Governor Gavin Newsom has yet to explain how he plans to pay out more than $640 billion to millions of Californians who are descended from slaves, a noble campaign aimed at providing reparations to those families.
Created by Newsom’s office in 2020, the California Reparations Task Force is currently considering the proposal, which would see an estimated 1.8 million black Californians awarded just under $360,000.
While state legislation is still mulling it over, it’s unclear how Newsom’s state could fund such an undertaking, after it was announced in January, the state now also faces a projected budget deficit of $22.5 billion for the next fiscal year. .
The figure serves as a big drop from the $100 billion surplus the Golden State enjoyed last year, thanks to a litany of federal aid doled out during the pandemic, as well as the capital gains seen during that period.
To make matters worse, a recent estimate arrived at by the California Legislative Analyst’s Office (LAO), the agency tasked with overseeing the state budget, says that the $640 billion estimate is actually an underestimate, with a number real of up to $7 billion. further.
Created by Newsom’s office in 2020, the California Remedies Task Force is considering the proposal, which would see 1.8 million Californians give away $360,000, for a total of $640 billion. The governor has yet to outline how his already embattled administration will pay those sums.
LAO chief tax and policy analyst Chas Alamo made those disclosures last week at the task force’s second in-person meeting in Sacramento, saying he arrived at the actual sum after learning the state reported roughly $ 10 billion less in tax revenue than expected.
The two-day meeting began on March 3 and saw the state funder suggest “several paths that could be possible for final recommendations” for the task force to ensure the proposed bill becomes law, including creating an agency that would oversee the repair. State authorized payments.
The official, however, forgot to outline a plan for how the statistics would actually pay for the large-scale payment program, which many have criticized as unrealistic.
“The creation of a new agency would be initiated through the executive branch of the governor and the reorganization process, but there are other options,” Alamo said, California Black Media reported.
“Regardless of the path, to start a new agency or enact any other recommendation that makes changes to state law, essentially 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 Freedmen Affairs Agency, though aside from the title, not much else was finalized during discussions at the Sacramento meeting, where members of the all-black task force discussed to define the possible role of the organization.
LAO chief tax and policy analyst Chas Alamo revealed last week that the $640 billion estimate is actually an underestimate, and that the actual number is up to $7 billion higher.
After a spirited two-hour debate, the nine members agreed that certain powers would be given to the agency to more easily parse the millions of payments and to whom they go, and to boast a structure that would include a malleable management body that guides each payment.
“The proposed entity would be an agency, an independent agency, that would provide services where none currently exist (and) oversee existing (state) agencies,” explained task force chair Kamilah V. Moore.
Task force members further said that the newly formed agency would facilitate each restitution claim individually, establishing another staffed branch to process claims and assist claimants in proving eligibility through another department of ‘ genealogy’.
The proposed agency would also be responsible for the implementation and operation of policies and programs created to further help beneficiaries, members said.
Over the course of the two days, no member came up with any plans for how the state budget could support such a monumental undertaking, the costs of which could rise rapidly as plans move into more advanced stages.
Newsom, already facing a simultaneous housing and homelessness crisis in his state, is now under pressure to explain how exactly his task force’s plan can become a reality.
Some have postulated that a possible source of funding could be obtained by raising taxes on the wealthy, a practice that is far from taboo when looking at the state’s record of doing so.
However, as mentioned above, state tax revenues are markedly lower than last year, and California already holds the dubious distinction of holding the highest top income tax rate of any state, at 13.3 percent.
The top 0.5 percent of state taxpayers currently dole out enough money to cover more than 40 percent of the state’s income tax, meaning that putting more pressure on those citizens could cause some to leave their homes for deeper places. financially forgiving.
Meanwhile, tax revenue in the current fiscal year was about $23 billion lower than last year’s at the end of last month, The Wall Street Journal reported, making the sum of $640 billion, which now appears to be a generous understatement, is even further out of reach.
The idea of giving reparations to black citizens has become popular across the United States, with cities like Boston, Massachusetts, St Paul, Minnesota, and St Louis, Missouri, as well as California cities, San Francisco, and Los Angeles, among them. who have established similar working groups.
Evanston, Illinois, in 2021 became the first US city to provide reparations to its Black residents, including providing housing grants.
The idea of giving reparations to black citizens has become popular across the United States, with cities like Boston, Massachusetts, St Paul, Minnesota, and St Louis, Missouri, as well as California cities, San Francisco, and Los Angeles, among them. who have established similar working groups
Most recently, politicians in Shelby County, Memphis, voted to allocate $5 million for a feasibility study that will “establish, develop, and implement repairs.”
Cities such as Boston, Massachusetts, St Paul, Minnesota, and St Louis, Missouri, as well as California cities, San Francisco, and Los Angeles, have also established task forces and panels to come up with their own repair plans.
In California, members of the black community have remained divided on the plan, with one woman saying racial injustice would not be solved “if we just throw money at it.”
Others have accused the scheme of being nothing more than a publicity stunt aimed at marketing rather than offering genuine support for black Americans.
The task force has until July 1 to publish its recommendations and describe exactly how the repairs will be carried out.
Then, it will be up to the legislators to decide whether or not to adopt them.