California Reparations Panel’s Recommendations Could Cost State More Than $500 Billion

California’s Reparations Task Force on Saturday approved a detailed plan that, if enacted, could see the state dole out hundreds of billions of dollars in reparations payments to black residents. 

Among the recommendations included in the task force’s report, which comes after a year of work by the panel, is a payment to address harms from redlining by banks that could total as much as $148,099 per resident. The group recommended the state pay black residents $3,366 in reparations for each year they lived in California from the early 1930s to the late 1970s, when the issue was most pervasive.

In addressing the impact of “overpolicing and mass incarceration,” the report suggests each eligible person would receive, on average, roughly $115,260 — $2,352 for each year of residency in California from 1971 to 2020.

Eligible residents include any descendant of enslaved African Americans or of a “free Black person living in the United States prior to the end of the 19th century.” There are roughly 2.5 million African American residents in the state, accounting for nearly 6.5 percent of its population.

The payments could see a 71-year-old lifelong state resident receive $1.2 million in reparations for those and other harms listed in the report, according to the New York Times.

“The initial down payment is the beginning of a process of addressing historical injustices, not the end of it,” the report says.

While the report does not say how much the panel’s recommendations would cost the state, economists estimate the housing and mass incarceration-related payments alone could cost more than $500 billion. This despite the state facing a tough fiscal reality: governor Gavin Newsom announced in January that the state is facing a $22.5 billion deficit in the 2023-24 fiscal year.

The task force will send its final report to state lawmakers before July 1, after which legislators will decide whether to enshrine the recommendations, which the report says are preliminary and would require more research from lawmakers to narrow down, into law.

The panel also suggested state lawmakers should issue a formal apology to black residents.

U.S. Representative Barbara Lee (D., Calif.), spoke before the panel on Saturday and said California is “leading on this issue.”

“It’s a model for other states in search of reparative damage, realistic avenues for addressing the need for reparations,” said Lee, who is running for U.S. Senate.

State Assemblyman Reggie Jones-Sawyer sits on the panel and said after speaking with Newsom in recent weeks, he believes legislation will be approved out of the report. He said he expects to introduce legislation early next year.

“The reality is Black Californians have suffered, and continue to suffer, from institutional laws and policies within our state’s political, social, and economic landscape that have negated Blacks from achieving life, liberty and the pursuit of happiness for generations,” he said. “This really is a trial against America’s original sin, slavery, and the repercussions it caused and the lingering effects in modern society.”

The state panel’s vote comes as San Francisco’s African American Reparations Advisory Committee is set to issue its own final report sometime next month. The panel’s draft plan included recommendations to pay out a one-time $5 million payment per qualifying person. San Francisco’s Board of Supervisors voted unanimously to accept the draft plan, though the acceptance of the draft does not mean the board will ultimately approve all of the proposals included therein. The board can vote to approve, reject or change any or all of the proposals.

If even just 50 percent of the city’s nearly 45,000 black residents met the requirements for the proposed payments, the city would be staring down a $112.5 billion bill. For comparison, San Francisco’s entire budget for fiscal year 2022–2023 is just $14 billion. The budget for the entire state is $308 billion.

If every black resident qualified for the $5 million payment, the city would be on the hook for $223 billion — a cost of $263,000 for every non-black person in San Francisco, according to Steven F. Hayward, a resident scholar at the Institute of Governmental Studies at UC Berkeley.

And that’s without considering some of the other proposals included in the report, such as that the city supplement lower-earning recipients’ incomes to meet the area median income (AMI) of about $97,000, for at least 250 years. Another recommendation was to create “a comprehensive debt forgiveness program” for black residents to cancel student loans, housing loans, and credit-card debt in an effort to give “Black households an opportunity to build wealth.”

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