Bradbury's 'first day' proposals would take time

Bradbury's 'first day' proposals would take time
In this photo made Thursday, April 29, 2010, Democrat Bill Bradbury makes remarks during a interview in Portland, Ore. Bradbury has made a state-owned bank a centerpiece of his campaign for governor of Oregon. He's competing against former Gov. John Kitzhaber in the May 18 primary. (AP Photo/Rick Bowmer)

PORTLAND, Ore. (AP) - Democrat Bill Bradbury has reached back nine decades and halfway across the continent to the northern Great Plains for a campaign plank aimed at cranking up Oregon's economy: a state-owned bank.

The candidate for governor says bankers hunkered down in the Great Recession have shut off capital that small businesses need to hire people and reduce the jobless rolls, so the state government should step in to do the lending.

"Seventy percent of the people in Oregon work for small business," he said in an interview with The Associated Press. "The fact is the big banks aren't lending money to small business."

A state-owned bank is the centerpiece of Bradbury's run for the Democratic nomination for governor. The 60-year-old former secretary of state is courting liberals, environmentalists and teachers, but he's considered the underdog against former Gov. John Kitzhaber. The primary votes will be counted May 18.

A state-owned bank, Bradbury said in a position paper, would use the tax receipts now deposited in "a handful of large banking institutions" and "plow a portion of them back into the state of Oregon in the form of loans to small- and medium-sized Oregon businesses." It wouldn't have retail checking or savings accounts. Its main chore would be to get capital flowing through community banks.

Bradbury's inspiration is the Bank of North Dakota, born in 1919 during an era when prairie grain farmers felt oppressed by Minneapolis bankers and railroads. They turned briefly to socialist ideas for relief.

The North Dakota bank endures as a major force in the state's economy, partnering with private banks on economic development ventures and business and agricultural loans, as well as handling other financial services such as check clearing. The bank's profits go to the state treasury.

"It has a very successful track record in North Dakota," Bradbury told The AP. He has spoken of it frequently in campaign appearances and debates. In a paper on jobs, he lists it first among the "solutions we can start implementing on my first day in office."

In fact, though, even with favorable political winds the idea would take months and more likely years to accomplish.

Obstacle No. 1 is Oregon's constitution, which forbids the Legislature to create "any bank or banking company, or monied institution whatever ..."

Bradbury says there may be an argument that a statewide vote on a constitutional amendment isn't required, but it's likely that Oregon voters would, one way or another, have the final say. And that, Bradbury said, could occur only after details are worked out.

"This whole idea needs to be much more fleshed out," he said.

A spokeswoman for Oregon bankers said the idea of a state bank often recurs when times are hard. She disputes the idea that capital has been shut off.

There are tools at hand to accomplish the goals of supporting community banks and increasing access to credit, said Linda Navarro, president and CEO of the Oregon Bankers Association. She said loan guarantee programs run through the state's economic development agencies could be expanded, for instance.

"We are just not sold that there is a need for the infrastructure, risk and cost of a state bank," she said.

Similarly, judging from his strategy, it would take at least two legislative sessions for Bradbury to make good on a second major campaign proposal - boosting state education appropriations a third by cutting back on tax breaks. It was that promise that secured him an endorsement from organized teachers, a major source of campaign funds and other support.

The obstacle to cutting back on tax credits is that each comes equipped with a political and economic constituency, and lobbyists.

Bradbury outlined this plan to give legislators political cover:

The Legislature could put the question before Oregon voters, asking them to order the Legislature to reduce such "tax expenditures" by enough to finance the school spending increase. That would arm legislators to fill in the details of the program and tell lobbyists they were obeying the will of the voters, Bradbury said.

Bradbury aims at about $2 billion in each two-year budget cycle, a figure from the state's Quality Education Commission. The panel does an estimate of what it would take to finance a model education as defined by a study a decade ago by a consensus-minded state commission.

The money, he said, is "critically important" for jobs.

"One of the things that business clearly depends on is a good educational system," he said. "... I have no question that adequate funding of education will be a benefit to the economy of this state.

Copyright 2010 The Associated Press.