Public banking video still
Still from a video introducing the concept of public banking (Courtesy of the Public Banking Institute)

The dev­as­ta­tion from Washington’s wild­fires this sum­mer showed that the con­se­quences of cli­mate dam­age are get­ting worse. Wild­fires have mul­ti­ple caus­es, whether human neg­li­gence, poor for­est man­age­ment, or freak nat­ur­al acci­dents. Nev­er­the­less, the warmer and dri­er sum­mers in the Pacif­ic North­west has meant that the fire sea­son has got­ten longer and poten­tial­ly more volatile.

So far, the destruc­tion of Washington’s lat­est wild­fires has been rel­a­tive­ly con­tained. The deaths of two peo­ple and the destruc­tion of over three hun­dred and fifty homes is trag­ic, but in terms of acreage, the wild­fires this sea­son have been rel­a­tive­ly small. How­ev­er, with­in the con­text of the last few decades, mas­sive wild­fires have become more com­mon in Washington.

Pri­or to the twen­ty-first cen­tu­ry, the largest wild­fire in Washington’s his­to­ry was the Yacolt Burn in 1902 that scorched near­ly 240,000 acres. In 2014, that record was bro­ken when the Carl­ton Com­plex Fire burned approx­i­mate­ly 256,000 acres.

Then, in 2015, the Okanogan Com­plex Fire eclipsed that destruc­tion with wild­fires that burned near­ly 305,000 acres. Five years lat­er, that record was smashed again when the Wash­ing­ton Labor Day Fires burned more than 330,000 acres.

Unless Wash­ing­to­ni­ans want a future where out-of-con­trol blazes are the new norm, they are going to need to make mas­sive invest­ments in for­est man­age­ment and become a mod­el state for rapid­ly reduc­ing green­house gases.

While the state has adopt­ed a coher­ent pol­i­cy for the for­mer, it is still strug­gling with the lat­ter, most­ly because it lacks the will to embrace pro­gres­sive rev­enue sources that could secure the nec­es­sary invest­ments in a green­er future.

There is good news: In the past few years, the state has begun a con­cert­ed effort to improve its for­est man­age­ment and its response to wildfires.

In 2021, law­mak­ers passed HB 1168, which allo­cat­ed $500 mil­lion over the next eight years to the Depart­ment of Nat­ur­al Resources (DNR) to imple­ment its 20-Year For­est Health Strate­gic Plan of Cen­tral and East­ern Washington.

The fund­ing not only sup­port­ed greater resources for fire­fight­ers — a request that Lands Com­mis­sion­er Hllary Franz had been mak­ing for years — but also pri­or­i­tized long term for­est health. The DNR’s twen­ty year Strate­gic Plan called for the repair of 1.25 mil­lion acres of Washington’s for­est, while acknowl­edg­ing that more than 2.7 mil­lion acres are con­sid­ered unhealthy, includ­ing being vul­ner­a­ble to wildfires.

As of Octo­ber 31st, 2022, DNR, along with its part­ners, has already treat­ed 500,000 acres across cen­tral and east­ern Washington.

The bad news is the state has yet to mean­ing­ful­ly reduce cli­mate dam­ag­ing emis­sions. Wash­ing­ton does have a rep­u­ta­tion for tak­ing the cli­mate cri­sis seri­ous­ly, but recent his­to­ry demon­strates we have strug­gled to rise to meet the moment. In 2019, the state released 102.1 mil­lion met­ric tons of green­house gas­es into the atmos­phere, which was not only a 7% increase from 2018, but the most since 2007. It also was 9% high­er than the emis­sion tar­gets set by the state. A con­sid­er­able con­tri­bu­tion to this increase was the state’s elec­tric­i­ty sector.

From 2018 to 2019, emis­sions from elec­tric­i­ty increased by 5.4 mil­lion met­ric tons. Essen­tial­ly, weath­er vari­abil­i­ty — extreme­ly cold and rainy win­ters matched with excep­tion­al­ly hot and dry sum­mers — meant that peo­ple were using more elec­tric­i­ty to stay com­fort­able in their homes.

The state’s strat­e­gy for clean ener­gy deploy­ment left Wash­ing­ton vul­ner­a­ble to back­slid­ing. Instead of rely­ing on a tech­nol­o­gy-neu­tral posi­tion that focus­es on sup­port­ing pre­vi­ous­ly exist­ing pub­lic insti­tu­tions, Washington’s leg­is­la­tors have tend­ed to favor cli­mate poli­cies that are tech­nol­o­gy spe­cif­ic, piece­meal, and large­ly depen­dent on the con­sump­tion pat­terns of indi­vid­ual consumers.

