Should Berkeley voters approve Measure Z? (November 3, 2026 ballot)

Measure Z would ask Berkeley voters to approve a parcel tax to pursue a publicly owned bank focused on affordable housing, clean energy, infrastructure and small-business lending. The choice is between a potentially mission-driven source of financing and a tax-funded project whose approval, governance and local benefits remain uncertain.

The case for

Measure Z would create a dedicated source of funding for public priorities. The official analysis estimates that the parcel tax would raise $9.2 million in its first year and $58.3 million over six years. The money could support lending in areas that conventional banks may not prioritize, with some funds potentially reinvested for future loans. 1

Research offers some support for that goal. A review of studies finds that improving access to finance can help small and medium-sized businesses, although results depend heavily on the loan product, borrower selection and the quality of the institution providing it. Research on community-finance groups also suggests that specialized lenders can support resilient infrastructure and affordable energy. But those findings do not show what Berkeley’s proposed bank would achieve.

There is also a real-world example that public banking can work. The state-owned Bank of North Dakota reported $10.1 billion in assets, $192.7 million in profits and an 18.2 percent return on investment in 2023. 2 Those figures show that public ownership is compatible with financial viability in at least one setting (see Figure 1). But North Dakota has a different legal history, size, mission and economic environment, making it a precedent rather than a forecast for Berkeley.

The case against

The clearest risk is that residents would begin paying before the bank is authorized. Measure Z would collect the parcel tax while the proposed institution still needed a feasibility study, regulatory approval and compliance with California’s limits on public banks. State rules restrict retail activity and competition with local institutions, and California limits licensing to two public banks per year and 10 in total. 3

The measure includes a fallback allowing the fund to make loans temporarily if bank authorization has not been secured by June 30, 2033. That could keep money moving, but it would not end the tax or guarantee that the intended bank ever opens.

Governance is another concern. The City Council would review, allocate and approve the funds, placing public-purpose lending decisions in a structure exposed to elected officials. Studies link politically influenced credit decisions to weaker performance after loans are made, while banking research identifies political interference and poor governance as recurring risks. 4 These studies do not measure Berkeley’s proposal specifically, so they show a credible danger rather than predicting local losses. Audits and reporting could improve accountability, but they cannot eliminate politically motivated or weakly underwritten lending.

The measure also leaves open a question about who benefits. Berkeley residents would pay the tax, while the proposed institution is described as regional and is not required to direct a set share of lending to Berkeley projects. 5 Regional lending might produce broader public benefits, but the measure does not establish how those benefits would compare with Berkeley’s tax burden.