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State treasurer talks about ‘baby bonds,’ cannabis banking reform during a visit to Clark County

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Rick Bannan / rick@thereflector.com

Washington State Treasury Secretary Mike Peliciotti is touring the state this summer, recently stopping in Clark County to talk about the major projects his office is pushing for in terms of funding.

Pellicciotti, a former Washington Democratic state representative who took over as treasurer after defeating incumbent Duane DAvedson in 2020, spent a few days in southwest Washington last week. Part of his tour included a meeting with local Rotary Clubs and Chambers of Commerce on local issues, particularly regarding the economy.

Rural issues were of interest to Belliciotti, who earned a master’s degree in rural development and worked on these issues in Indiana before heading to law school and starting his political career in Washington.

“I think what we’ve seen in the last few decades is capital absorption from rural America in general, but including rural Washington,” said Belliciotti.

In an effort to help bridge the gap, Belliciotti advocated the Washington Fund for the Future. The program will invest $3,200 in “baby bonds” for each child born under Apple Health, Washington’s version of Medicaid.

The money will go through the Washington State Board of Investment. Depending on how the investments perform, Pelicutti said $10,000 to $15,000 could be raised per newborn by the time they become adults. This money can be used in many ways, including additional education in college or careers, starting a small business or making a down payment on property.

“When we’ve seen over the generations not being able to get the capital needed to get that down payment, we’re basically going to cut that cycle to allow people to own property,” Belliciotti said.

Bellichote said that half of the births in the state are covered by Apple Health, and in more rural areas like Cowlitz County, the number is approaching two in three.

“The wealth gap is getting worse, and if we don’t take the right side of it, we have problems,” Belliciotti said.

The Washington state legislature approved $450,000 in the state’s supplementary budget for 2022 to form a committee to consider the effects of the program. The legislature can formally enact the program next year.

Pellicciotti noted that the program has received local support, including a Vancouver Democratic representative. Monica Stoner along with Representatives North Clark County Senator Ann Rivers, R-La Center, and Representative Paul Harris, Republican of Vancouver.

At the national level, Pellicciotti was working on federal legislation that would allow banks to work with cannabis companies nationwide. The Safe and Fair Banking Act (SAFE) would prevent federal banking regulators from restricting banks’ ability to do business with the cannabis industry, even though federal cannabis remains illegal.

Although Washington voters approved the legalization of recreational cannabis in 2012, “Congress did nothing during that time to make (business) environments safe,” Belliciotti said.

The legislation was submitted to the US House of Representatives, but stalled in the Senate. Bellichote noted that the Safe Banking Services Act (SAFE) received support from Democratic US Senator Patty Murray.

“We’ve made real progress in the past few months in increasing the importance of the issue at the national level, and I think we can move beyond that now,” said Belliciotti.

The treasurer reasoned that senators’ different positions on cannabis, from doing nothing about the industry to outright federal legalization, had led to the stalling.

“Convincing the Senate to agree where there is actual unanimity is sometimes more difficult than it should be,” said Belliciotti.

Because they cannot rely on banks, cannabis companies have to rely on cash, which makes them targets of crime. Bellichote said Washington has seen as many as a day of robbery in the cannabis trade, as happened earlier in the year.

“This is not just something that is good for the cannabis industry. This is a public safety and worker safety issue,” Belliciotti said.

Since taking office in 2021, Bellichotti said he has worked to “refinance every bit of debt that we can legally refinance in Washington State,” saving $385 million.

“This is money that would otherwise go to Wall Street in interest payments,” Belliciotti said.

The refinancing was done before the recent interest rate increases. These high rates have already benefited the state with its own investment, Pellicciotti said. The state’s local government investment pool allows cities and counties to use the resources of the treasurer’s office in investments for local purposes.

The cashier’s office also allows governments such as schools and fire districts to finance capital purchases through the office, lowering interest rates.

Clark County Pellicciotti stated that the program had funded land acquisition for Clark County Fire District 10, a water tender for Fire District 13 and a ladder truck for Fire District 3.

“These are fire zones (where) it would be very difficult for them to finance this type of purchase…but by putting them together, we achieved very low interest rates,” Belliciotti said.

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