As an exam­ple, con­sid­er the state’s empha­sis on pri­vate solar panels.

For years, Wash­ing­ton has pro­vid­ed a sales tax exemp­tion for solar ener­gy sys­tems, includ­ing per­son­al rooftop solar pan­els, and net meter­ing that allows indi­vid­ual solar pro­duc­ers to sell their ener­gy back to the grid. Unfor­tu­nate­ly, these incen­tives have only had a mar­gin­al impact on our clean ener­gy production.

After years of exper­i­men­ta­tion, it is time to admit that piec­ing togeth­er a solar-pow­ered utopia from a mil­lion indi­vid­ual actors has failed.

Instead, more empha­sis should be placed on increas­ing the sup­ply of clean ener­gy avail­able to util­i­ties. By far, the most sig­nif­i­cant pub­lic ener­gy insti­tu­tion in the state is the con­sor­tium Ener­gy Northwest.

Orig­i­nal­ly named the Wash­ing­ton Pub­lic Pow­er Sup­ply Sys­tem, Ener­gy North­west was the prod­uct of a decade of activism from rur­al pop­ulists and urban pro­gres­sives, specif­i­cal­ly from Wash­ing­ton State Grange. Cur­rent­ly, the con­sor­tium pro­vides ener­gy to twen­ty-eight pub­lic pow­er util­i­ties, includ­ing twen­ty-three of the state’s twen­ty-nine pub­lic util­i­ty dis­tricts, all at low prices.

With a sig­nif­i­cant clean ener­gy port­fo­lio that includes nuclear, hydro, wind, and solar, Ener­gy North­west deliv­ers near­ly 1,300 megawatts of pow­er through­out the state, and it could do much more if giv­en the need­ed resources.

In addi­tion to sup­port­ing the state’s pub­lic util­i­ties, Wash­ing­ton will also need to make mas­sive invest­ments in its infra­struc­ture. The warm­ing cli­mate is like­ly to yield more extreme weath­er. To pre­pare for this future, Wash­ing­ton will not only need to repair its dam­aged infra­struc­ture but make addi­tion­al invest­ments to for­ti­fy it. In 2019, the Amer­i­can Soci­ety of Civ­il Engi­neers gave Washington’s infra­struc­ture a grade of “C-.” Red flagged areas include drink­ing water infra­struc­ture, roads, pub­lic tran­sit, and wastewater.

Stormwa­ter infra­struc­ture received a near fail­ing grade.

The bad shape of Washington’s roads and lack of invest­ment in tran­sit is wor­ry­ing, since the trans­porta­tion sec­tor is our largest source of emissions.

Trans­porta­tion infra­struc­ture is inti­mate­ly con­nect­ed to the state’s hous­ing short­age. The denser an urban area, the eas­i­er it is for peo­ple to adopt alter­na­tive forms of trans­porta­tion — such as walk­ing, bik­ing, and the uti­liza­tion of pub­lic bus­es and trains. Unfor­tu­nate­ly, years of mis­guid­ed devel­op­ment poli­cies have locked the state in a car-cen­tric plan­ning mindset.

Wash­ing­ton is mov­ing away from the sprawl mod­el, but chal­lenges lay ahead. In the next twen­ty years, the state is going to need to respon­si­bly build 1.1 mil­lion units of hous­ing to just keep up with antic­i­pat­ed pop­u­la­tion growth.

The bot­tom line is that to effec­tive­ly deal with cli­mate dam­age, Wash­ing­ton must make con­sid­er­able invest­ments in clean ener­gy, infra­struc­ture, trans­porta­tion, and hous­ing. This won’t be easy, but there are solu­tions available.

In addi­tion to bal­anc­ing its tax code, Wash­ing­ton has the option of cre­at­ing a pub­lic bank to hold the rev­enue the state col­lects. Then, using the full faith and cred­it of the state, the state could make loans to fund vari­ety of social needs.

The idea might seem rad­i­cal, but there are already exam­ples of it working.

Wash­ing­ton has exper­i­ment­ed with poli­cies that have come close to pub­lic bank­ing. In 1997, Wash­ing­ton was one of sev­er­al states that par­tic­i­pat­ed in the Depart­ment of Transportation’s State Infra­struc­ture Banks (SIB) to fund trans­porta­tion infra­struc­ture. With cap­i­tal­iza­tion of $1.5 mil­lion from the fed­er­al gov­ern­ment, Wash­ing­ton set up a revolv­ing loan fund to allo­cate invest­ments to roads and high­ways. Sim­i­lar­ly, in 2013, the leg­is­la­tors cre­at­ed a Clean Ener­gy Fund (CEF), which — like SIB — oper­ates as a revolv­ing lender.

