Public ‘Bank Of N.J.’ Would Save Pensions, Rev Economy
Above Photo: From nj.com
Gov Candidate Murphy…
NEWARK — Former Wall Street executive turned 2017 Democratic candidate for governor Phil Murphy on Thursday unveiled a radical proposal for reviving New Jersey’s economy and saving its pension system millions in fees: A public bank, owned by taxpayers.
Daring New Jersey to “put our money where our mouth is” Murphy unveiled his idea for a “Bank of New Jersey” as the cornerstone of his economic platform during a speech at the New Jersey Institute of Technology.
“I believe it will have far reaching positive impacts on countless business and communities,” said Murphy.
Murphy said his proposed Bank of New Jersey would work “in tandem with our community banks” and not as a direct competitor. He said the bank’s profits “will be returned to the people of New Jersey as non-tax revenue.”
The idea is not new. The state of North Dakota chartered a state-owned bank in 1919, and began making federally-insured student loans in 1967. Murphy said that the average college graduate in New Jersey would save over $8,000 on their student loans.
Murphy said The Bank of North Dakota returned more than $130 million in returns on its investments to taxpayers.
Murphy said he believes a New Jersey public bank would be even more successful, creating a new revenue to pay down the state’s debt while simultaneously spurring small business investment with more favorable lending terms, offering affordable borrowing to college students, and curbing Wall Street influence on politics.
The benefits would accrue to students, who would benefit from low interest rates for college tuition, for small businesses that would gain greater access to capital, and to municipalities that would no longer need to rely on Wall Street bond houses taking a cut.
“It might just be the difference between a student staying or leaving, a business succeeding or failing and a town growing or declining,” said Murphy.
The state of New Jersey currently has $1.5 billion in banks in Canada, Scandinavia and Asia.
“This is how New Jersey’s dollars have been put hard to work,” said Murphy. “Building the infrastructure…of Japan.”
The Democratic candidate also said such a proposal would also offer substantial savings to New Jersey’s state worker pension funds.
“I’d love to sit down and pitch the pension plans, and say, ‘This is an investment you should consider,'” Murphy said. “We’re paying, still, huge fees (to Wall Street hedge funds) and not getting much in return. It got me thinking, why not pitch this as a compelling investment to the pension plans. It’s something we haven’t done yet, but it’s a potential area of equity funding.”