The Brief

There’s no question people in L.A. County consume a lot of pot — nearly a million pounds of cannabis each year according to official reports. While the demand is clearly there, legal cannabis businesses in the city of Los Angeles say they are struggling just to stay open.

Cannabis business owners told LAist they struggle to pay high taxes and fees while they watch illegal operations go unchecked. They say when they’ve tried to talk to city officials, they’ve been stonewalled and shut out.

Some licensed cannabis business owners have had to close. Others say they are months — if not weeks — from having to shut their doors, leading to lawsuits and a rowdy, confetti-filled confrontation at a public meeting.

Many of these business owners are part of L.A.’s Social Equity Program, which was supposed to provide a boost to Black and Brown communities disproportionately targeted by previous criminalization of pot. Instead of a leg up, the business owners told LAist the program has led to a cycle of stress, debts and broken promises.

They’re not the only ones with debts to pay.

One state audit found that grant funds meant to help cannabis businesses may not have been spent as intended. The L.A. Department of Cannabis Regulation (DCR) estimated the city may need to return up to $10 million they received from that grant to the state.

An audit of another grant found that $1.8 million meant to go directly to social equity businesses was also not used according to grant agreements, according to email correspondence LAist acquired through a public records request.

In emailed responses to LAist questions, Jennifer Marroquin, a spokesperson for DCR, said a resolution was made with the state on the $1.8 million figure and that the department has returned nearly $48,000 in grant money that was not spent during the grant term. Marroquin said the state recently granted another $3.5 million to support L.A.’s Social Equity Program.

Marroquin said the program provides “free and low cost legal assistance” to applicants and business owners. The department is a permitting agency, Marroquin said, and “does not get involved in private business disputes, business decisions, collect taxes or engage law enforcement for unremitted taxes.” LAist has reached out to Mayor Karen Bass, who did not respond prior to publication.

Whitney Beatty told LAist that she was promised grants, technical assistance and legal services through the Social Equity Program to help run her dispensary, Josephine & Billie’s in Exposition Park. She’s one of about 240 current cannabis business owners licensed through the program — among about 700 total legal shops in the city.

“ I'm spending tens of thousands of dollars just to stay licensed and compliant, in a system that charges my customers over 40% in taxes while they can walk across the street to an unlicensed shop and buy untaxed, untested product for half the price,” Beatty said at a Cannabis Regulation Commission meeting on July 2.

“This isn't just bad policy, it's a betrayal of the equity promise.”

The high price of cannabis business

Los Angeles created the Social Equity Program in 2019 “to promote equitable ownership and employment opportunities in the cannabis industry, with the purpose of decreasing disparities in life outcomes for marginalized communities directly impacted by the War on Drugs,” according to the city’s website.

Since then, the program has provided about $13 million in grants directly to business owners, according to an LAist analysis of DCR data. In all, the 271 applicants who got grant funding received an average of around $48,000.

Even some business owners who received the maximum total grant amount — about $93,000 — told LAist that the money didn’t go far to cover taxes, fees and other costs they say were imposed on them by DCR.

Business owners have to pay a variety of fees, costing tens of thousands a year.

Taxes on cannabis products in the city of L.A. are significantly higher than those on other products.

In addition to the standard 9.75% city sales tax, cannabis businesses pay another 10% in business tax, and a state cannabis excise tax of 19%. That brings the total tax rate on legal cannabis in L.A. to a staggering 39.75%, according to an L.A. City Council motion presented by Councilmember Imelda Padilla in July.

Padilla’s motion called for an analysis of the potential effects of lowering the city’s cannabis tax in an effort to make L.A.’s shops more competitive — both with unlicensed shops and with neighboring cities that have lower base tax rates like Long Beach (8%) and Pasadena (4%).

Many L.A. business owners like Brandon Brinson say they simply can’t afford to pay all of their taxes in the current market. While Padilla’s motion is still making its way through committees at the City Hall, he and others say they’re running out of time.

Brinson and his wife, Evelyn, opened their business in 2022. Just three years later, Brinson is closing up The Green Paradise shop in Mid-Wilshire. He said the high taxes, fees and rent are to blame.

