Two months after San Francisco established a Reparations Fund for Black residents, city officials are being sued over the program. The lawsuit claims the fund is “dividing the city rather than trying to unite,” according to plaintiff Richie Greenberg.

The bill, signed just before Christmas, sets up a legal framework for reparations to address what the city identifies as historical systemic harms against its Black community. Eligible residents could eventually receive lump-sum payments of up to $5 million, along with debt forgiveness, property tax exemptions, and priority in employment opportunities.

“San Francisco is engaged in a sordid and unconstitutional enterprise — it is administering funding and wielding public authority to distribute government benefits explicitly based on race and ancestry,” the lawsuit states.

The plaintiffs, including members of the Californians for Equal Rights Foundation (CFER), argue that by using taxpayer-funded agencies like the city’s Human Rights Commission to implement race-exclusive benefits, the city is creating a “racial spoils system” that violates constitutional protections.

CFER previously sued the city in 2023 over alleged racial discrimination in guaranteed income programs. In this case, the organization and its members, including Greenberg and Arthur Ritchie, contend that the reparations fund unfairly prioritizes one racial group over all others, creating inequities in public benefits.

San Francisco Mayor Daniel Lurie has maintained that the fund will not require immediate taxpayer dollars, instead relying on future city or private funding. The city faces a $1 billion budget deficit, but the plan is intended to signal a policy shift rather than provide immediate payments.

Greenberg warned that the program could have severe financial and social consequences. “We need to stop this because it is a tremendous, tremendous amount of funding that would, eventually, basically kill the city,” he said. “It would destroy the city, and it would set up an unworkable situation of who within the city gets preference as opposed to everyone else that would not.”

The case highlights ongoing tensions in San Francisco over race-based policies and the limits of municipal authority to allocate public resources along racial lines.