Can San Francisco Afford Reparations?

Marc JoffeLater this year, San Francisco Supervisors will consider anambitious plan to make reparations to black residents to compensate them for the lingering effects of slavery and more recent discriminatory public policies. While other Cato scholars have commented more generally on reparations atthe national level andin San Francisco, I will focus here on the fiscal implications and the local economic impact.AHoover institution analysis of the plan estimates its cost at $200 billion, with most of the expense attributable to the recommended $5 million cash payment to each eligible individual. Because the recommendations have not been fully fleshed out, Hoover ’s estimate is necessarily speculative, but appears to be the best available. San Francisco’s reparations committee has yet to provide a financial analysis,stating that “it is not its job to figure out how to finance San Francisco’s atonement and repair.”Assuming the cost is around $200 billion, can the city and county government fund the reparations plan? It can only do so through some combination of large ‐​scale borrowing and tax increases.In the 2022 –23, San Francisco’sgeneral fund budget is $6.8 billion. The remainder of the government ’s overall $14 billion fiscal footprint comes from self‐​supporting enterprises such as San Francisco International Airport (SFO) and the municipal water system. There may be some ability to raise the user fees funding these enterprises, but a ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs