As the California legislature comes back into session this month, it is preparing to take up one of the most contentious issues they are likely to face for quite some time—and it’s not the state’s expected $68 billion budget shortfall. Rather, several members of the legislature's black caucus have announced plans to introduce legislation implementing recommendations from the state's Task Force to Study and Develop Reparation Proposals for African Americans.  

Last year, the task force issued a report calling for cash payments of up to $1.2 million to each African American who is living or who has lived in the state.

There is certainly a moral case to be made for recognizing California’s disparate treatment of African Americans throughout its history. Importantly, much of this discriminatory treatment involved the active participation of the state government. Notably, California didn’t ratify the 14th Amendment protecting equal treatment under the law until 1959.  

The past informs the present, and inequalities of opportunity for the descendants of victims of slavery and segregation remain. These enduring inequalities contribute to the reason why African American Californians are roughly 40 percent more likely to live in poverty than whites. Poverty rates for African Americans exceed those for white Americans regardless of education, work effort, or family structure. Of course, the United States has undertaken significant efforts to address the history of unequal treatment for African Americans. Yet, the country has not eliminated disparities in economic opportunity.

Yet even before the state’s finances ran into an ocean of red ink, proposals for massive cash payments to the state’s roughly 2.3 million black residents—not counting former residents who would still qualify—were going nowhere. Estimates suggest that the cost of reparations could exceed $800 billion. To put that in context, that would be nearly 22 percent of the state’s annual GDP, or roughly 2.5 times larger than the state’s entire 2023 budget. Even if spread over time, the taxes necessary to finance such enormous payouts would seriously damage the economy and reduce economic growth for every American. African Americans are unlikely to gain from the higher unemployment, slower wage growth, and less entrepreneurship that would result. The goal of any reparative policy should be to move poor people of color into the mainstream of a growing economy, not to slow economic growth itself.

Moreover, this is an election year, which means a debate over reparations could become more divisive than ever. Polls show that Americans overwhelmingly oppose reparations, but that obscures a deep racial split on the issue. According to a 2022 Pew poll, for instance, 80 percent of white Americans are against reparations, while 77 percent of black Americans support them. Most white Americans oppose reparations regardless of age, socioeconomic status, education, or political affiliation. And, a majority of both Asian Americans and Latinos also oppose reparations, particularly relevant in California. Consider that as recently as 2020, a ballot measure that would have restored race-conscious college admission practices, failed by a 43-57 margin. 

This does not mean that California should do nothing to overcome the downstream effects of slavery and segregation. Taking steps to level the playing field and increase opportunity for African Americans—especially those at the bottom of the economic ladder today—should be part of an equal opportunity agenda for state policymakers.

“The entire reparations program is more than just cash payments,” Assemblyman Reggie Jones-Sawyer, (D., Los Angeles) and one of two lawmakers on the task force, told the Sacramento Bee.  

As I wrote last year, such reforms include eliminating exclusionary zoning—and generally removing barriers to building housing—reforming the police and reducing mass incarceration, giving parents greater choice and control over their schools and the money that funds them, and encouraging black entrepreneurship. Importantly, these are reforms that, while particularly beneficial to African Americans, have the added advantage of helping low-income and struggling Americans regardless of race. Therefore, they have the potential for building a large, multiracial, and cross-ideological constituency.

California’s debate over reparations could easily turn ugly. But it could also provide a platform for reforms that could bring increased opportunity for all struggling Californians.