Evanston Sued Over Reparations Fund
And there are two major problems in transparency with this fund!
A conservative legal group has sued the City of Evanston related to the cash payments program in the reparations fund. You can read their complaint here.
I don’t really have a particularly strong opinion one way or the other on reparations, however I wanted to see how much money they have on hand1. I’ve heard a variety of conflicting numbers. So I did a little research and found some things I’ve never seen before!
The Reparations fund is funded via three mechanisms:
Municipal Cannabis Retailers' Occupation Tax: Back in 2019, it was initially funded primarily through a 3% tax on the gross sales of cannabis within the city. It’s unclear how much this tax has brought in (see below). Ordinance.
Real Estate Transfer Taxes: Effective January 1, 2023, all real estate transfer taxes on properties above $1.5m are transferred to the Reparations fund, up to $1.0m per year. Ordinance.
Donations: The City of Evanston also accepts donations from organizations, corporations, and individuals to support the reparations fund. As of May 1, 2024, the City had received $52,457.22 in donations over the lifetime of the fund.
The strangest thing, though, is that because there is only a single cannabis retailer in Evanston2, they aren’t permitted the publish the actual reparations fund balances because it would reveal an individual taxpayer’s revenue. Here’s what the actual statement says;
Reparations Fund - Treasury Report An unaudited summary of the Reparations Fund pertaining to its revenues, expenditures, fund, and cash balances is attached. As to the 3% Cannabis Retailers’ Occupation Tax on adult/recreational cannabis sales within the City, the Committee should note that per the state statute (35 ILCS 120/11), the City cannot share reasonable statistics concerning the operation of the 3% tax or share allocations received from this tax since there are fewer than 5 adult-use cannabis dispensaries in Evanston. Doing so would be a breach of confidentiality.
The City publishes documents on expenses but we can’t actually know how much money they collect, related to the cannabis tax. This seems like a major problem! The city stated that the transfer tax fund was to supplement the reparations fund due to lower-than-expected cannabis tax revenue .. but we can’t actually know the balances! This is a first for me.
On top of that, the transfer taxes are also confusing. In the last committee report of 2023, they documented they received $3,000,000 in transfer tax revenue. But the ordinance says they are supposed to receive only $1,000,000 per year in real estate taxes and it doesn’t have any terms regarding retroactive transfers.
I don’t think this is a mistake? It seems to line up with their end-of-year balances. This is the balance as of 12/29/2023.
And if I look at the same statement for this year - it shows $1.4 for that account, so they are properly capping it for 2024. 3
Did the city give an additional $2 million bucks to the reparations fund in 2023 or do some kind of retroactive transfers back to 2019? This doesn’t quite add up. I’ve tried to FOIA documents relating to this but was denied, saying I should look at the financial statements online. Please reach out to me or comment if you have any information.
I personally think some of this money should go to help build the fifth ward school and I’ve been trying to build up a case for this.
Technically there are two now since they opened the one down on Howard and Chicago but that’s a recent development
I guess this reveals the cannabis tax revenue, about $400k per year.
I’m not a big fan of Judicial Watch but the complaint looks solid. I have been skeptical of the legality of reparations primarily because there is no solid evidence that the city engaged in housing discrimination.
The historical document put together by the Shorefront guy documents all sorts of discrimination. But none of it was done by the city. Red lining, covenants, etc… didn’t involve the City government. Why should the city pay for someone else’s actions? It makes no sense.
The complaint adds the fact that you don’t even have to document any discrimination to get the money. That seems like it willl be a big problem for the defense.
Given the current makeup of the Supreme Court, is there any doubt that they will be eager to take the case and knock down ‘reparations’?
As a lawyer and constitutional nerd, I am very interested to see how the law develops around race-based policies, ie how does the government demonstrate compelling interest. As an Evanstonian (and taxpayer) I groan at the polarization and expense this case will generate. 😫