Berkeley and San Francisco Vote on Public Banks: $58M Tax vs. No Funding

Berkeley voters are weighing a six-year parcel tax projected to raise $58.3 million to capitalize a regional public bank, while San Francisco voters face a charter amendment that would authorize a public lender with no startup funding attached. Both measures hit the ballot Tuesday, fifteen years after the Occupy protests that followed the 2008 financial crisis first gave the public banking push its momentum.

The two cities' proposals share a goal—government-owned lenders that would hold deposits and finance projects like affordable housing and small businesses—but they take sharply different paths on the money question. And even if both pass, neither bank opens its doors anytime soon. California's public banking framework, in force since 2020, requires state authorization and federal insurance before any institution can operate.

What does Berkeley's Measure Z actually cost homeowners?

Measure Z would start taxing residential improvements at $0.06 per square foot annually in January 2027, with nonresidential improvements at $0.09, plus annual adjustments. A 2,000-square-foot home would owe $120 in the first year. The city estimates the tax would generate $9.2 million in year one, flowing into a special fund to capitalize and support a public bank whose service area includes Berkeley. Returns earned by the fund would be reinvested for the measure's designated purposes.

Debbie Notkin, a board member of the campaign committee Keep Berkeley Money Local, said the bank could finance smaller projects that large lenders often ignore—a food truck seeking $50,000, a housing developer trying to secure vacant land, or businesses installing solar panels.

"The idea over time is to divert as much public money as possible back to the places where the people who pay it in can benefit from it," she told Fortune.

Not every opponent disputes the mission. Paul Mathew, a longtime Berkeley resident and organizer with Affordable Berkeley, said his objection targets the funding arrangement, not public banking itself. He supports financing affordable housing, small businesses, and green infrastructure—but argues neighboring communities should chip in for an institution serving the wider East Bay.

"Why is only Berkeley paying for this regional bank?" he told Fortune. "Everyone should pitch in."

Mathew also warned the commercial property tax could add costs for business tenants before they see any financing benefit. He questioned the evidence behind projected financial returns and said loan defaults would put the investment at risk. Notkin counters that Berkeley benefits from investments in neighboring communities too, and said supporters expect the bank to generate profits over time.

How would San Francisco's Proposition B work?

Proposition B would amend San Francisco's charter to authorize a municipal finance corporation—a publicly owned nonprofit lender that could make loans but would not accept deposits. The city would first need sufficient funding and resources to establish it.

After at least three years of operation, the corporation could seek regulatory approval to become a full public bank. Its priorities would include affordable housing, small businesses, and environmental sustainability. The measure would prohibit investments in specified industries, including fossil fuels, tobacco, weapons, and prisons. An oversight commission would appoint the board running the institution—but the measure provides no startup funding and doesn't specify how much capital the institution would need.

San Francisco Supervisor Jackie Fielder, a supporter, said the measure would create "an institution run by real bankers that is accountable, nevertheless, to public priorities and public policy priorities," KQED reported in July.

Supervisor Alan Wong, who voted against putting the measure on the ballot, said running a bank requires financial expertise, transparency, and protection from political pressure.

"Our city's track record shows that meeting those demands is harder than it sounds," he said, according to Mission Local.

What does this change for taxpayers and the timeline?

For San Francisco, the price tag comes separately from the vote. Funding could come from city appropriations, grants, foundations, or bank contributions. A city controller's analysis cited by the San Francisco Public Press puts the cost of establishing and operating the institution and transitioning it into a public bank at $310 million to $460 million over eight years—roughly $39 million to $58 million per year. Actual costs could vary substantially with interest rates and economic conditions.

Berkeley's timeline has a built-in fallback. Notkin estimates the East Bay bank could open in 2028, pending funding and approvals. If it hasn't received authorization by June 2033, Measure Z would let the fund make loans directly for its designated purposes.

Mathew said he would push for lending concentrated in Berkeley and close oversight if the measure passes. If it fails, he'd consider a proposal with shared regional funding. In San Francisco, a yes vote leaves city officials with the next question—how to pay for it. In Berkeley, Notkin and Mathew both expect it could take a week or two before the outcome is clear.