Evanston’s reparations committee is planning to increase the current reparations fund by $2.6 million, but they’re still deciding how best to go about it.
So far, the $10 million dollar city reparations commitment has been paid for via use-based cannabis tax, which, according to city data, has only collected $400,000 thus far, enough to fund 16 individual housing grants.
The city plans to acquire an additional $2.6 million to support the remaining 106 beneficiaries in the “ancestor” category.
“We are all very conscious and aware of the fact of a sense of urgency, particularly with our ancestry group. So we’re pushing the envelope,” said City Council Member and Reparations Committee Chair Peter Braithwaite, 2nd Ward, at a Reparations Committee meeting May 5. “We’re trying to find ways outside of the one dispensary that’s coming in that will help us to move forward.”
Housing program is first step
Evanston’s Local Reparations Restorative Housing Program is the first step in the city’s $10 million commitment to deal with slavery’s continuing impact. Officials have slated 4% of the money, or $400,000, for housing.
Applicants who meet the requirements and are selected will get up to $25,000 to help buy or remodel a home or pay down a mortgage. The home must be in Evanston and must be the applicant’s primary residence.
To have been eligible for the current housing program (the application window closed Nov. 5) Black Evanstonians needed to fit one of three categories:
- Black residents who lived in the city between 1919 and 1969 (called “ancestors”).
- Direct descendants of a Black resident who lived here from 1919 to 1969.
- Someone able to submit evidence proving housing discrimination due to the city’s policies or practices after 1969.
The first 16 beneficiaries were randomly selected from the “ancestor” category on Jan. 13. They were only recently announced. Six of the 16 have put all of their funds towards home improvement, and an additional six opted for both home repairs and another benefit, such as a home purchase or mortgage payment.
Options proposed by city lawyer
The committee’s legal counsel, City Attorney Nick Cummings, told the committee and audience of 20 that city staff and Hitesh Desai, the city’s Chief Financial Officer, have come up with two potential routes to get the money quickly.
Desai’s suggestion is either for the city to take out a no-interest loan or a General Obligation bond, which is backed by credit and the city’s taxing power.
“The only concern … with respect to GO bonds is making sure that we actually use the revenue from GO bonds for a race-based program. … Generally, GO bonds are used for things that benefit the community generally, not for specific groups of folks,” Cummings said.
He also noted that there is a concern about whether the bonds can be repaid using the cannabis tax because not all banks can accept cannabis funds – given that the substance is still federally identified as a narcotic.
“But my guess is that there are probably banks that are chartered in Illinois that might be able to because it’s legal in Illinois.”
Other potential funding sources offered
Committee members Robin Rue Simmons and Council Member Devon Reid, 8th Ward, both offered alternatives to fund the 106 people remaining in the ancestor category.
Rue Simmons noted how cannabis sales tax revenue was not the first recommendation she had for the reparations program in 2019. Her initial suggestion was a graduated real estate tax.
The year before passing the reparations measure, the city passed a graduated real estate transfer tax for properties sold at more than a million dollars.
She said that it was appropriate since Evanston’s anti-Black harm is mostly in housing. But the committee did not pursue the tax because cannabis was legalized and came up as an option.
“But I think that we have a responsibility as a committee to be thinking about additional ways to fund the commitments that are also going to be sustainable,” Rue Simmons said at Thursday’s monthly committee meeting.
Rue Simmons also suggested that Evanson consider using $2.6 million of American Rescue Plan Act money to pay for the remaining housing grants, but Cummings mentioned that a few communities who have tried to use similar federal funds for a reparations program are tied up in litigation about it.
Reid changed the tone of the conversation when he brought up the city’s general fund, which has $20 million in it, according to the March 31 quarterly report.
The city’s general fund reserve must sit at 16%, which would come out to $17 million or $18 million that needs to stay there.
“Without having to go through getting a bond or worrying how we’re going to pay it back or any of that stuff, we could transfer $2.6 million and have no worries about our general fund balance,” Reid said. “So I guess my recommendation is that we just make the transfer from the general fund to the reparations fund, without going out for a bond.”
Rue Simmons praised Reid’s recommendation.
“I don’t see Council Member Reid’s recommendation of using our funds out of line of our values here. And so that would be a real statement to have that support from the general fund, if [the money was] available. So I want to continue that for discussion.”
The committee will have additional conversations with CFO Desai in the coming weeks, and the conversation will be continued at June’s monthly operations committee meeting.