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Economists say reparations for Black Californians could cost the state more than $800 billion if considered

It could cost California more than $800 billion to compensate black residents for generations of over-policing, disproportionate incarceration and housing discrimination, economists have told a state panel considering reparations.

The preliminary estimate is more than 2.5 times California’s $300 billion annual budget, and does not include the $1 million recommendation per older black resident to make up for the health disparities that have shortened their average life span. Nor does the figure count compensating people for property improperly taken by the government or devalued black businesses, two other task forces say the state is maintaining.

Black residents may not receive cash payments anytime soon, if ever, because the state may never catch up to the economists’ calculations. The repair task force is scheduled to discuss the numbers on Wednesday and may vote on whether to adopt the suggestions or come up with its own figures. The proposed numbers come from a consulting team of five economists and policy experts.

Assembly member Reggie Jones-Sawyer said, “We have to go in with an open mind and come up with some creative ways to deal with this.” Gavin Newsom before any compensation became a reality.

In an interview before the meeting, Jones-Sawyer said she needed to consult with budget analysts, other legislators and the governor’s office before deciding whether the pay scale was feasible.

Presumptions of policing and disproportionate incarceration and housing discrimination are not new. The figures emerged in a September presentation as the consulting team sought guidance on whether to use national or California-specific models to calculate damages.

But the task force must settle on the cash now as it nears a July 1 deadline to recommend to lawmakers how California can atone for its role in perpetuating a racist system that continues to undermine black people. continues.

For those who support compensation, the staggering $800 billion amount economists suggest black Americans suffer has underscored the long-lasting harm, even in a state that has Slavery was not officially supported. Critics base their opposition partly on the fact that California was never a slave state and say that current taxpayers should not be responsible for damages associated with events that happened hundreds of years ago.

The task force’s recommendations are just the beginning as the final authority rests with the state legislature, senate and governor.

“It’s going to be a real hurdle,” said Sen. Steven Bradford, who sat on the panel. “How do you make up for the loss of hundreds of years even after 150 years of slavery?”

Financial redress is just one part of the package being considered. Other proposals include paying incarcerated inmates market value for their labor, setting up free wellness centers and planting more trees in Black communities, banning cash bail, and adopting a K-12 Black Studies curriculum.

Gov. Newsom signed legislation in 2020 to create a reparations task force following national protests over the death of George Floyd, a Black man, at the hands of Minneapolis police. While the federal initiative has stalled, cities, counties and other institutions have stepped in.

An advisory committee in San Francisco has recommended a $5 million payout to eligible individuals, as well as guaranteed income of at least $97,000 and personal loan forgiveness. Observers expressed general support, but stopped short of endorsing specific proposals. They will take up the issue later this year.

The statewide estimate includes $246 billion in compensation for eligible Black Californians who were prosecuted for aggressive policing in their neighborhoods and the “War on Drugs” from 1970 to 2020. This would translate to approximately $125,000 for each person who qualifies.

The numbers are estimates based on modeling and population estimates. Economists also included $569 billion in housing loans to end the discriminatory practice of rescheduling. Such compensation would amount to approximately $223,000 per eligible resident who lived in California from 1933 to 1977. The total is considered the maximum and assumes all 2.5 million people who identify as Black in California would be eligible.

Redlining officially began in the 1930s when the federal government began subsidizing mortgages to support homebuying, but excluding most black neighborhoods by marking them red on interior maps. The racial gap in homeownership persists today, and Black-owned homes are often undervalued. Redlining officially ended in 1977, but the practice continued.

Monetary redress will be available for those who meet residency and other requirements. They must also be descendants of enslaved and free black people in America by the 19th century, which excludes black immigrants.

In their report, the consultants suggest the state task force “err on the side of leniency” and consider a down-payment with more money when more evidence becomes available.

“It must be informed to the public that adequate initial payments are the beginning of a conversation about historical injustice, not the end of it,” he said.


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