New Jersey and California learn that what the government giveth, the government can taketh away

There are two problems with direct government funding of journalism. The first is that it opens the door to government interference. The second is that, even if safeguards are built in to protect independence, the money can be reduced or cut off in the event of a crisis.

That is exactly what is happening in New Jersey and California. In the former, that state’s Civic Information Consortium, a pioneering effort to distribute taxpayer funds for journalism and other types of storytelling, is in danger of being zeroed out after receiving $3 million this past year. In the latter, a deal that California officials had reached with Google to pay for news is starting to come apart.

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New Jersey’s Democratic governor, Phil Murphy, has proposed getting rid of the funding in his budget for fiscal year 2026. The consortium calls it “a potentially devastating blow to local media and civic information access across the state. Without this funding, NJCIC’s critical work could cease.”

Since it was launched in 2021, the consortium has granted some $9 million to 56 organizations. It’s administered by an independent board appointed by the governor and run out of Montclair State University. Ellen Clegg and I wrote about it in our book, “What Works in Community News.”

Murphy declined to comment on the cut when contacted by Terrence T. McDonald of the New Jersey Monitor, but McDonald noted that the governor’s office had said earlier this year that his budget proposal would include “some belt-tightening.” Even so, McDonald observed that next year’s budget was on track to be larger than the current year’s.

The California situation stems from a much-criticized deal that the state cut with Google last year. According to Jeanne Kuang of CalMatters, Democratic Gov. Gavin Newsom has reduced a $30 million allocation to help pay for local news to just $10 million for the coming year as he wrestles with a $12 billion deficit.

That, in turn, trigged a cut by Google from $15 million to $10 million. The money — now just $20 million instead of $45 million — will be administered by a newly formed California Civic Media Fund, which Kuang writes will comprise “a board of publisher representatives to determine how to distribute it.”

California’s five-year deal with Google was reached after the state abandoned efforts to pass legislation that would have taxed Google for the news that it repurposes. One version of the tax would have brought in $500 million a year.

There are all kinds of problems with what essentially amounts to a link tax, started with the reality that news publishers benefit when Google links to their content. Users who click through encounter those publishers’ advertising, or may even be induced to subscribe if they have a paywall.

Now publishers are facing a much deeper threat from Google, as the search giant is going all-in on artificial intelligence, thus eliminating the need to click through.

“Links were the last redeeming quality of search that gave publishers traffic and revenue,” Danielle Coffey, the CEO and president of News/Media Alliance, said in a statement reported by The Verge. “Now Google just takes content by force and uses it with no return, the definition of theft. The DOJ remedies must address this to prevent continued domination of the internet by one company.”

“DOJ remedies” is a reference to recommendations by the Department of Justice after Google recently lost two separate antitrust cases.