Finance Committee Reaches Compromise On Funding For Reparations

Report of the Meeting Of The Amherst Finance Committee, June 21,2022

By Maura Keene

The meeting was held over Zoom and was recorded. It can be viewed here.

Present: All members of the Finance Committee, except for non voting member Bernie Kubiak
Staff: Paul Bockelman (Town Manager) and Sean Mangano (Finance Director)

Compromise Solution Reached For Funding Reparations

The Finance Committee voted to recommend funding for the stabilization fund for reparations in FY23 as was done in FY22, using money from free cash equal to the amount the town received in tax revenue from cannabis sales. Because the African Heritage Reparation Assembly (AHRA) was charged with developing a sustainable revenue source, the Finance Committee convened to discuss funding after FY23. AHRA members Irv Rhodes, Amilcar Shabazz, Hala Lord, and Alexis Reed attended in addition to Chair Michele Miller, who is also on the Finance Committee.

Prior to the meeting, Miller prepared a draft of the AHRA proposal for providing a revenue stream for the reparations fund using free cash equal to the amount the town received in tax revenue from cannabis sales for the next three years and then using actual cannabis tax revenue instead, beginning in FY26. This would be after funding for the Community Responders for Equity, Safety, and Service (CRESS) program, the Department of Diversity, Equity and Inclusion (DEI), and the four additional firefighter positions is more established. The draft proposal states that using actual cannabis tax revenue for reparations should continue until the stabilization fund reaches $2 million. It also gives some possibilities on how the money can be used to remedy past harms to the African American community.

Cathy Schoen (District 1) expressed reservations about the plan. She said she supports reparations, but thinks there are too many unanswered questions about who would be eligible, such as length of residency in town, income, and need for documentation. She thought these issues should be specified before the town allocates funds in addition to the $210,000 it contributed from FY21 free cash to establish the stabilization fund. She added that, with the escalating cost of the new elementary school, surplus free cash should go to reducing the debt exclusion override amount needed for that project. She remained concerned about very tight town budgets in the coming years.

Miller responded that Schoen raised some important considerations. The AHRA proposal touches on how to evaluate eligibility for local reparations, but first the Assembly needs to know what sort of budget it will have, and then it will consult with the Black community about possible uses of the reparations fund and decide who would be eligible. She pointed out that the money will remain in the fund while the group develops guidelines and assesses the needs of the community. 

Non-voting member Bob Hegner asked what would happen if there is no free cash in a year. Mangano replied that in that case the town would set up a plan to make catch-up contributions which can be adjusted according to the town’s circumstances in the coming years.

AHRA member Irv Rhodes said that when the town makes a promise, as it did to support reparations, it is committed to honor it. He said, “African Americans are used to hearing promises, but when the money is needed, it is not there.

AHRA member Irv Rhodes said that when the town makes a promise, as it did to support reparations, it is committed to honor it. He said, “African Americans are used to hearing promises, but when the money is needed, it is not there. If I promise I will pay for my kid’s college education, I need to start putting away money years in advance, not when he finishes high school. The town needs to make the promise concrete by identifying a funding mechanism.” Alexis Reed agreed, saying that a commemoration, a celebration, and even a monument are symbols, but we need concrete actions to make institutional change.

In response to questions about the amount of free cash usually available at the end of each fiscal year, Mangano said the town tries to have 5% of the budget for free cash, and anything over that goes to the town stabilization fund to be used for capital projects or in times of emergency. Comptroller Sonia Aldrich said there have been years when free cash was very limited in the tens of thousands of dollars. Steinberg added that the stabilization fund is essential to maintaining essential services in times of severe financial stress, such as the years after the 2008 recession. He noted that circumstances have already changed since the five-year budget projection was developed in April. Inflation has increased, as have interest rates. He projects a $1 million deficit in the coming years.

Miller responded, “I know you don’t mean it, but when I hear those arguments, I hear ‘Black people don’t matter.’ We made a commitment to redress harms, and we need to honor that commitment. We have made a proposal that takes into account all sorts of contingencies. We are not talking about a lot of money.”

Walker echoed her sentiments, saying that the Town Council committed to combating structural racism and financing reparations. She said budgets will be tight regardless of whether this proposal is funded. Other services will need to be funded, and reparations should be as well.

When Schoen noted the town’s recent commitments to funding CRESS, DEI, and the schools, whose population is over half people of color, as well as advancing restorative justice through the newly created Community Safety and Social Justice Committee (CSSJC), Walker made the point  that those other actions are “not enough to remedy hundreds of years of oppression.”

