California's Governor Gavin Newsom's budget revision has tightly reduced state funding for newsrooms. Originally aimed at allocating $30 million, the budget now proposes only $10 million for the 2025-26 fiscal year due to a $12 billion deficit influenced by external economic factors, including Trump's tariffs and rising healthcare costs. This budget revision undermines a previous agreement with Google and others to collectively fund California news publishers, who are facing challenges due to digital disruption, amid ongoing legislative battles about compensatory payments from tech giants to news outlets.
The state's contribution was hatched as a compromise settlement that would lead to the withdrawal of two bills that threatened to force payments from technology companies to news publishers.
A deal was struck where the state, search giant Google and others would provide nearly $250 million in funding to support California news publishers.
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