Gov. Gavin Newsom has yet to explain how he plans to pay more than $640 billion to millions of Californians descended from slaves in a lofty campaign aimed at redressing those families.
The California Reparations Task Force, created by Newsom’s office in 2020, is currently considering the proposal that some 1.8 million black Californians would receive nearly $360,000.
While state legislation is still deliberating, it’s unclear how the Newsom state could potentially fund such a venture after announcing in January that the state also now faces a projected budget deficit of $22.5 billion for the upcoming fiscal year is.
The figure is a sharp drop from the $100 billion surplus the Golden State generated last year thanks to a litany of federal aid during the pandemic, as well as capital gains made over the span.
To make matters worse, a recent estimate by the California Legislative Analyst’s Office (LAO), the agency charged with overseeing the state’s budget, says the $640 billion estimate is actually an underestimate – with the true figure being as high as $7 billion -dollar is more.
The California Reparations Task Force, created by Newsom’s office in 2020, is considering the proposal that 1.8 million Californians would donate $360,000, totaling $640 billion. The governor has yet to spell out how his already embattled administration will pay those sums
Chas Alamo, LAO’s senior fiscal and policy analyst, made the revelations at the task force’s second in-person meeting in Sacramento last week and said he got to the true total after learning the state had about $10 billion reported less tax revenue than expected.
The two-day meeting began March 3 and saw the state financier of the task force “suggesting several avenues that might be possible for final recommendations” to ensure the proposed law becomes law — including creating an agency, which would oversee the reparation government-approved payments.
However, the official failed to outline a plan for how the statistics would actually pay for the large-scale payments program, which many have criticized as unrealistic.
“The creation of a new agency would be initiated by the governor’s executive branch and the reorganization process, but there are other options,” the Alamo said, reported California Black Media.
“Regardless of the path, in order to create a new agency or issue another recommendation making changes to state law, in principle both houses of the state legislature would have to approve the action and the governor would have to sign it.”
The proposed agency, officials said, would be called the California American Freedman Affairs Agency — though aside from the title, not much more was finalized during discussions at the Sacramento meeting, where members of the all-Black task force attempted to define perspective on the organization’s role .
Chas Alamo, LAO’s senior fiscal and policy analyst, revealed last week that the $640 billion estimate is actually an underestimate – with the true number being a whopping $7 billion higher
After a lively two-hour debate, all nine members agreed that the agency would be given specific powers to more easily analyze the millions of payments and who they go to, and would boast a structure that would include a malleable governing body that each payment directs.
“The proposed entity would be an agency, an independent agency that would deliver services where they don’t currently exist [and] Oversight of existing (state) agencies,” said task force chair Kamilah V. Moore.
Task force members said the agency – which was just being formed – would process each restitution application individually and would set up another staffed branch to process applications and assist applicants in demonstrating eligibility through another “genealogy” to help department.
The proposed agency would also be responsible for the implementation and implementation of policies and programs created to further assist payees, members said.
Over the course of the two days, no plan was voiced by any member as to how the state budget could support such a monumental undertaking, the cost of which could quickly escalate as plans progress further.
Newsom, already facing a simultaneous housing and homelessness crisis in his state, is now facing pressure to explain exactly how his task force’s plan can become a reality.
Some have posited that one possible source of funding could be gained through raising taxes on the wealthy – a practice that is far from taboo given the state’s track record in this regard.
However, as noted, 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 top 0.5 percent of state taxpayers currently spend enough to cover more than 40 percent of state income taxes — meaning further pressure on these citizens could result in some leaving their homes and seeking more financially convenient places.
Meanwhile, at the end of last month, fiscal year-to-date tax receipts were down about $23 billion from a year earlier, the Wall Street Journal reported, making the figure of $640 billion — which now seems a gross underestimate — even more out of reach.
The idea of granting reparations to black citizens has become popular across America, including cities such as Boston, Massachusetts, St. Paul, Minnesota and St. Louis, Missouri, as well as the California cities of San Francisco and Los Angeles, which have adopted similar ones set up task forces.
Evanston, Illinois became the first US city to grant reparations, including housing benefits, to its black residents in 2021.
The idea of compensating black citizens has become popular across America, including cities such as Boston, Massachusetts, St. Paul, Minnesota and St. Louis, Missouri, as well as the California cities of San Francisco and LA, which have set up similar task forces
Recently, politicians in Shelby County, Memphis, voted to allocate $5 million to a feasibility study that will “determine, develop and implement reparations.”
Cities such as Boston, Massachusetts, St. Paul, Minnesota, and St. Louis, Missouri, as well as the cities of San Francisco and Los Angeles, California, have also set up task forces and boards to formulate their own reparations plans.
In California, black community members remain divided over the plan, with one woman saying racial injustices will not be resolved “if we just throw money at it.”
Others have accused the program of being nothing more than a publicity stunt aimed at “marketing” rather than offering genuine support to Black Americans.
The task force has until July 1 to publish its recommendations detailing how redress will be made.
The legislature then decides on the takeover.