CalMatters staff in the newsroom in Sacramento on Dec. 5, 2023. Photo by Adriana Heldiz, CalMatters
Scheduling note: WhatMatters is taking Monday off to honor Martin Luther King Jr. and will be back in your inboxes Tuesday.
In 2024, California and Google made a deal to spend $175 million over five years on local journalism. This deal came after Google spent $11 million lobbying against two bills that would have required the $4 trillion company to pay newsrooms for using the news they create.
Gov. Gavin Newsom’s latest budget proposal has no money for that fund. The deal struck between the state and Google, one of the most valuable companies in human history, calls for the tech giant to match state funding. That’s according to Erin Ivie, a spokesperson for Assemblymember Buffy Wicks, an Oakland Democrat instrumental in brokering the deal. So, if the state contribution to the local journalism fund is zero dollars, Google’s contribution to the fund will be zero dollars.
There are no legal consequences if Google never contributes more money to the agreement.
- Ivie: “The deal was never etched in paper and signed by any party — it was a handshake agreement in principle, and no parties are legally bound to its terms. There was never any penalty or consequence built into the agreement, as the arrangement is voluntary, not coercive.”
So far, not even the $20 million that California and Google collectively put into the fund has made it to newsrooms, writes CalMatters’ Yue Stella Yu.
As Stella notes in her story, a 2019 study estimated that in one single year (2018), Google made $4.7 billion from news sites. Alphabet, Google’s parent company, reported making over $100 billion in the third quarter of 2025 alone.
More than 3,200 newspapers have closed since 2005, according to one estimate. Google — which directly benefits from news without having to pay the cost of reporting, illustrating, editing or publishing the news — could pay its part of the original $175 million arrangement hundreds of times over with its 2025 third quarter revenue alone.
Newsom’s office referred questions to Go-Biz, which said the $20 million will be distributed this year.
Read more here.
CalMatters events: Mi Escuelita, a San Diego preschool, is transforming how young children recover from trauma. Join our event on Feb. 5, in person in Chula Vista or virtually, to hear from California leaders in trauma-informed care about what works, what it takes to sustain it and how policymakers can expand these programs. Register today.
Other Stories You Should Know
State Auditor releases report on housing department
Framers work to build apartments in Castro Valley on Feb. 6, 2024. Photo by Camille Cohen for CalMatters
From CalMatters housing reporter Ben Christopher:
State regulators at the Department of Housing and Community Development have spent the last five years forcing local governments to plan for more new housing in a lengthy, technical process that has left virtually every group involved fuming.
Local governments have bemoaned mandates, which they call unrealistic, and say HCD has foisted upon jurisdictions in an unclear or inconsistent way.
“Yes in my backyard” activists, who want to see local governments allow much more construction, have critiqued HCD for being too lenient on cities and counties that drag their feet.
Now, in a long-awaited report, the California State Auditor’s office has issued its judgment: HCD is doing fine, more or less.
The department met its deadlines in offering local feedback, which was “precise” and “generally consistent,” the report found.
The auditor did offer a handful of recommendations to spread out HCD’s workload and beef up communication between the department and locals. But for local governments looking for vindication or pro-development activists hoping the auditor would champion a more aggressive state crackdown, the report makes for a disappointingly lukewarm read.
Californians rally for health coverage
Advocates gather to call on leaders to address threats to health care coverage on the steps of the state Capitol in Sacramento on Jan. 14, 2026. Photo by Roberta Alvarado for CalMatters
With some analysts estimating that more than half a million Californians would lose Medi-Cal coverage this year due to funding cuts, a coalition of health care advocates, labor unions and progressive legislators rallied at the state Capitol to push lawmakers to find new money to fund medical care, report CalMatters’ Maya C. Miller and Jeanne Kuang.
Under President Donald Trump, billions of dollars in federal funding have been cut from California’s social services programs, including the state’s Medi-Cal program. Demonstrators on Wednesday called for Gov. Newsom and the Legislature to backfill those cuts, particularly to protect the millions of low-income and disabled Californians who would be left especially vulnerable.
- Judy Mark, president of Disability Voices United, at the rally: “We know that you are not responsible for these awful cuts, but now the responsibility does lie in your hands. You have the power to protect us.”
The event underscores the dilemma Newsom faces in his last year as governor, and whether he should increase taxes — a politically thorny endeavor — or allow millions of Californians to lose their health coverage.
One major labor union has proposed a ballot initiative to impose a billionaire tax to make up the federal cuts, which Newsom opposes.
Read more here.
And lastly: Dangerous drivers on CA roads
The Victims of Drunk Drivers Memorial at Pacific View Mortuary and Memorial Park in Corona del Mar on Sept. 24, 2025. Photo by Jules Hotz for CalMatters
California Voices
CalMatters columnist Dan Walters: Mississippi is a smaller state that spends half of what California does on education, but it has done a better job of teaching children to read.
Though teachers usually resist student grade inflation, they’re incentivized to do so because of policies stemming from school officials, writes Glenn Sacks, high school government teacher in the Los Angeles Unified School District.
As insurance commissioner, I will freeze further rate hikes, lead the department to investigate market conduct and work to hold corporations accountable for climate disasters, writes Eduardo Vargas, socialist with the Peace and Freedom Party who is running for Insurance Commissioner.
Other things worth your time:
Renaming US Defense Department could cost taxpayers $125M // The New York Times
Minnesota is just the beginning. CA and NY are ‘next’ // Wired
Judge skeptical on ICE agents wearing masks in case that could have national implications // Los Angeles Times
CA’s wine industry might finally hit bottom next year // San Francisco Chronicle
Kaiser affiliates to pay $556M in Medicare fraud scheme // San Francisco Chronicle
San Jose latest city to face questions whether federal authorities are accessing police license plate camera data // The Mercury News
‘No reasonable explanation’ for DHS officer shooting Santa Ana protester in the face, expert says // The Orange County Register
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Lynn La is the newsletter writer for CalMatters, focusing on California’s top political, policy and Capitol stories every weekday. She produces and curates WhatMatters, CalMatters’ flagship daily newsletter…
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