Bonds

Reparations programs for state and local governments have begun to spring up all over the country, whether in the form of proposals, established committees and task forces, or hard cash handed out to citizens, the idea of reparations has never had more financial backing behind it.

While none of the reparations plans currently active have been financed by bonds, many of them have used state funds from cannabis tax revenue, federal funds from American Rescue Plan Act, or diverted certain funds from other community or administrative projects.

But while these plans are becoming increasingly popular, states likely don’t have the bandwidth to enact a true reparations program that would meet the standards many advocates say is necessary to begin righting the wrongs of the past.

William Darity, professor of Public Policy, African American Studies and Economics at Duke University and co-author of From Here to Equality: Reparations for Black Americans in the Twenty-First Century, estimates that a federal reparations bill that would eliminate the racial wealth gap would cost at least $14 trillion.

“The total combined budgets for all state and local governments in the United States is less than $5 trillion,” Darity said in an interview with The Bond Buyer. “From the standpoint of sheer capability, states and local governments do not have the capacity to do this.”

Darity believes that while a federal solution is the only adequate one to remedy what he says is a national problem, he does believe that some headway can be made to dismantle some of the policies in place that still harm people of color, such as housing.

“They certainly can dismantle all sorts of policies of their own that produce racial inequities,” Darity said. “But they do not have the capacity to conduct a reparations plan that would erase the racial wealth gap.”

Kyle K. Moore, economist with the Economic Policy Institute, recommends that local reparations plans should include an acknowledgement and apology and provide material redress. He also says that any sub-federal plan that aims to be effective should “specify what harms are being addressed and who will benefit; stay within its capacity to provide redress for its harm–and avoid absolving the federal government from its responsibility; and commit to structural change designed to prevent future racial injustice.”

Reparations plans on the local level began with Evanston, Illinois, which was the first city in America to announce a local reparations plan in 2021. There have since followed efforts from St. Paul, Minnesota, Providence, Rhode Island, Amherst, Massachusetts, San Francisco, California and Memphis Tennessee, among many others that have generated various proposals.

The City of Evanston, Illinois passed its “Commitment to End Structural Racism and Achieve Racial Equity” bill in Summer 2019 and shortly thereafter, the cities’ Equity and Empowerment Commission held community meetings to see what reparations would look like for Evanston. Affordable housing and economic development were identified as top priorities and the Local Reparations Restorative Housing Program was established.

The program has so far doled out payments of $25,000 to 16 residents in its initial batch, which is meant to be put toward a down payment on a home, mortgages or home repairs.

Applicants must apply for eligibility within 10 categories of definitions, depending on how long one has lived there, and what one intends to do with the money, among other considerations, but does not specify that those to receive funds must be descendants of slaves, as the program identifies eligible applicants as Black or African Americans having origins in any of the Black racial and ethnic groups of Africa but the person must reside in Evanston at the time of disbursement of funds.

Funding for the program came from the first $10 million of the City’s Municipal Cannabis Retailers’ Occupation Tax, a 3% tax on gross sale of cannabis. Amherst, Massachusetts, has made similar efforts to divert its cannabis sales tax revenue, creating a fund to allocate $2 million in reparations over the course of a decade or $205,000 per year, its maximum annual contribution.

Amherst City Councilor Michele Miller said it makes sense to refer to the fund as “an endowment fund” but the committee has yet to pin down what eligibility for the program may look like.

Others such as Providence, Rhode Island and Memphis, Tennessee, who’ve committed $10 million and a proposed $5 million respectively from the large sums of money received from the American Rescue Plan Act, but according to ARPA rules, those funds cannot be limited to specific communities, and therefore have to be put into programs focused on poverty alleviation.

Providence has taken direct cash payments off the table and instead, reparations are paid through investments into small businesses and programs that develop workforce training and financial literacy. For example, the Rhode Island Black Business Association received $150,000 after applying for the program.

But Providence has also called on local institutions to step in and help the city address the issue.

“As the Commission makes specific and strategic recommendations for positive change, private institutions can also step forward and join in the City in investing in residents and neighborhoods of greatest socioeconomic need,” the Providence Municipal Reparations Commission report said. They further recommended that institutions in the area follow Brown University in acknowledging the harm done over the years and secondly, to “actively engage in the work of the City and proactively consider making direct monetary investments in support of the Commission’s recommendations that are best aligned with each institution’s charitable giving policies.”

The largest non-monetary effort so far has been California’s Reparations Task Force, which issued a nearly 500-page interim report on the recommended monetary and non-monetary measures the state could adopt in pursuit of reparations. For example, the task force said the impact of housing discrimination in the state could warrant $223,000 per person or $569 billion. California legislators are expected to consider the recommendations and issue final recommendations this summer.

While those statewide efforts are coming soon, San Francisco’s African American Reparations Advisory Committee submitted a proposal to the city’s Human Rights Commission that would pay out $5 million to every eligible African-American adult living in San Francisco.

The Detroit City Council Reparations Task Force, Boston City Council’s recently formed task force on reparations and the St. Louis Reparations Commission are all hard at work developing solutions for their respective cities. These task forces are typically made up of 9 or so individuals, sometimes smaller, that have experience in areas such as civil rights advocacy, law, academia, public health, among others. 

While many of these efforts are making progress at identifying the problems many cities face, they also run the risk of chalking the whole effort up to a box checking exercise and running away from the larger issue at hand, which is a federal bill that would address reparations.

“I’d really prefer to see folks who are investing so much time and energy into these, what fundamentally have to be ultimately superficial, piecemeal attempts at doing reparations, I wish they would invest their time in forging the political movement that would put pressure on the United States Congress to do the right thing,” said Darity.

“I also fear that if you have this extended array of local projects that are being called reparations, that it will deflect from the effort to pursue a comprehensive federal plan,” Darity said.

Articles You May Like

Commons vote will not pave the way to Gaza ceasefire, says Lammy
Japan’s Nikkei 225 approaches all-time high on Nvidia share rise
The US needs a better strategic narrative or it will cede influence to China
UK statistics chief criticises ministers for misleading tax claims
White House sends $5.8 billion water infrastructure funds to states