeley is “incredibly imprecise,” Geoff Lomax, an organizer for Within Our Means, told Berkeleyside. “It would just be a mess trying to appropriate those funds.”
And while Berkeley may ultimately be able to use an East Bay-based public bank to keep its operating funds in, that day is a ways off. The 2022 viability study for a public bank found the “complex bookkeeping and instantly responsive customer service” local governments need for that type of banking is not something the proposed bank could handle in its early years.
Even if Berkeley cannot immediately use the proposed bank as its only financial center, however, Notkin said that once the bank is open for business, it can start making the kind of loans East Bay residents need
“Do you want people who care about your community deciding who gets loans in your community, or do you want Wall Street to do it?” Notkin said. “Jeff Bezos, or the people of Berkeley?”
Richmondside Editor-in-Chief Kari Hulac contributed to this report.
