California Gov. Newsom must answer HOW he proposes to pay $640 billion in reparations
Governor Gavin Newsom has yet to explain how he plans to shell out more than $640 billion to the millions of Californians who are descended from slaves — a high-profile campaign aimed at providing those families with compensation.
Created by Newsom’s office in 2020, The California A reparations task force is currently considering a proposal that would see an estimated 1.8 million black Californians receive just under $360,000.
It is still being considered by state legislationit’s unclear how Newsom’s state can fund such an endeavor, after it was announced in January that the state now also faces a projected $22.5 billion budget shortfall for the next fiscal year.
That number represents a sharp drop from the $100 billion surplus the Golden State enjoyed last year, thanks to a raft of federal aid provided during the pandemic and capital gains seen during that period.
The situation worsened in a recent estimate by the California Legislative Analyst (LAO), the agency tasked with monitoring the state budget, that said the $640 billion estimate is actually an understatement, with the true figure being $7 billion. more.
The California Reparations Task Force, created by Newsom’s office in 2020, is considering a proposal that would see 1.8 million Californians receive $360,000 for a total of $640 billion. The governor has yet to outline how his already struggling administration will pay those amounts
LAO Chief Fiscal and Policy Analyst Chas Alamo made the findings last week at the task force’s second in-person meeting in Sacramento, saying he arrived at the true amount after learning the state reported about $10 billion less in tax revenue than was expected.
The two-day meeting began on March 3 and saw the state financier suggest to the task force “several pathways that may be possible for final recommendations” to ensure the proposed bill becomes law – including the creation of an agency to oversee reparations payments authorized by the state .
The official, however, did not outline a plan for how the state would pay for the large-scale benefits program, which many criticized as unrealistic.
“Creation of the new agency will be initiated through the governor’s executive order and the reorganization process, but there are other options,” Alamo said, according to California Black Media.
“Regardless of the path to initiate a new agency or pass any other recommendation that changes state law, fundamentally both houses of the state legislature must approve the action and the governor will have to sign it.”
The proposed agency, officials said, would be called the California American Freedman Affairs Agency — though little beyond the name was finalized during discussions at a meeting in Sacramento where members of an all-black task force tried to define the organization’s future role.
Last week, LAO’s chief fiscal and policy analyst, Ches Alamo, revealed that the $640 billion estimate was actually an understatement, with the true figure $7 billion higher
After a heated two-hour debate, all nine members agreed to give the agency some powers to make it easier to analyze the millions in payments and who they go to, and boast a structure that would include a flexible administrative body to oversee each payment.
“The proposed organization will be an agency, an independent agency, that will provide services where they do not currently exist [and] to provide oversight of existing (government) bodies,” explained working group chairwoman Camila V. Moore.
Task force members also said the agency — which was just coined — would process each restitution claim individually, creating another staffed division to process the claims while helping claimants prove eligibility through yet another “genealogy” division.
The proposed agency will also be responsible for implementation and operation of policies and programs designed to further assist recipients, members said.
For two days, neither member has released plans for how the state budget will be able to support such a monumental event, the costs of which could rise quickly as plans enter more advanced stages.
Newsom, already facing a simultaneous housing crisis and homelessness in his state, now faces pressure to explain exactly how his task force’s plan can become a reality.
Some argue that a possible source of funding could come from raising taxes on the wealthy — a practice that is far from taboo, given the state’s track record.
However, as mentioned earlier, state tax revenues are significantly lower than last year, and California already has the dubious distinction of having the highest income tax rate of any state at 13.3 percent.
The state’s top 0.5 percent of taxpayers currently shell out enough money to cover more than 40 percent of the state’s income tax — meaning the added pressure on those citizens could force some to leave their homes for more fiscally generous regions.
Meanwhile, according to The Wall Street Journal, tax revenues for the current fiscal year were about $23 billion lower than last year, making the $640 billion figure, which now looks vastly understated, even more elusive.
The idea of paying reparations to black citizens became popular across America, with cities such as Boston, Massachusetts, St. Paul, Minnesota, and St. Louis, Missouri, as well as cities in California, San Francisco, and Los Angeles. create similar task forces.
Evanston, Illinois, in 2021 became the first US city to pay reparations to its black residents, including housing subsidies.
The idea of paying reparations to black citizens became popular across America, with cities such as Boston, Massachusetts, St. Paul, Minnesota, and St. Louis, Missouri, as well as cities in California, San Francisco, and Los Angeles. similar task forces
Most recently, politicians in Shelby County, Memphis, voted to allocate $5 million for a feasibility study that would “establish, develop and implement reparations.”
Cities including Boston, Massachusetts, St. Paul, Minnesota, and St. Louis, Missouri, as well as cities in California, San Francisco, and Los Angeles, have also created task forces and groups to develop their own compensation plans.
In California, members of the black community remain divided over the plan, with one woman saying racial injustice won’t be solved “if we just throw money at it.”
Others have accused the scheme of being nothing more than a publicity stunt aimed more at “marketing” than offering real support to black Americans.
The task force must publish its recommendations and outline exactly how the reimbursements will be made by July 1.
Lawmakers will then decide whether to accept them.