Brinson spoke with LAist at his cannabis dispensary storefront on July 25, the day before he had to turn over his keys to his landlord. His shop’s shelves were bare.

Brinson said his experience with the social equity program has been frustrating from the start and has “ led to nothing but complete debt and devastation.”

He first applied for the social equity program in 2019, and it took a lawsuit for him to be able to apply for a license.

The lawsuit, filed by social equity applicants against the city in 2020, claimed that some were given an unfair advantage by being allowed to access the application portal before it officially opened. Every second was crucial, they said, in a race that only gave the first 100 applicants an opportunity to open a licensed business. As a result of the lawsuit, the city issued additional licenses to entrepreneurs including Brinson.

“ They just painted this grand opportunity to rebuild the Black community . . .  to help rebuild or restore the harm done from the War on Drugs,” he said. “ So we jumped in. It was a no-brainer at that time.”

Three years after opening, he said social equity applicants like himself received “crumbs” compared to what they were promised in support from the city.

Instead, Brinson said he found himself paying high taxes, fees and rent that pushed him out of business.

To make matters worse, he said he had to compete with an unlicensed shop right next door.

LAist has confirmed that the shop next door is not licensed with the city and sells cannabis.

LAPD Captain Ahmad Zarekani, who heads the department’s Gang and Narcotics Division, told city officials at a committee meeting in February that enforcing cannabis laws is “not the priority” for his department after legalization.

Zarekani said that proactively policing illegal cannabis businesses takes resources away from other priorities. Even when his division makes arrests and shuts down a business, Zarekani said there are rarely consequences for those cases.

“The people basically just move, move to another location, open the business, and they're back making money,” Zarekani told members of the Government Operations Committee, adding that he believes licensed businesses are “victimized” by illegal cannabis shops.

Brinson said that even though he is licensed and the shop next door is not, he is the one who has to deal with law enforcement.

“ The police have come and raided me,” Brinson recounted to LAist before sharing videos of California Highway Patrol officers pulling up to his store and moving his employees away from the cash register.

Kika Keith, owner of the dispensary Gorilla RX in South L.A., said she has had similar experiences with law enforcement.

She told LAist in May that officers had come to her store four times in eight months to collect taxes for the state.

“They come with 20 officers,” Keith said. “They disarmed the security guard.  I mean, you would think that there was an armed killer inside of my store with the level of force and presence that they show, yet they don't go right down the street and shut down those [illicit] stores.”

Kika Keith poses for a photo at her dispensary, Gorilla RX, in South L.A. on May 1, 2025.

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Jordan Rynning

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Brinson and Keith both emphasized that as licensed businesses, they sell tested and regulated products. They say there is no way to know what is in the products at the unlicensed shops.

Other licensed cannabis distributors have decided they will no longer pay the city’s taxes.

“Until we get services, Catalyst Cannabis Co. and a bunch of others . . . are withholding our tax money from the city of L.A.,” Elliot Lewis of Catalyst Cannabis Co. announced at a City Council meeting in April.

Councilmember Padilla, who chairs the city’s Government Operations Committee, said at a June meeting that 700 cannabis businesses had fallen behind on their taxes.

An LAist analysis found there are currently only about 700 cannabis businesses with active licenses. And business owners told LAist their mounting tax bills don’t just go away when they’re forced to close.

Cancelled committee hearings

Kika Keith told LAist that the Cannabis Regulation Commission has for months denied cannabis business owners the opportunity to discuss the effect state and local taxes have had on their businesses.

Thryeris Mason, president of the commission, set aside time ahead of their March meeting for that discussion. Then it was removed from the agenda without explanation.

“At the Feb. 6, 2025, meeting, I did request that taxation be on this agenda,” Mason said at a commission meeting on March 20. “For reasons unknown to me and other members of this commission, that did not happen, so I am going to again request that taxation be placed on a future agenda within the next 30 days.”

Mason added that, as president of the commission, she is responsible for setting the agenda, according to the commission rules and operating procedures.

