California Reduces Journalism Initiative Funding by 67%

Categories: California Business NewsCalifornia News

Journalism in California faces significant financial challenges as funding is slashed.

News Summary

Governor Gavin Newsom of California announced a 67% reduction in funding for a journalism initiative intended to support struggling newsrooms, cutting the planned $30 million allocation to $10 million for the 2025-26 fiscal year. This decision comes amid a projected $12 billion budget deficit and subsequently impacts local media organizations that rely on state support during financial challenges. Advocates for local journalism are urging legislative hearings to address the potential repercussions of these funding cuts.

California – Governor Gavin Newsom has announced a significant reduction of 67% in funding for a journalism initiative that was planned to support struggling newsrooms in the state in partnership with Google. Instead of the expected $30 million, only $10 million will be allocated for the 2025-26 fiscal year, reflecting the state’s ongoing financial strain amid a projected budget deficit of $12 billion.

The Department of Finance confirmed these funding cuts, which are part of broader budget adjustments due to declining resources outlined in the January budget update. The revised state budget for the upcoming fiscal year amounts to approximately $321.9 billion and includes cuts across various sectors, notably affecting healthcare services for low-income undocumented immigrants and reductions in overtime for specific government employees.

The original funding arrangement was part of the California Journalism Preservation Act, championed by Assemblymember Buffy Wicks (D-Oakland). This legislative initiative was designed to require Google to contribute to a fund benefitting California news outlets, distributing financial support based on the number of journalists each outlet employs. The act gained endorsement from the California News Publishers Association, which argued for its necessity in helping local newspapers that have faced severe financial hardships in recent years.

Inspired by a similar initiative in Canada where Google contributes around $74 million annually to support local journalism, the California proposal faced opposition from the tech giant. Google raised concerns that if the bill were implemented in its proposed form, it might necessitate the removal of California news from its platform and limit public access to local journalism.

In August, after negotiations, a new agreement was forged, committing nearly $250 million over five years to bolster local newsrooms. This agreement also included an additional $68 million designated for funding a National AI Accelerator, aimed at advancing artificial intelligence initiatives related to journalism. Under the initial financial framework of this deal, California committed $30 million in 2025 and a recurring amount of $10 million for each of the ensuing four years. Simultaneously, Google pledged to contribute $15 million in 2025 and a total of $55 million to the journalism funding initiative, alongside an extra grant of $50 million to enhance its existing journalism programs.

These developments occur against the backdrop of California’s broader economic challenges, indicating a serious concern for the sustainability of local news outlets which have already been grappling with financial difficulties exacerbated by the digital transformation of media consumption. As the state strives to address its significant budget deficit, the impact on local journalism remains a pressing issue that warrants further exploration and action.