If the COVID19 pandemic has shown us anything, it is that some of our school districts—particularly in affluent communities—are deemed more valuable to our financial system than others. Public banking can help us fix that.
Nowhere has this been more evident than in our state’s public schools.
Since COVID, the appalling state of HVAC systems and indoor air quality in some of our schools, particularly those in low-income communities and communities of color, has become terribly apparent.
In Paterson schools, teachers and students are being called back to school buildings with dated ventilation and HVAC systems that require third-party air filters to regulate, and walls and ceilings with leaking and severe mold issues. Maintenance and janitorial work in the district, which would normally be responsible for fixing these issues, has been privatized, and has been inadequate in addressing these issues.
Pre-pandemic, classroom size was already and issue in Paterson schools as well. According to the Paterson Press, in 2019, more than 3,000 classes in Paterson Public Schools exceeded maximum number of students set by state regulations for high-poverty districts, while the district faced a $64 million dollars gap in its budget. (See njersy.co/3gZQsnS.) Social distancing under these circumstances, even with the measures taken, is impossible.
All these issues urban districts face are due to a lack of capital. Exacerbated income inequality in the U.S. has resulted in almost no tax base for us to invest meaningfully in public projects that benefit an entire community.
The results of this situation speak for themselves, as a look at photos from the Paterson Education Association’s recent health and safety walkthroughs will tell you. They are posted at patersonea.org/walkthrough-photos.
These conditions would be unacceptable in an affluent, white district—but in Paterson, even before COVID-19, this has been the standard. Wall Street sees these issues, often issues that the ultra-rich have caused, as opportunities for exploitation and profit.
According to a 2019 article in NJ Spotlight (bit.ly/3nNOlVH), New Jersey public school districts average about $5,100 dollars in debt per student, borrowed from Wall Street and other nefarious sources, and that the SDA had issued in $10.8 billion dollars in bonds. When borrowing from the private sector, state projects can often double or even triple their costs in debt service fees and interest.
We need the state to invest money into accomplishing good things for the public. To do that most effectively, we need a state-chartered public bank in New Jersey, and we need it fast because it can provide the resources we need quickly and efficiently, and it can help break the vicious cycle of Wall Street’s plundering of our school districts and our economy.
So how would a public bank work?
Today, New Jersey, along with every other state except North Dakota deposits revenue into private banks that then invest our public dollars in whatever they see fit, wherever they want (read: not us). The banks’ profits often come from activities that are not in the public interest. They keep the fees; they keep the profits—and they leave the state with no meaningful say in how the money is put to work.
A public bank is different because, by definition, it puts the public first. The state charters a bank in which it can deposit state funds then uses that capital to invest in, get this, New Jersey.
By investing in public school infrastructure, a public bank can help to alleviate these problems, while also creating good union construction and maintenance jobs inside of low-income communities—a win for school faculty and staff, a win for students, and a win for the community at large.
It should be noted that this bank needs to be chartered democratically. The bank’s entire portfolio should be visible to the public, and its board should be composed of stakeholders and elected representatives.
A public bank makes sense for New Jersey. It lets our state invest its own money, and it can move those funds quickly and efficiently—with clear and transparent goals. If you are a hedge fund manager, or profit enormously from state deposits into your bank, this probably all sounds bad. For the rest of us, though, it is time we moved ahead—fast.
Learn more about how a public bank would work and its benefits at bit.ly/3eUNgHB.
Nikki Baker is an instructional aide at Dale Avenue School in Paterson and an Educational Support Professional co-chair for the Paterson Education Association. Baker represents Passaic County on the NJEA Delegate Assembly and the NJEA ESP Committee.
Brandon Castro is the Public Need Program organizer for NJ Work Environment Council. For more information visit njwec.org.