Support needed for the Massachusetts Infrastructure Bank bill (H.935/S.579)


A fast take this time out on an interesting West Coast development that could lead to the creation of much-needed state institution here in the Commonwealth. It seems California passed a law last week allowing the formation of up to 10 public banks in cities like Los Angeles—becoming only the second state in the union after North Dakota to allow them.


According to the LA Times, “Public banks are intended to use public funds to let local jurisdictions provide capital at interest rates below those charged by commercial banks. The loans could be used for businesses, affordable housing, infrastructure, and municipal projects, among other things.


“Proponents say public banks can pursue those projects and support local communities’ needs while being free of the pressure to obtain higher profits and shareholder returns faced by commercial banks. Support for public banks also has grown since the financial crisis a decade ago and since Wells Fargo & Co. was embroiled in a slew of customer-abuse scandals in recent years.”


This is great news for working families and small businesses in the Golden State, and gives a shot in the arm to efforts to start public banks across the US—especially here in Massachusetts, where advocates refiled a related bill in the current state legislative session sponsored by Rep. Mike Connolly (D-Cambridge) and Sen. Jamie Eldridge (D-Acton) after the legislature failed to act on it in the previous session. 


MA H.935/S.579 would establish a more limited Massachusetts Infrastructure Bank “wholly owned by the commonwealth, to increase the currently available sources of infrastructure bond and loan financing to meet the urgent economic development needs of commonwealth cities, towns and state agencies by offering stable, competitive financing and improved transparency, thereby enabling accurate, cost-effective planning by municipalities.”


According to a fact sheet by its main proponent, Mass Public Banking, “The Clear Case for a Public Infrastructure Bank,” the need for such a depository in the Bay State is dire:

The American Society of Civil Engineers gives Mass a “D” rating for infrastructure.

  • The Boston Society of Civil Engineers 2013 report card for Mass lists bridges, drinking water sources, roads, wastewater treatment, public schools, and hazardous waste as being among the most serious deficiencies. 
  • These ratings do not attempt to capture infrastructure expenditures needed to support operational services such as policing, fire, public buildings, health facilities, etc. 
  • In a recent survey of 37 mayors and town managers across the Commonwealth:

38% of respondents reported difficulty raising financing for infrastructure.

54% reported that even priority projects had to be deferred.

96% reported high interest in an alternative to the private market. 


The fact sheet goes on to explain that a new state bank would run as follows:

  • Capitalized by the Commonwealth—no further appropriation needed.
  • Financing at lower cost to Mass cities and towns reducing debt burdens.
  • Interest paid by municipal borrowers stays in-state, increasing bank’s lending capacity.
  • More responsive to Mass municipalities than risk-averse private market.
  • Does not take sales commissions and can provide predevelopment counseling and loans to qualify cities and towns for low interest rates.
  • Does not compete with Mass-based banks or credit unions, but may participate in loans if requested by local bank or credit union.
  • Transparent governance structure—all records are public.
  • Audited annually by state auditor.
  • No branches, ATMs, and does not accept deposits from individuals or businesses.
  • Policies of the board advised by public advisory committee.
  • In cases of natural disasters or pressing needs, can respond quickly and flexibly to preserve life and the area tax base—never tied to private investor noncompete legal agreements.


Good stuff, but the most fascinating thing about the proposal is that the infrastructure bank can be built upon over the years to become a full state bank like North Dakota’s—able to provide individual accounts and fund everything from student loans to affordable housing.


Getting to that point in the current Mass political climate will, like most things that benefit the majority of people struggling to get by in what is said to be a boom economy, require pressure from a significant social movement.


That’s certainly how it went a century ago, according to Vox, when North Dakota farmers disenchanted with the Socialist Party but interested in its program organized a Nonpartisan League, took over the state senate and governor’s seat, and pushed through significant popular reforms… including a state-level public bank. Which exists to this day—even as the remote province has transitioned from an old-school red state (socialist) to a new-school one (Republican). Leading to Trump drubbing Clinton there by 36 points in the 2016 presidential election. This situation being possible in no small part because the bank has been credited with helping the Peace Garden State (aw, nice) to survive the 2008 Great Recession in much better shape than other similar states. By investing in the common people instead of focusing on the wealthiest residents and major out-of-state corporations.


Readers interested in getting involved in the fight for a Massachusetts Infrastructure Bank can check out the Mass Public Banking website at With the help of you and a few thousand friends, who knows? Maybe we’ll have the beginnings of a state government that focuses on public need rather than private greed.


Townie, the (newly revived) occasional column on state and local politics, is written for DigBoston by Jason Pramas—its executive editor and associate publisher. Copyright 2019 Jason Pramas.