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 Department 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,” Department 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 decrease in overtime hours for select government employees.

The deal was born of negotiations that began with a proposed funding bill written by Assemblymember Buffy Wicks (D-Oakland), which is 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 for 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.

Rebuild Local News President Steven Waldman said the $30-million pledge to support local news was “modest” but a “meaningful first step.”

“Cutting it by two-thirds moves California in the wrong direction at a time when local journalism is collapsing across the state,” Waldman said. “We urge the Legislature to hold an open, transparent hearing to assess the impact of this shortfall and explore ways to ensure funding matches the scale of the crisis.”

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The kickoff event featured prominent figures from various news organizations, including Inland Empire Community News, KVCR Public Media, Black Voice News, and Frontline Observer, among others. The highlight of the event was a keynote address by Paulette Brown-Hinds, PhD, Chair of the Journalism Innovation Hub+ Fund and Publisher of Black Voice News.

“Both media and philanthropy play a crucial role in advancing a multi-racial democracy and serving the public good. I’ve been particularly excited by philanthropy’s response to the crisis in local news media,” Brown-Hinds said. “As a fund, we are focused on the future, committed to building a stronger news ecosystem by thinking creatively about improving the civic health of our region through community engagement and solutions reporting on vital conditions for thriving communities.”

The Journalism Innovation Hub+ Fund is designed to support innovations in community news, expand reporting on essential conditions, and invest in sustainable models for local news and civic information. The initiative aims to combine philanthropic efforts to enhance impact, connect donors and funders committed to amplifying community voices, and foster more active, informed communities.

The fund’s establishment comes at a critical time. Since the explosion of the pandemic in early 2020, at least 85 local newsrooms in the U.S. have closed. Others have barely remained in operation, cutting staff, salaries, and work hours. About 1,800 newspapers have shut down across the country since 2004. These closures have left many communities as “news deserts,” lacking reliable local news sources.

“Study after study shows how local news fosters informed communities and civic engagement,” Brown-Hinds continued. “We are proud to announce that the Inland Empire has become one of the first regional chapters in California to benefit from this initiative.”

The event also featured remarks from Dean Baquet, former editor-in-chief of The New York Times, who emphasized the critical role of local journalism in maintaining a healthy democracy. “There is an absolute crisis in local news,” Baquet stated. “I’ve visited newsrooms that once had hundreds of journalists and now have just a handful. Collaborative journalism is the way forward. None of these news organizations have the resources to do big investigative stories alone, but together, we can.”

Baquet, who reported on cases of corruption and money laundering between 1990 and 1995, also discussed the need for news organizations to move forward from competitors to collaborators. “Competition was good for journalism when we could do it, but it can’t be sustained anymore. It’s time for us to collaborate to survive and thrive.”

During the Q&A session, Evan Sanford, executive director of the Redlands Area Chamber of Commerce, asked Baquet about his thoughts on whether there are two sides to every story. Baquet responded, “No. There’s no two sides to racism and anti-Semitism. Some stories do have two sides, but most don’t.”

Baquet highlighted the importance of embracing technology in journalism. “We should not run away from tech,” he said. “While there are challenges, there are also tremendous opportunities. Newsrooms must learn to drive change and adapt to the fast-paced demands of the digital age.”

The Journalism Innovation Hub+ Fund aims to support local journalism through collaborative reporting, resources, and innovative solutions. By fostering partnerships and investing in media infrastructure, the initiative seeks to ensure the long-term sustainability of local news and bolster civic engagement.

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