Hey Zohran! How About a NYC Public Bank?
Zohran Mamdani’s resounding victory as mayor of New York City on Tuesday was the easy part. He now needs to show results. His critics have argued that much of his ambitious agenda—for universal child care, free buses, and neighborhood grocery stores, for example—cannot be accomplished without greatly increasing taxes, and that power resides in Albany, not Gracie Mansion. But there’s one thing Mayor Mamdani could do to generate an additional billion dollars per year without raising taxes: Create a public bank.
As we’ve often written about in these pages, the Bank of North Dakota (BND) now clears a profit exceeding $100 million per year. How? States and cities normally place revenues into global corporate bonds until they are ready to spend the funds. The BND, in contrast, puts them on deposit in local banks and credit unions. The state then plows the interest payments on the lent capital back into economic development programs.
Our first article today is about how BND is now providing low-interest loans to federal employees in the state to help them survive the current federal government shutdown. (Our second piece is an analysis from Kent County, Michigan, that notes that the loss of SNAP benefits for just one month means a $25 million hit to that local economy.)
North Dakota has over 750,000 people, and is about one-tenth the size of New York City. A well-run public bank in NYC could thus generate $1 billion per year, enough to pay for free buses.
Here’s another idea for the new mayor: Residents of NYC have about $2.7 trillion in stocks, bonds, mutual funds, pension funds, and insurance funds. How about a municipal website listing local investment opportunities? Then incentivize residents to move 1% of their savings—about $27 billion—into locally owned businesses. One incentive might be generous tax credits for local investors, as Michigan may soon provide to its own local investors.
The city might also create targeted funds for local investors. A fund for renewable energy might boost the city’s economy by preventing New Yorkers from shelling out $17 billion per year to Con Edison in utility bills. That’s a huge leakage in the local economy, and an eye-popping loss in local jobs and taxes. I bet a lot of local investors would love to get a 10-20% rate of return solarizing the Big Apple.
Smart local leaders need to look beyond tax-and-spend solutions. Mayor Mamdani has a unique opportunity to translate his mandate into action by tapping the full potential of local investment.
Paying subscribers will find other articles of interest:
How to make community ownership—of housing, shopping centers, infrastructure, you name it—the norm of society.
New efforts by the tech start-up Zolidar aim to scale up worker ownership models into tens of thousands of new companies per year.
RSF Social Finance’s efforts to invest in regenerative agriculture.
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NC3 is advancing community investment in Michigan, giving residents a direct stake in local businesses and neighborhood development, utilizing legislation (HB4816) that would provide a state income tax credit to a citizen who invests in a Michigan business. At a recent House Finance Committee hearing, NC3 CEO Chris Miller emphasized that empowering everyday Michiganders to invest locally can spur business growth and strengthen community wealth, building on the state’s early leadership in community-capital legislation. HB4816 passed out of the finance committee yesterday, supported by legislators from both parties.
During October’s Coalition Conversation, Miller spoke with Lansing developer Brent Forsberg about the Lansing Growth Fund, a community-focused investment initiative. The fund enables local residents, in particular non-accredited or retail investors, to invest in and help shape their neighborhoods, beginning with a project in SW Lansing called Holmes & Pleasant Grove on the site of the Elementary School that Malcomb X attended. The project integrates housing, small-business support, and workforce development, prioritizing long-term community impact over traditional profit, reflecting NC3’s commitment to a “non-movable economy” that keeps capital circulating locally.
