Gov. Gavin Newsom (D) and state legislators agreed to close a $47 billion budget deficit while allocating $12 million to support reparations for slavery. The Sacramento Bee reported that the budget deal, which includes a mix of spending cuts and withdrawals from the “rainy day” fund, aims to implement reparations-related bills. Democratic Assemblywoman Lori Wilson, chair of the Legislative Black Caucus, noted that this allocation meets the demands of Black lawmakers despite the budget shortfall. detailed the $297.9 billion spending plan, which includes $16 billion in cuts, a 7.95% reduction for nearly all state departments, and the elimination of thousands of vacant positions to save $3.7 billion. Major reductions include $1.1 billion from affordable housing programs, $746 million for healthcare workforce development, and $500 million for student housing. Additionally, a scholarship program for middle-class college students will lose $110 million annually.

The push for reparations began in 2020 during the Black Lives Matter movement, leading to recommendations for massive cash transfers. Despite backing away from cash payments, Democrats persisted with reparations efforts. Proponents argue that while California entered the Union as a free state in 1850, it tolerated racial discrimination for decades. They believe reparations will set a national example.