Through­out its his­to­ry, Washington’s CEF has loaned near­ly $150 mil­lion and sup­port­ed more than 5,000 ener­gy projects.

These poli­cies are encour­ag­ing, but they suf­fer from two major shortfalls.

First, they are painful­ly under­cap­i­tal­ized. The amount of mon­ey need­ed to solve Washington’s prob­lems needs to be in the bil­lions, not mil­lions. Sec­ond, revolv­ing loans can direct mon­ey to need­ed areas, but unlike an actu­al bank they do not expand the mon­ey sup­ply by lend­ing out against deposits. For a gen­uine pub­lic bank, Wash­ing­ton should look to the suc­cess­es in oth­er states.

Sev­er­al states — includ­ing Alaba­ma, Geor­gia, Ken­tucky, Illi­nois, South Car­oli­na, Ten­nessee, and Ver­mont — have all had state owned pub­lic banks in their his­to­ry. Cur­rent­ly, North Dako­ta is the only state in the coun­try that has a pub­lic bank, and it is a major pil­lar of the state’s econ­o­my, with lend­ing prac­tices that sup­port eco­nom­ic devel­op­ment and dis­as­ter relief.

Last year, BND had $10.2 bil­lion in assets, main­tained a loan port­fo­lio of $3.2 bil­lion, and made $191.2 mil­lion in prof­it. How­ev­er, unlike a pri­vate bank, its sur­plus­es are plowed back into the state’s economy.

Dur­ing the most recent leg­isla­tive ses­sion, Sen­a­tor Pat­ty Kud­er­er (D‑48th Dis­trict: Belle­vue, Red­mond, Kirk­land, the Points com­mu­ni­ties) intro­duced SB 5509, leg­is­la­tion to cre­ate a pub­lic infra­struc­ture bank for Washington’s local, munic­i­pal, and trib­al gov­ern­ments. While the bill would not dupli­cate the mod­el North Dako­ta uses, it could lead to a strong pub­lic bank­ing sec­tor in Washington.

SB 5509 was heard in the Sen­ate Com­mit­tee on Busi­ness, Finan­cial Ser­vices, Gam­ing & Trade on Jan­u­ary 31st, 2023. It was sched­uled for exec­u­tive action in Feb­ru­ary, but failed to receive the nec­es­sary votes to advance, due to the oppo­si­tion of Demo­c­ra­t­ic Sen­a­tor Mark Mul­let (D‑5th Dis­trict: East King County).

Mul­let and Kud­er­er are each now seek­ing statewide office. Mul­let is run­ning for gov­er­nor and Kud­er­er is run­ning for insur­ance com­mis­sion­er. Mul­let’s posi­tion in the Sen­ate is also up in 2024, which means he must for­go a Sen­ate reelec­tion bid in order to pur­sue his guber­na­to­r­i­al ambi­tions. In just a year and a half, the chief Demo­c­ra­t­ic oppo­nent of pub­lic bank­ing in the Leg­is­la­ture could be out of office.

If Wash­ing­ton is going to deal seri­ous­ly with the impacts of glob­al warm­ing, includ­ing mak­ing the nec­es­sary invest­ments through­out the state, then it should embrace the promise and poten­tial of pub­lic bank­ing. Oth­er­wise, res­i­dents of the state will like­ly face a much harsh­er future, both eco­nom­i­cal­ly and ecologically.

The real­i­ty that Wash­ing­ton’s lead­ers need to face, which ought be felt as intense­ly as the heat from the state’s wild­fires, is that the Earth is only going to respond to our actions. Rhetoric won’t be enough. Our deeds must match our words if future gen­er­a­tions are to inher­it a hab­it­able planet.

About the author

Mar­co Rosaire Rossi is the exec­u­tive direc­tor for Wash­ing­to­ni­ans for Pub­lic Bank­ing and an adjunct pro­fes­sor in polit­i­cal sci­ence at Cas­ca­dia Com­mu­ni­ty Col­lege. He received a PhD in polit­i­cal sci­ence from the Uni­ver­si­ty of Illi­nois-Chica­go and author of the book “Pol­i­tics for the 99%.” He cur­rent­ly lives in Taco­ma, Washington.

About the author

Marco Rosaire Rossi is the executive director for Washingtonians for Public Banking and an adjunct professor in political science at Cascadia Community College. He received a PhD in political science from the University of Illinois-Chicago and author of the book “Politics for the 99%.” He currently lives in Tacoma, Washington.

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