A discussion of taxation was on the agenda released ahead of a May 15 commission meeting, but was placed last, after eight other items. Business owners told LAist they had been promised a special meeting on the topic, and were concerned there would be too little time to address their concerns.

Keith told LAist that she and other business owners believed control of the commission had been “subverted” by department administrators.

Business owners spoke during the public comments portion of the May meeting. Brinson called the commission a “circus” before showering the podium with confetti.

Brandon Brinson shoots confetti into the air while giving public comments at a Cannabis Regulation Commission meeting on May 15, 2025.

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When it was clear to the business owners that the commission was not going to discuss tax issues, some in the crowd began yelling at the commission members who then called the meeting to a close.

The crowd was guided into an adjacent room.

Soon, more than a dozen officers began pouring out of elevator doors to see a raucous crowd.

Someone in the crowd yelled out, “Hey, bring it in!”

Another called, “Kika, we need you in the group photo!”

One of the cannabis business owners counted down and snapped pictures on a cell phone, before they turned their attention to the police officers.

“I didn’t know you all responded this fast!” A business owner yelled to the officers, “It takes an hour and a half to get to my South L.A. store!”

The next two scheduled meetings were cancelled after the disruption.

Cannabis business owners disrupt the Cannabis Regulation Commission meeting on May 15, 2025, after discussions on tax rates were removed from the agenda.

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Jordan Rynning

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LAist

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“We’re being abused”

The Social Equity Program is managed by the Department of Cannabis Regulation (DCR), a full cost-recovery department that is primarily funded through fees on licensed cannabis businesses. Unlike most other departments, it does not receive money from the city’s general fund. Cannabis business owners like Madison Shockley say they believe this incentivizes the department to charge businesses more in fees, and then waive some of those fees using grant funds from the state, which the department can then keep to pay for department expenses.

“ So they say this fee would've cost $9,000,” Shockley told LAist, “but look, we waived it for you, so we saved you some money. But that was money they were supposed to give to me to spend on what I needed to spend.”

Update: Hours after dispensary owner talked to LAist, state seizes over $10,000 in back taxes from his legal cannabis business

From 2019 through last year, the Department of Cannabis Regulation has received more than $44 million from the state as part of two grants according to agreement records — about $22 million meant to help social equity program applicants and an additional $22 million for the city from transition provisional cannabis licenses to annual licenses.

Business owners aren’t the only ones with questions about where that money went. State officials also say some of those funds were not properly distributed by the city.

The Governor’s Office of Business and Economic Development, or GO-Biz, conducted an audit of the Department of Cannabis Regulation’s grant spending and found issues with how some funds were spent.

In emails obtained by LAist through a public records request, officials for GO-Biz called for $1.8 million of the funds meant for social equity applicants to be returned to the state.

LA’s social equity program director Imani Brown told GO-Biz that, instead of going directly to equity business owners the money in question was used by the city to waive licensing fees of social equity applicants and pay contracted vendors.

The city argued that this use of the funds was approved by the state. William Koch, a deputy director at GO-Biz disagreed, replying that the city department failed to show that the funds were used in line with grant agreements.

What's next

Jason Killeen, an assistant executive director in the department who spoke at a City Council budget hearing on May 2, said the state could make L.A. return up to $10 million of the funds provided from the two grants.

Shockley told LAist that he thinks the department is charging business owners like him more than city policy requires.

He filed a lawsuit against the city last month, claiming DCR is requiring him to pay more than $15,000 in fees for an annual licensing process he says he never applied for.

Shockley said that paying the additional fees, about half of which were set to be due on July 31, would put him out of business. On the other hand, he said, not paying the fees after DCR started the process on his behalf would mean he would become ineligible for a license in 2026, also putting him out of business.

Unable to find a lawyer in time for the hearing, Shockley represented himself in a hearing before Judge Theresa M. Traber on July 25.

Shockley called the hearing a “Hail Mary effort” to keep his business alive.

When Judge Traber considered issuing a temporary restraining order on the city, deputy city attorney Patrick Hagan said the city would agree to put a hold on Shockley’s fees until further hearings could be held.

Shockley said this victory in court saved his business, but that similar situations have forced other business owners to close their doors.

