Economic Justice
What is happening?
Today, the United States has more income and wealth inequality than almost any major country. The chasm between the rich and poor is worse now than at any time since the 1920s. Over the last 30 years, the top 1% has seen a $21 trillion increase in its wealth, while the bottom half of American society has actually lost $900 billion in wealth. In other words, there has been a massive transfer of wealth from those who have too little to those who have too much.
Why is it important?
This disparity is the result of decades of uneven and unequal development that is turning the unprecedented prosperity we’ve been experiencing in Oakland, and the US at large, into an engine for new forms of injustice. This disparity is not caused by naturally occurring social and cultural trends; it is caused by decades of poor planning and bad policy decisions that are bound up in the histories of racism, regressive taxation and exploitative banking practices that have left many in dire straits. If we do not address the economic realities that have caused these disparities, the chasm between rich and poor and the related social despair we’re experiencing will only get worse.
What’s been done so far?
➔ Measure T for Progressive Taxation and Measure W for Public Financing passed with large margins. We will now see lower tax rates for small businesses and $4 million worth of vouchers go every two years to Oakland residents to contribute to any political candidate of their choice.
➔ Measure W passed, establishing access to public financing through the use of “Democracy Dollars” for election donations. This program will provide each Oaklander with four vouchers worth $25 each to give to their candidate of choice. “Democracy Dollars” are intended to boost participation in elections and level the playing field of campaign finance, which is currently dominated by a handful of affluent residents, corporations, unions, and outside interests.
➔ A report and recommendations on different configurations for a Enhanced Infrastructure Financing District (EIFD) in Oakland. With an EIFD, we have a chance at realizing large-scale, long-term projects that the private market predominantly ignores and has no incentive to pursue, such as remediation of toxic land in West Oakland and low-rent housing development, addressing the deeply rooted harms of past policies.
➔ The viability study for The Public Bank East Bay was approved and we committed Oakland’s intent to be a founding member.
➔ Introduced legislation in support of the Oakland Education Association strike, recognizing the teachers, counselors, social workers, nurses and other members of the Oakland Education Association who are organizing to improve their working conditions and pay, as well as education overall in Oakland.
What’s coming up next?
Public Banking
A public bank is a government-owned and operated bank that prioritizes public access over profits, offering low-interest loans and funding projects with low revenue such as affordable housing. Carroll’s goal is to see the business plan and state license approved for The Public Bank East Bay in 2023, setting up the bank to open soon after.
Enhanced Infrastructure Financing District (EIFD)
An EIFD will allow us to realize large-scale, long-term projects that the private market predominantly ignores, but are necessary for addressing the deeply rooted harms of past policies, such as remediating brownfield sites for emergency shelter or constructing low-rent housing.
Deep Dive: Public Banking Explained
What is a public bank?
A public bank is a government-owned and operated bank that prioritizes public access over profits, sending any profits made back into the community. In contrast, a private bank prioritizes producing profits to benefit private shareholders, which often either excludes funding initiatives that create enormous social benefit or deals these projects a high interest rate.
Why is it important?
During the Great Recession of 2008, the predatory lending practices of a number of private Wall Street banks resulted in them either collapsing, being forced to merge with larger institutions, or having to be bailed out with taxpayer dollars. As a result, unemployment and foreclosures skyrocketed, with the cost of their profit-motivated decision-making being borne by those with the least to spare.
Countries with public banks however fared the recession well. In the USA, the one bank that was able to withstand the fluctuations and volatility of the market was the Public Bank of North Dakota. This is due to the fact that public banks don’t engage in highly speculative transactions but rather put a huge focus on improving their local communities, using most of their resources to offer low-interest loans to businesses and low-income households, as well as fund projects that don’t have large revenue thresholds such as affordable housing. Instead of foreclosing on delinquent loans, they lean more toward negotiating restructured loans that can be repaid.
We are far overdue for banking institutions whose primary mission is to support economic growth for all, versus just lining the pockets of a few unaccountable executives.
What are some examples?
The oldest and only existing example of a public bank in the United States is The Bank of North Dakota. It was established over 100 years ago by farmers in order to serve fellow farmers in accessing affordable loans. At the time, North Dakota was vulnerable to predatory loans from banking institutions outside of the state and farmers argued that if a state-owned bank existed, its purpose would be to support farmers and residents based in North Dakota rather than carrying profits outside of the state.
This bank has been able to withstand the ebbs and flows of chaotic market trends while providing deeply needed resources such as small business loans, economic and workforce development funds, post-secondary education support through reasonable student loans - all while growing their general fund.
Over 40% of financial institutions around the world are public banks, yet the United States is home to only one.
Tell me more about the Public Bank of the East Bay!
The Public Bank East Bay seeks to provide services that are responsive to deep needs like the development of deeply affordable housing, workforce development and infrastructure that supports environmental resilience.
Adopting Carroll’s 2022 legislation to authorize the viability study was the first step toward economic self-determination for progressive cities in our region. Once the viability study is complete, the bank’s business plan will be written and an application will be made to a state regulatory agency for a license. Once the license is issued, the bank can open for business.
Deep Dive: The Enhanced Infrastructure Financing District (EIFD) Explained
What is an Enhanced Infrastructure Financing District (EIFD)?
An EIFD directs a share of future property taxes to revitalization efforts, affordable housing developments for city residents, public works projects and environmental cleanup -- all without increasing local tax rates.
It is a bond, which is essentially a loan. It anticipates that there will be increases in revenue from property taxes over the next few decades and it gives our city access to these anticipated increases now as a large sum, so we can invest in long-term strategies that go beyond just the four-year election cycle.
What can the EIFD be used for?
Infrastructure, climate change, broadband, and transit
Child care facilities
Libraries and parks
Brownfield restoration
The acquisition, construction, or rehabilitation of housing for persons of very low, low, and moderate income
Acquisition, construction, or repair of commercial structures by the small business occupant, if such acquisition, construction, or repair is for purposes of fostering economic recovery from the COVID-19 pandemic
Facilities in which nonprofit community organizations provide health, youth, homeless, and social services.
Why is it important?
The city administration often uses lack of funds to explain why we can't remediate brownfield sites so we can in turn create emergency housing for the unsheltered, or why we can’t develop, acquire or construct badly needed low-rent housing. With an EIFD, we have a chance at realizing these large-scale, long-term projects that the private market predominantly ignores and has no incentive to pursue, addressing the deeply rooted harms of past policies.
