The Seattle Times editorial board casts cold water on the idea of creating a state bank like the one North Dakota has.
ANOTHER idea in the Legislature for new and questionable spending is the creation of a state bank, to be called the Washington Investment Trust and run by state employees.
The legislation, Senate Bill 5238, is sponsored by two New Deal Democrats, Sen. Bob. Hasegawa of Seattle and Sen. Margarita Prentice of Renton. They are inspired by North Dakota, the only state that operates its own bank.
The Bank of North Dakota has one office, in Bismarck; it holds and manages the state government’s cash. Its deposits are not guaranteed by the FDIC, but by the taxpayers of North Dakota.
All this emerged from North Dakota’s unique political history. At the end of World War I, a prairie socialist movement called the Nonpartisan League was swept into power. It founded the bank and a grain elevator. It was planning to launch a state railroad, but the bank was declared insolvent and the people voted out the governor in a recall.
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The bank survived. It is now the state’s second-largest and it makes a profit for state government.
All that is fine, but the state of Washington does it differently. It manages its cash through the office of Treasurer James McIntire, an elected Democrat. His deputy, Wolfgang Opitz, testified at a hearing that the treasurer’s office has earned almost half a billion dollars for the state in the past three years by putting taxpayer funds into two-year and four-year notes that “do not put the state at risk.”
The state of Washington does not need a bank. Opitz also said the state’s attorneys “have no doubt at all” that Washington’s constitution forbids the state from owning a bank, because the state cannot lend its credit.
So much for a state bank. Our legislators should get back to the serious business of balancing the budget.