While cannabis businesses struggle, the Department of Cannabis Regulation has been growing.

A report presented to the City Council in April on proposed fee increases found that the department’s staff had grown 73 percent and salary rates had increased 18 percent since fiscal year 2021, when the fees were last updated.

The report recommended that fees be increased to cover the additional costs, but Shockley says business owners haven’t received any noticeable increase in services from the larger department staff.

 ”We've been at every commission meeting, every council meeting,” Shockley told LAist, adding that he has met with the Mayor Karen Bass four times in the past month.

“At the last [Cannabis regulation] Commission meeting, I told the commissioners that we are being retaliated against,” he said, “we're being abused by the leadership of this department . . . and you guys aren't doing a thing about it.”

Caption for lead image: Brandon Brinson poses for a photo in late July next to cleared shelves at his shuttered L.A. cannabis dispensary. Brinson started the business with his wife, Evelyn, as part of the city's Social Equity Program.

Although California lawmakers recently passed a suite of laws intended to bring transparency to the development of new data centers, local communities across the state are signaling that disclosure isn't enough.

California currently ranks third among U.S. states in overall data center density, according to independent trackers like the US Data Center Map, with the state home to 366 of such facilities that are either fully operational, under construction, or moving through the planning process. Local elected officials are proposing data center moratoriums to slow that momentum — if not stop it in its tracks.

In the first half of October alone, Oakland’s city council unanimously approved a 45-day moratorium on new approvals, making it the first city in Alameda County and the fourth in the Bay Area to adopt such a measure. San Francisco approved a similar moratorium this month, while the Los Angeles County Board of Supervisors postponed a vote to permanently ban large-scale data centers, often called hyperscale facilities, on unincorporated land after receiving an overwhelming volume of public feedback. In Santa Clara, city officials considered a moratorium vote, and are moving forward with new rules to govern data center development, including more stringent water and air pollution regulations. Alhambra residents will vote on a moratorium measure in the November election.

Across California, at least 26 resolutions, moratoriums, or bans on data center development have been passed or proposed since June, according to the D.C.-based non-governmental organization Food & Water Watch, which tracks similar proposals nationwide.

The escalating pushback underscores a widening gap between state-level regulation and municipal action. While Gov. Gavin Newsom last month signed into law seven new measures that focus primarily on disclosure requirements, environmental impact studies, and grid protection, grassroots groups and city councils are moving fast to halt construction entirely.

"I have a hard time remembering something that caught fire the way the opposition to data centers has," said Nicole Ghio, California Director at Food & Water Watch. "Local municipalities have been able to respond quicker to the grassroots wave of opposition of people saying, 'Hold on, let's press pause. Let's actually figure out what we're doing before we commit to this huge change.'"

Opponents say these energy-hungry facilities strain power grids, potentially deplete water supplies and pollute the air, and contribute to broader economic anxieties around AI-driven job elimination. The anti-data-center movement cuts across party lines; conservative group Humans First, for example, finished its nationwide Data Center Revolt tour this month with three stops in California, joining a chorus of figures on the left who call for local control as well as additional environmental and consumer protections.

"This is very much a unifying issue," Ghio noted, adding that residents are alarmed by potential rate hikes and environmental degradation. "This is not a future that I think a lot of people want. I mean, it's a great future if you're a tech billionaire. It's not a great future if you're a regular American."

Industry proponents, however, argue that halting infrastructure development risks eroding critical national interests. Doug Kelly, CEO of the policy advocacy coalition American Edge Project, framed the current buildout as an essential infrastructure race.

"Artificial intelligence and the data centers that power it, this is the next foundational block of infrastructure that America is building out," Kelly said, comparing it to historical investments in railroads and highways.

Kelly acknowledged that past developments lacked sufficient community input, leading to local friction. To address these fears without stopping construction, his organization promotes an "AI Community Compact" — an agreement offering local guarantees to protect ratepayers from cost spikes, safeguard resources, and promise early transparency.

"So, communities can decide whether they want data centers there or not, but they shouldn't just blanket ban them because then you lose all your negotiating power,” Kelly said. “You're literally saying ‘we want this billion-dollar investment to go somewhere else, anywhere but here.’"