Rhodes noted that the town stabilization fund is currently more than $23 million, and $200,000 is less than a quarter of 1% of the total budget. He said, “If this is a threat to the budget, then we have a huge problem in town.” Amilcar Shabazz pointed out that the AHRA has compromised by giving up earmarking cannabis revenue for reparations. He said the money allocated to reparations will be there. It will not be spent until a full reparations program is developed. If the town were in dire straits, the groups could work cooperatively to meet various needs. He urged the committee to “show a commitment that we matter” with ongoing funding.

Aldrich confirmed that the reparations stabilization fund is like a savings account. The money stays in the account until a spending order is made for its use. 

Public Comment
Meg Gage said she agrees with Schoen that there should be a local strategy before a large fund is created. In fact, she felt that the correct approach is federal funding of reparations, which would cost about $88 billion. She worried that local actions might undermine national efforts and referred to a recent book on reparations, From Here to Equality by William Darity and Kirsten Mullen, that will be discussed at a League of Women Voters webinar with the authors next December or January.

Brianna Owen asked that the Finance Committee “…stop using CRESS as a check box for its commitment to ending white supremacy,” adding, ”Safety for residents who identify as BIPOC cannot be the bar for restorative justice. It should really be the bare minimum. It’s really important for black voices to be at the forefront of what is needed and what funds should be used for.”

Lauren Mills expressed frustration, saying she doesn’t think any Black-led reparations organization should have to come back every year to ask for money and forcing this difficult discussion to take place  every year. She added that federal funds don’t always reach the people who most need it. She spoke for growing a fund that the Black community can draw on as it sees fit.

Brianna Owen asked that the Finance Committee “…stop using CRESS as a check box for its commitment to ending white supremacy,” and added, ”Safety for residents who identify as BIPOC cannot be the bar for restorative justice. It should really be the bare minimum. It’s really important for black voices to be at the forefront of what is needed and what funds should be used for.”

Griesemer made a motion to add the amount from free cash equal to cannabis tax revenue each year into the stabilization fund for reparations until that fund equals $1 million. She stated that this proposal allows the town manager to include cannabis tax revenue in the operating budget at the time the budget is formulated. The cannabis tax revenue is determined in the summer, and the free cash is certified in the fall.

Schoen wondered if the draft proposal, which still requires yearly action to allocate money from free cash, is flexible enough to deal with economic downturns, but Griesemer responded, “if the town is in serious trouble, we work together to come out of it, but this proposal gives us a benchmark to come back to.”

Miller proposed an amendment to the motion to raise the reparations fund allotment to $2 million. Walker seconded the amendment, but it was defeated by a vote of 2-3 (with Schoen, Steinberg, and Griesemer voting against and non voting member Hegner supporting the amendment and Holloway opposing it.)

The original motion passed 4-0-1 with Schoen abstaining. Both Hegner and Holloway supported it, although Holloway said he would feel more comfortable if he knew what purposes the money would be used for. This proposal supersedes the funding proposal passed on June 7, so that measure was rescinded by a unanimous vote.

Finance Committee Unanimously Supports CPA Funds For High School Track And Field ProjectOutgoing Community Preservation Act (CPA) committee chair Sarah Marshall presented the unanimous recommendation of the CPA committee to borrow $800,000 to finance reorienting the high school track and improving the playing field within the track. The regional school committee had allocated $1.5 million to the project which would only cover resurfacing the track, but a previous study financed by CPA funds recommended the larger project, estimated to cost $4.7 million. 

The CPA committee felt strongly that the larger project should be done. The school committee and booster club developed a plan to raise the additional funds through grants and donations. If most of the funding is not secured by January 16, 2023, only the track resurfacing will be done and no CPA funds will be needed. The other three towns in the region have already had their spring town meetings, so the select boards would have to call special town meetings to authorize the additional spending needed. 

The Finance Committee agreed unanimously to recommend using the CPA funds for the project, with Hegner and Holloway also voicing support.

Finance Committee Has Backlog Of Minutes To Be Approved
Although the Finance Committee met almost twice a week throughout May, the last minutes approved are from March 1, 2022. Steinberg noted that the draft for the June 7 meeting was incorrect in stating that no vote was taken on the financing of the North Common renovation, when the funds were recommended unanimously. He stated that he wants to divide the draft minutes for the intervening meetings among those committee members who attended for review, so the committee can accept the minutes and be up to date.