The Hawaii House Committee on Finance passed a state bank proposal late Wednesday evening that would include political appointees and representatives of the AFL-CIO and the Change to Win Federation on the bank’s board of directors.
House Bill 1033 seeks to establish the Clean Economy Bank of the State of Hawaii to provide financing support and risk management for qualifying clean economy projects to develop a clean energy economy and lessen Hawaii’s dependence on imported energy.
Representative Gene Ward (R – Hawaii Kai-Kalama Valley), opposed to all state bank proposals before the Hawaii State Legislature, said “The bill has good intentions, but unknown state bank start-up costs will add a further burden to Hawaii’s dire fiscal situation, in addition to the unfunded liability of over $7 billion for the state retirement system. A similar state bank proposal had estimated start-up costs of almost $3.2 billion.”
Proponents of state-owned banks contend that a state bank would help small businesses, particularly those engaging in clean energy activities, access capital. Opponents of the bank, including the Department of Consumer Affairs and the Department of Budget and Finance contend that the proposals present a high risk to state funds and that similar objectives could be achieved through existing programs.
“A state-owned bank is an unnecessarily risky proposal that jeopardizes taxpayer’s money that is not FDIC insured,” said Ward. “We need to promote clean energy, but we will never build a sustainable, green economy if we’re spending billions of dollars to finance a couple of million dollars worth of projects.”
The House of Representatives will vote on House Bill 1033 on March 6, 2012. If passed, the measure moves to the Senate for further discussion.