By Michael Phillips | CABayNews
San Francisco is not cutting $5 million checks to Black residents—but City Hall just made sure that idea never really goes away.
Just before Christmas, Mayor Daniel Lurie signed an ordinance creating a new San Francisco Reparations Fund, reviving one of the most controversial policy proposals ever floated by a major American city. The move came as San Francisco faces a budget deficit projected at up to $1 billion amid ongoing revenue shortfalls and potential federal funding impacts.
Supporters call it progress. Critics call it lunacy. The truth lies somewhere in between—and it matters.
What It Actually Does
Despite breathless headlines, the ordinance does not authorize reparations payments of any kind.
The measure, passed unanimously by the San Francisco Board of Supervisors, creates a category-four city fund—essentially a financial container. It begins with zero dollars and no automatic access to taxpayer money.
Key points often glossed over:
- The fund is empty.
- It is designed primarily to receive private donations from individuals, corporations, or foundations.
- Any use of public funds would require separate legislation, a dedicated revenue source, and mayoral approval.
- Mayor Lurie has explicitly stated that no taxpayer money will go into the fund given the city’s budget crisis.
In short, this is a structural framework—not a program, not a payout, and not an appropriation.
Why the $5 Million Figure Still Dominates
The controversy stems from the city’s 2023 African American Reparations Advisory Committee (AARAC) report, a sweeping document that included over 100 recommendations addressing historic racial harms.
Among them: a proposed one-time $5 million payment per eligible adult, plus ideas such as debt forgiveness, subsidized housing, $1 home sales, and even guaranteed income supplements stretching generations into the future.
None of those proposals were enacted. But by explicitly tying the new fund to that 2023 plan, San Francisco ensured that the $5 million figure—already labeled “arbitrary” by even some Black leaders—would dominate the public conversation again.
The Fiscal Context
This debate is unfolding at a precarious moment.
San Francisco’s deficit is currently projected at roughly $936 million over two fiscal years, with warnings from city officials that it could reach or exceed $1 billion if federal cuts or revenue declines deepen. Departments are already facing reduction targets, nonprofit funding has been trimmed, and layoffs have begun.
Against that backdrop, even symbolic gestures carry weight.
Fiscal watchdogs note that full implementation of the 2023 reparations plan—hypothetically, if all major recommendations were adopted—could reach tens or even hundreds of billions of dollars, based on eligibility assumptions and per-recipient costs cited in outside analyses. No serious proposal explains how a city with a $15–16 billion annual budget could absorb anything close to that scale.
The Political and Legal Risks
The ordinance also carries significant legal exposure.
Any race-based eligibility criteria—especially in a publicly administered program—invites scrutiny under California’s Proposition 209, which bars racial preferences in public programs, as well as under federal equal protection law. Similar reparations efforts elsewhere have already drawn lawsuits, and even privately funded programs can face challenges when administered by government agencies.
That legal uncertainty is one reason statewide reparations proposals stalled in Sacramento. San Francisco’s approach—building a fund first and worrying about legality later—may buy time politically, but it does not eliminate risk.
A Broader View: Criticism From All Sides
Supporters argue the fund is a moral statement, a way to move “from apology to action” and keep reparations on the agenda even when money is scarce.
Critics span the ideological spectrum:
- Fiscal conservatives see an unaffordable, divisive distraction from core governance.
- Legal analysts warn of inevitable court challenges.
- Some progressive voices question the wisdom of creating expectations with no funding plan.
- Even local NAACP leaders have previously warned that the $5 million proposal risks creating false hope.
In a city grappling with homelessness, fentanyl deaths, public safety concerns, and economic flight, the optics are unavoidable.
A Symbol With Consequences
San Francisco did not roll out $5 million reparations. But it did something more subtle—and arguably more consequential.
By embedding the reparations framework into city law, leaders preserved one of the most extreme policy ideas in modern urban politics at a moment of fiscal fragility. The fund may be empty today, but politically, it is fully charged.
At a time when residents are being told to expect cuts, restraint, and “hard choices,” City Hall chose symbolism over clarity. Whether that gamble deepens trust—or further erodes it—will depend on what comes next.
California Bay News 
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