Clinton St. Quarterly, Vol. 6 No. 3 | Fall 1984 (Seattle) /// Issue of 24 /// Master# 57 of 73

sen because the raw materials and production skills needed for operation already exist in the community, the business will cut and sell firewood to the regional market, selling retail at the local level and wholesale to Seattle. While these projects are at this stage small, they are the kinds of efforts that, it is hoped, will result in real change in the long run — people working together to improve their lives and communities. Massachusetts has, for seven years, funded community-development finance corporations which operate with the same goals as Shoalwater Jobs, and Florida, Wisconsin, Alaska, California and Indiana have also developed similar programs. It is these kinds of efforts that need state support in the form of technical assistance and capital. 2. CREATE USEFUL JOBS Joblessness is the result of factors over which the unemployed have no control. Yet, it seems clear that the cost of policy mistakes and economic discrimination is being unfairly shared. As a state, we need to take the responsibility for creating jobs for those who need them. This -doesn't mean the creation of meaningless projects that simply pour money down the drain or demeaning work at low wages. A serious jobs program should be directed towards fulfilling the important and unmet needs of our society. A major study by the Washington Planning and Community Affairs Agency, The Washington State Public Works Report, has pointed out that there is a need for over $4.3 billion of critical repair and replacement projects for streets, roads, bridges, water, sewer and storm sewer systems, dams and parks and recreation facilities in the next five years. These are not mindless pork-barrel projects but critically-needed repairs that are necessary if we want to avoid having our roads and bridges collapse. A major state public works program simply meeting the conservative needs outlined by Public Works Report could assist unemployed and underemployed people if the program is targeted to high unemployment areas and strong affirmative action efforts are made to hire and provide training for women, people of color, and others traditionally locked out of these jobs. A program of this sort is being implemented in Missouri, The voters there recently authorized the state to issue $600 million of general obligation bonds to develop an economic recovery plan involving the maintenance and construction of badly needed public facilities. The state has estimated that the plan will attract $113 million in matching grants and generate $1.4 billion in spending throughout the state economy. Altogether, 17,000 construction plus 40,000 other permanent jobs, are expected to be created from the ripple effect. There are, of course, many other needs of our communities for which jobs could be created: quality day care programs, health care services and affordable housing are just a few of the most important. Such a program could also be extended to provide for mass transit, energy conservation and recreation. The state needs to develop a systematic assessment of community needs and then develop an affordable plan to meet those needs. 3 . CAONMD MC UO NN ITTRYOALC COEVSESRT O CAPITAL In 1983, the state’s largest financial institution, Seafirst, was saved from bankruptcy only by being taken over by one of the two largest banks in the world, Bank of America. At that time, 65% of the households in the state did some business with Seafirst. Seattle Times had estimated that Seafirst’s share of Washington’s commercial banking market was about 49%. While Washington workers and businesses were putting their wages and profits into deposits at Seafirst, Seafirst was busy investing that money into shaky energy companies in Texas and Oklahoma. By spring of 1983, Seafirst announced that it had lost nearly $1 billion in those energy investments. Today the loss from those energy investments has been estimated at $2 billion. During a period when Washington industry was suffering from a lack of investment capital and unemployment was rising, our bank deposits at Seafirst were being invested elsewhere and investment capital that could have been used to support Washington businesses and jobs was wasted. D URING A PERIOD WHEN WASHINGTON INDUSTRY WAS SUFFEREING FROMA LACKOF INVESTMENT CAPITAL AND UNEMPLOYMENT WAS RISING, OUR BANKDEPOSITS AT SEAFIRST WERE BEING INVESTED ELSEWHERE. What we need is a publicly accountable financial institution — a state bank — that will invest capital into state businesses, worker cooperatives and public enterprises. Unfortunately, the state constitution prohibits the lending of state funds to any private entity. Changing the constitution requires a 2/3-majority of the legislature and voter approval in a public referendum. While this is an attainable goal, it will take time. A short-term strategy would be to create a private corporation able to provide capital to community- controlled projects and businesses. In the long-run, we need to change the constitution and create a state bank. ( D A T E H S V h E E o L Wr O t- P A te M S r H m E I N N S T G t r T F a U t O e N N gy D ) The state should provide tax credits to businesses which invest their capital into a state development fund. This fund could be a private, non-profit organization loaning capital to small businesses in targeted areas, minority- and women-owned businesses and worker-owned cooperatives. Loans would be contingent on the hiring of the unemployed, women and people of color — at decent wages. The incentive for investing in such a fund could be created by closing two existing tax loopholes. The first loopphole affects Washington-owned insurance companies, which currently profit from a tax exemption that allows them to pay a lower insurance premium than out-of- state firms. The second loophole affects all Washington non-financial businesses, which receive a business tax exemption on all income they earn from interest and dividends. These two exemptions were granted with the intent of providing jobs in the state. According to the Washington Department of Revenue there is, unfortunately, no evidence that jobs have been created as a result of these exemptions. The state could close the loopholes and then allow these businesses a tax credit for each dollar they invest in the Washington Development Fund. If businesses chose to invest all of their new tax liability, it could generate $100 million per year in new investment capital. THESTWAATESHBIANNGKTON (A long-term strategy) The state should create a state bank which, like the state development fund, would make loans to targeted businesses, cooperatives and projects. It would also provide capital to community development finance corporations. The bank could be funded by an intangible wealth tax which is a tax on income from interest and dividends. Washington is one of three states which does not tax intangible wealth in some way. By enacting a minimal tax of 1% on annual income from intangible wealth over $25,000, upwards of $50 million in capital could be generated each year. The state bank 717 BROADWAY E. 12-6pm daily SEATTLE'S BRIGHTEST MASSAGE FACILITY WE OFFER PROFESSIONAL THERAPEUTIC MASSAGE CONVENIENTLY LOCATED AT 62 3 BROADWAY E. COOPERATIVES: People Helping People A cooperative is a business voluntarily owned and controlled by its members. It's operated for them — and sometimes by them — on a not-purely-for-profit basis. Cooperatives originated within an open, "free enterprise” economy, and they have had to survive under competitive .conditions. Today, they exist worldwide and are found within various economic systems. The primary orientation, however, is still the same — service to members. PCC is a large, natural foods cooperative — over 35,000 households as owners. We're sponsoring an event along with Group Health Cooperative of Puget Sound — Co-ops Help You Health Yourself. Come see demonstrations on stress reduction, fitness, nutrition and cooking on Friday, October 12,11 -2 p.m. at the Pike Market Meeting Place. It's free! OCTOBER IS CO-OP MONTH! In honor of Co-op Month, pick up a bottle of Vitamin C free at any PCC store! If you bring in this ad, you will receive one free bottle of SYNERGY PLUS Vitamin C-Complex, 500 mg., 50 count. A $3 retail value/limit one bottle per customer. Good through Co-op Month, October 31, 1984. oop 6504 20th NE, Seattle, 525-1450 10718 NE68th, Kirkland, 828-4621 6522 Fremont N, Seattle, 789-7144 Clinton St. Quarterly 11