Gov. Gavin Newsom proposed slashing funding by 67% for a pioneering deal with Google to support struggling California newsrooms, citing financial pressures that have promoted wider budget cuts.
California newsrooms had expected to receive $30 million from the state as part of a deal brokered last year in which Google and the state would jointly contribute money over five years to support local newsrooms through a News Transformation Fund. The state Dept. of Finance confirmed Wednesday that California, instead, will pay out $10 million for the 2025-26 fiscal year.
“The sole reason for the reduction is more limited/fewer resources than projected in the January budget,” Dept. of Finance spokesperson H.D. Palmer said.
Newsom announced Wednesday that the state is facing an additional $12-billion budget shortfall next year. The revised $321.9-billion plan will also include a reduction in healthcare for low-income undocumented immigrants and a cut in overtime hours for select government employees.
The deal was born out of negotiations that began with a proposed funding bill authored by Assemblymember Buffy Wicks (D-Oakland), known as the California Journalism Preservation Act. It would have required Google to pay into a fund annually that would have distributed millions to California news outlets based on the number of journalists they employ. The California News Publishers Assn., of which the Los Angeles Times is a member, backed the larger effort.
It was designed to aid newspapers that have seen their finances collapse in recent years, leaving fewer journalists to cover institutions and communities.
The proposal was modeled after a Canadian bill that has Google paying about $74 million per year. Google fought the bill, arguing its passage would force the company to remove California news from its platform, thus restricting access for Californians.
Instead, the state and Google agreed in August to provide nearly $250 million to newsrooms over five years, starting in 2025, with funding slated for two projects.
The second initiative was a $68 million pledge for Google to fund artificial intelligence in the form of a National AI Accelerator. The AI funding element of the deal drew sharp rebukes from Democratic lawmakers and journalists.
California had pledged $30 million in 2025 and $10 million each of the next four years. Google agreed to an initial payment of $15 million in 2025 and $55 million in total into the journalism fund. Google also agreed to boost its own journalism programs with a separate $50 million grant.
