California Governor Vetoes Tax Exemption for Reparations Payments

On September 30, Gov. Gavin Newsom vetoed Assembly Bill 2186, which would have exempted future reparations payments from California personal income tax. The measure, introduced by Assemblymember Tina McKinnor, aimed to prevent tax revenue from offsetting compensation for slavery‑era harms. Newsom cited fiscal uncertainty and the unknown cost of the exemption, noting that the scope of the proposed exclusion could create significant General Fund implications. Despite the veto, Newsom signed a separate reparations law requiring large California companies to disclose slavery‑era transactions, marking a new corporate transparency mandate. The decision reflects ongoing tension between California’s reparations agenda and budgetary constraints.