January 4, 2012

Click here to view and here to listen to Daren Bakst discussing this Spotlight report.

RALEIGH — North Carolina should do more than make a one-time cash payment to living victims of the state’s forced sterilization program. That’s the assessment of the John Locke Foundation’s top legal expert. He recommends lifetime tax breaks, special license plates, and other policies in a new Spotlight report.

“There is no feasible way that victims of forced sterilization will be made whole through any compensation scheme,” said Daren Bakst, JLF Director of Legal and Regulatory Studies. “But North Carolina can and should take a serious step toward righting a wrong and providing meaningful compensation to victims. This report offers ideas for the type of compensation that should be made, along with ways the state can find money to pay the bill.”

Bakst’s report first addresses the two main questions that have been driving the compensation debate: who should qualify for compensation, and how large a payment the state should make.

Only living victims of forced sterilization tied to North Carolina’s eugenics program should qualify for state compensation, Bakst said. While North Carolina forcibly sterilized about 7,600 people, recent estimates of living victims range from 1,500 to as many as 2,944.

“There is no quicker way to undermine the idea of compensating the victims than attempting to compensate victims’ descendants,” Bakst explained. “The harm imposed on the victims is clear, direct, and not speculative. Any harm to descendants is based on conjecture.”

Adding descendants to the compensation list would hurt the victims, Bakst said. “There would be less money available to be provided to the victims themselves,” he said. “Compensating descendants also opens the door to discussions of unrelated issues such as slavery reparations or reparations for descendants of those held in World War II-era Japanese internment camps. The state should not cross the bright line distinguishing compensation for living victims and compensating descendants.”

Once the state finalizes who it should pay, the next question involves the payment’s size. While most discussion involves one-time lump-sum payments, Bakst offers a series of recommendations “designed to complement each other.”

The report starts with a figure of $20,000 per living victim. That’s based on the $20,000 payments tied to a 1988 federal law providing compensation to living victims of Japanese internment camps.

“That $20,000 number is a good starting point,” Bakst said. “A reasonable concern is the potential total cost. Paying that sum to roughly 2,900 people would cost the state $58 million. But the real cost likely would be much lower. First, the number of living victims is likely smaller than 2,900. Second, many victims likely never would come forward because of shame or privacy concerns.”

Providing the money in two annual $10,000 payments and setting a five-year statute of limitations on compensation requests would help address budget concerns.

“Even with our state’s budget woes, the compensation program should be a priority,” Bakst said. “The state should not drag its feet as the number of living victims declines.”

After settling on $20,000 for living victims, Bakst recommends that North Carolina allow taxpayers to designate part of their tax payments for eugenics compensation. “Similar to the state’s taxpayer-supported campaign finance program for appellate judges, taxpayers should be able to check a box on their tax returns allocating $3 to a fund for compensating forced sterilization victims.”

Bakst’s third recommendation calls on the state to divert $7 million from its judicial campaign finance fund to pay for eugenics compensation.

“A recent U.S. Supreme Court ruling raises serious doubts about the future of North Carolina’s judicial taxpayer financing system,” he said. “The legislature should repeal that taxpayer financing system. Instead of moving the money to state government’s General Fund, the money should go directly to the eugenics compensation fund. The $7 million would make an immediate difference in victims’ lives without the legislature having to appropriate any additional money.”

The report’s fourth recommendation says North Carolina never should require eugenics victims to pay state income taxes again. “These victims should not have to fund the state that committed such a terrible wrong against them,” Bakst said. “The state could address this recommendation through a nonrefundable or — better yet — refundable annual tax credit. It could be based on the average individual income tax in North Carolina. In fiscal year 2009, that average was $1,019.”

A final recommendation calls for a new specialized license plate that would generate revenue for compensation while educating the public, Bakst said. “The amount of revenue generated might be modest, but the money certainly would help, and the education benefits should not be ignored.”

Lawmakers should act quickly, Bakst said. “The clock is ticking on the living victims of North Carolina’s sterilization program,” he said. “The ideas in this report would trigger compensation right away before it is too late for many of these victims.”

“North Carolina should be ashamed of its past actions, but taking action now to compensate victims would demonstrate that the state owns up to its terrible mistakes,” Bakst added. “That is something the state could be proud of.”

Daren Bakst’s Spotlight report, “Compensating N.C.’s Eugenics Victims: Five ways North Carolina can help right the wrong,” is available at the JLF website. For more information, please contact Bakst at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].