Faced with a tight credit market, recession and dwindling state funds, one proposal lawmakers have on the table is setting up a state bank.
Bills in the House and Senate would create the Washington Investment Trust, a move applauded by many small business owners, but opposed by the State Treasurer, who says it would be risky and unconstitutional.
Rep. Bob Hasegawa, the House bill’s sponsor, said the proposal was modeled after a similar institution in North Dakota and based on the idea that state credit should not be at the disposal of Bank of America, where Washington currently keeps its money.
“Why don’t we create our own institution, keep that money in our state and we make money off our money that we can then reinvest back into our community?” said Hasegawa.
He said that the North Dakota bank had been successful, leading to a budget surplus this year and preventing bank failures during the 2008 financial crisis.
The bills would set up a blue ribbon task force charged with organizing the bank, in which all state funds would be deposited. The bank could then use that money to make loans to businesses, farms and students and could also lend to other financial institutions to stabilize the Washington economy.
Assistant State Treasurer Wolfgang Opitz said he and Treasurer James McIntire opposed the idea.
“This bill, if adopted, would place both public funds and the state as a whole at significant risk,” he said.