California’s state budget outlook is once again grim. On Wednesday, Gov. Gavin Newsom revealed that the state faces a $12 billion shortfall, thanks in part to President Donald Trump’s trade wars and the deadly wildfires in Los Angeles County.
Lawmakers now face difficult decisions ahead. Cuts to key programs will need to be made. However, crises like these can also create opportunities to rethink financial strategies — changes that might be politically unfeasible under normal circumstances.
As former California state senators, we have been in this position before. And we would now like to propose an idea that would not only help with the budget shortfall but also address two major crises faced by California: mental health problems for our teenagers and the collapse of community news.
What ties these two problems together? They both were either caused by or exacerbated by Big Tech.
To be clear: California has been blessed with the rise of home-grown technology platforms that have revolutionized how we communicate, socialize and shop. Tech has enriched our workforce and our economy, and we are quite proud of these enterprise leaders, in many cases, birthed from our extraordinary public higher education systems.
But there has been a cost and consequence of these endeavors in the mental health of our children and the gutting of the advertising models that sustained independent local news reporting. These costs are borne in both the current California state spending — billions of dollars worth — and through harms to communities.
Evidence is abundant that the use of social media is a major cause of the rise in mental health challenges, especially among teens. According to a report from the U.S. Surgeon General, “Children and adolescents who spend more than 3 hours a day on social media face double the risk of mental health problems, including experiencing symptoms of depression and anxiety. This is concerning as a recent survey showed that teenagers spend an average of 3.5 hours a day on social media.”
California’s school budget already devotes billions of dollars to mitigate these issues — money that is not reimbursed by the companies that helped cause them. What this means is that the public education system is left to shoulder a burden it did not create, diverting resources from academics and enrichment. California has invested heavily in mental health services, not only within its public schools but also through statewide programs. Gov. Newsom’s administration, for instance, has expanded support through Medi-Cal and other state-funded programs to ensure access to mental health care beyond the classroom.
Meanwhile, tech companies have also undercut the business models of local news, with devastating impacts for our communities. Using your personal data — often gleaned from your curiosity as you seek out information from news sources — tech companies have lured away advertising from local news outlets. In the past 25 years, one-third of all news enterprises in California have closed, and more than 68% of journalists have lost their jobs.
Studies have shown that communities without local news are more likely to have corruption, higher municipal financing costs, misinformation and polarization.
So, we propose a strategy that would partly reimburse the schools — thereby reducing the severity of education budget cuts — and also help rebuild community news.
A tiny tax on the revenue earned by big tech companies from using the data of Californians would generate $1 billion. This new revenue would help cover the costs of the public schools in dealing with mental health problems — and thereby obviate the need for many education cuts — and finance an effort to strengthen community news.
We have a common and accepted practice of requiring housing developers, or any business that creates an impact on its neighbors, to mitigate the damage to communities from their actions. These fees pay for traffic, school and environmental impacts.
We should now assess the same cost to these technology platforms for the harms they have caused to California teens, the public school system and independent news reporting.
No one likes new taxes, but most people understand the necessity if the money is going to compelling needs, with accountability and oversight. In this case, the new proposed tax would only be paid by the entities causing the harm. Last month, Google, Meta and Amazon reported first-quarter profits in the tens of billions of dollars.
We can celebrate this success and still ask that they pay their fair share for the betterment of the state, its children and our democracy.
Connie Leyva was a state senator, representing parts of the Inland Empire of Southern California from 2014 to 2022 and is executive director of public television station KVCR. Steven Glazer was a state senator, representing parts of the East Bay from 2015 to 2024.
: What I like about this argument is that it acknowledges the great positive contributions made by big tech yet notes that we routinely ask companies to mitigate the harms caused along the way (whether accidental or intentional). I certainly agree with his idea that some of the funds raised by a big tech fee should help rebuild community journalism. That’s one of the important bits of collateral damage from the rise of big tech.