REGIONAL— A state-owned and managed bank could help boost investment in rural Minnesota and help level the playing field for small businesses, minority-owned companies, and even college students. …
REGIONAL— A state-owned and managed bank could help boost investment in rural Minnesota and help level the playing field for small businesses, minority-owned companies, and even college students. That’s according to State Auditor and DFL gubernatorial candidate Rebecca Otto, who is calling for the creation of a state bank as part of the fourth of five planks in her “Renew Minnesota” agenda.
Otto, who is among three candidates still in the race for the DFL party endorsement for governor, released her Local Economies Plan late last week and talked to the Timberjay about her ideas. The concept of a state-owned bank is not a new one— in fact, North Dakota created a state bank way back in 1919 as a means of providing working capital for farmers, rural cooperatives and other small businesses that had a difficult time accessing other sources of funding.
Otto said those same challenges remain a century later. “Small businesses tell me all the time that they can’t get access to capital, and that creates a barrier to growth,” said Otto. “This is about equality of opportunity and encouraging local development,” she said.
A state bank would operate much like a traditional bank, but would likely provide lower interest rates, and would have a mission focused on public goals rather than private profits. “It would provide access to capital for small businesses. It would potentially provide crop insurance for small family farms who are being left out in the current system, and it would provide low-cost student loans to ensure the workforce of the 21st century.” The Minnesota State Bank will help level the playing field so that every Minnesotan has an equal shot at success, according to Otto. “This is about the common good.”
Otto said Minnesota needs to do more to encourage the kind of innovation that used to create major employment in the state. “Minnesota’s 18 Fortune 500 companies started as small businesses,” Otto said. “But we’ve stopped creating them. The last Fortune 500 company started in Minnesota was 41 years ago. We’ve slipped to number 37 in new ventures and innovation among the states—and that’s where the opportunity lies,” she said. “We could see significant economic gains as a state by strengthening our small business and innovation communities across Minnesota. I’d like to see us as number one.”
Otto sees several components to helping small businesses succeed, in addition to access to capital. Key among them, she said, is single payer health care. “This would be a game changer for our small business community. It would allow our farmers to focus on growing our food, and innovators with a creative idea to focus on growing a small business without fear of not being able to afford a family health insurance policy,” Otto said.
Other key elements include improving the accessibility and affordability of broadband statewide and building out modern transportation infrastructure, both of which have been tied to improved economic growth. Otto also said the University of Minnesota is an important economic driver. “We must increase funding for the U of M and for the arts, because a strong 21st century economy requires a strong creative class,” she said.
Otto said her plan isn’t just a series of policy proposals, but pieces that fit together as a comprehensive plan. “It’s really about what’s going to drive the economy in rural areas in the future,” she said. “I haven’t been afraid to put out what I think is necessary for our state to be successful.”
Otto is offering her latest proposals with a key decision point in the gubernatorial race just over two weeks away. The DFL state convention will make its gubernatorial endorsement on June 2 in Rochester.
Currently, it’s a three-way race between Otto, First District U.S. Rep. Tim Walz, of Mankato, and state Rep. Erin Murphy, of St. Paul.