Tuesday, April 14, 2020

Where There's a Will . . .

On March 19, just two days after the statewide shutdown of all restaurants and bars in Massachusetts, BusinessWest.com reported that Mayor Domenic Sarno had announced that the City of Springfield would "immediately move to offer $222,679 in grants, up to a maximum of $15,000, for qualified restaurants." Sarno is quoted in the article as saying, "As my administration continues to review any and all options to assist our residents and business community during these challenging times, I have asked my chief Development officer, Tim Sheehan, to see what we could do immediately to 'prime the pump' to start to spur a shot-in-the-arm relief and recovery initial assistance program for our restaurants and their employees."

Tonight, WAMC reported that Springfield was designated another $500,000 to help its small businesses. The first round was exclusively for restaurants, but the new round is for businesses of all kinds that agree to retain employees. The report stressed that the money, up to $15,000 for each business, is a grant not a loan, intended "as a bridge until federal help becomes available."

Springfield, of course, is in Massachusetts not New York, and municipal law is undoubtedly different there than it is here. Common Council president Tom DePietro maintains that the City of Hudson is constrained by state municipal law from using any of the lodging tax revenue allocated to the Tourism Board, which now amounts to about $400,000, to establish any kind of relief fund for the restaurants and businesses that are an essential part of what makes people want to come to Hudson. The law that created the lodging tax specified that the percentage of the revenue earmarked for the Tourism Board was to be used "to market the City of Hudson as a destination for overnight and daytrip visitors." What better use of the money now than to support the survival of the very businesses and venues that make Hudson a desirable destination?

On Monday, during the HDC Emergency Task Force meeting, Monica Byrne reported on her efforts to create an upstate emergency loan program for small businesses similar to those that exist in New York City and New Jersey. She also spoke about the possibility of creating a city or county program if a statewide program cannot be established. She reported that she has been investigating how cities can support such a fund.

Despite the argument that the City cannot give away money, the City has done so in the past. Two instances in particular come to mind. In September 2002, the Common Council waived all past due PILOT payments for L&B Furniture--payments that probably amounted to tens if not hundreds of thousands of dollars. The action was taken "to insure the operation would continue" and "to keep manufacturing jobs in the City of Hudson." The resolution that accomplished that can be found on pages 286-287 of the Council minutes for 2002. If the City could give away revenue due to protect jobs on 2002, why can't it use revenue now to protect the very businesses and jobs that generated that revenue in the first place?

In 2005, the voters in the Hudson City School District rejected the district's proposed budget for 2005-2006, and the austerity budget eliminated sports and art and music. Then as now, the school district budget was about four times the City of Hudson budget, but then mayor Rick Scalera proposed that the City of Hudson give HCSD $100,000, "towards HCSD's budget cutting of sports, arts and music," as it was recorded in the Council minutes for July 19, 2005 (see page 318). He justified this by saying the majority of voters in Hudson had voted to approve the budget. At a special meeting on August 3, 2005, the Common Council passed a resolution "authorizing a gift in the sum of $100,000 to the Hudson City School District to fund interscholastic sports and extracurricular activities." 

If it could be done then, why can't it be done now?


  1. I vote YES!! Let's help our wonderful reasturants and businesses!

  2. I wouldn't be too quick to use Hudson history as a judge to what's permitted a NYS city - legally that is. Lots of, shall we say, extra-legal things were done under past administrations. That said, however, the language of the lodging tax law would, I believe, permit the type of spending envisioned here under certain conditions provided the Council was actually willing to do the work necessary to frame the problem and then the proposed solution. But it's work and this Council seems much more interested in passing nonbonding resolutions and (in conjunction with the mayor's office) handing out corporate welfare to the least needy.

  3. Hudson Hall, like many other nonprofits, is grateful to the City of Hudson for its steadfast support of Winter Walk in the form of a grant by way of the Arts, Entertainment and Tourism Committee and, more recently, the Tourism Board/Finance Committee. I’m somewhat puzzled by the current view that the City cannot distribute grants/funds to projects that can demonstrate a benefit to the overall health of our community.

    1. There's this language in the NYS Constitution (Art. 8, Sec. 1) which is problematic (it's quoted below). I haven't done the statutory research to determine to the extent the Legislature has carved out exceptions to this general rule though clearly it has to the extent that grants for the arts, etc. are routinely made as you point out.

      I think the dividing line historically has been the concept of paying for value. That is, the grant isn't a grant, per se, but rather an investment in the granting municipality by way of a third party, usually a not-for-profit (though the State Constitution, per the below) makes no distinction between NFP and for-profit entities. This is the reason the Council, when making its grants, insists on a specific procedure both before and following the actual payment of the granted funds. In the City's case, it has asked for a report on how the event benefited the City that if not provided enables the City to claw back the grant (though it's never done this to my knowledge). And note, too, that the grant has (I believe) always been given to discrete events, not entities themselves for their general purposes. This, too, sets the grants Hudson has typically given in the past apart from those that would be required to help businesses bounce back from the current, unprecedented situation.

      So here's the language from Art. VIII:

      "No county, city, town, village or school district shall give or loan any money or property to or in aid of any individual, or private corporation or association, or private undertaking, or become directly or indirectly the owner of stock in, or bonds of, any private corporation or association; nor shall any county, city, town, village or school district give or loan its credit to or in aid of any individual, or public or private corporation or association, or private undertaking, except that two or more such units may join together pursuant to law in providing any municipal facility, service, activity or undertaking which each of such units has the power to provide separately."