Yet for local advocates, piecemeal guarantees and disclosure laws fall short of addressing the underlying risk. Advocates point to a one-year pause on hyperscale data centers that New York’s governor ordered in July as a roadmap, hoping state legislators will eventually follow local leaders' lead.

As cities continue to draft temporary freezes and outright bans, the tension between local community control and global technological dominance remains unresolved. State transparency laws may have opened the books on data center growth, but local opponents are making it clear that seeing the plans isn't the same as approving them.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

Tom Skerritt, the Emmy-winning actor who embodied a solid, wry authority figure, whether as a flight instructor in “Top Gun,” a tough-but-fair sheriff on TV’s “Picket Fences” or the doomed captain of “Alien,” has died. He was 93.

Skerritt died Wednesday of natural causes, his family said in a statement. “While the world knew Tom through his remarkable acting career, we knew him for his humor, curiosity, wisdom, generosity and the love he brought into our lives. He cared deeply about imagination, creativity, storytelling, service, veterans, the natural world and helping others find and share their own voices,” the statement said.

Skerritt was twice nominated for an Emmy — both for “Picket Fences,” winning outstanding lead actor in a drama series in 1993. Other career highlights include playing the patient husband of Shirley MacLaine in “Turning Point,” Sally Field’s husband in “Steel Magnolias” and a scheming opportunist who stands in the way of Jodie Foster’s attempt to communicate with extraterrestrial life in “Contact.”

“A writer once described me as a character actor locked in a leading man’s body, and I’ve always loved that. It’s a nice compliment. I’ve been able to walk the line between television and features,” he told the Seattle Post-Intelligencer in 1997.

Onstage, he was the narrator in “Our Town” at Seattle’s Intiman Theatre in 2004 and made his Broadway debut in 2013 in an adaptation of John Grisham’s “A Time to Kill,” in which The Associated Press wrote he “nicely pulls off a charming disgraced and drunken lawyer.”

Skerritt’s early life

Skerritt grew up in a middle-class Detroit family, his father a small businessman and his mother a housewife. He had two brothers; a sister died as a child.

He spent four years in the Air Force, attended Wayne State University and then switched to the University of California, Los Angeles, to study filmmaking, inspired by a viewing of “Citizen Kane.”

His performance in a Los Angeles theater production of “The Rainmaker” led to his first film role — a supporting role as a sergeant in the 1962 scrappy, $250,000 independent Korean War film “War Hunt.” The movie marked the debuts of Skerritt, Robert Redford, Sydney Pollack and Francis Ford Coppola.

Redford and Skerritt were vying for the same lead role, with the former winning out. Years later, Redford, now directing, paid Skerritt back with compound interest in “A River Runs Through It,” handing him the plum role of the stern Rev. John Maclean, a minister whose governing passions are his faith and fly-fishing. The New York Times was impressed by his “halting, thoughtful manner.”

Redford, who died last year, became a lifelong friend. “There was such a deep connection we made with each other that it matured into a level-headed friendship,” Redford told the Seattle Times in 2007. “His values were close to mine, and he kept his integrity.”

‘Alien’ and ‘Top Gun’

After “War Hunt,” however, Skerritt still struggled for screen time, landing a small role in “M.A.S.H.” and “Thieves Like Us” for Robert Altman, and doing a bit part as a motorcycle cop in “Harold and Maude” for Hal Ashby.

Things changed with “The Turning Point,” which earned him a National Board of Review win. Then came “Alien,” with Skerritt playing the beleaguered and doomed captain of the ship Nostromo, crouched in a dark, claustrophobic duct, hunting the alien with a sputtering flamethrower. He told the Seattle Times that what appealed to him in the script was that the lead actor disappeared and “the woman becomes the hero. I really like that idea.”

Things shifted again after that, including a memorable role as Tom Cruise’s instructor in the landmark “Top Gun”: “Gentlemen, you are the top 1% of all Naval aviators. The elite. The best of the best. We’ll make you better,” he told the students. “This school is about combat. There are no points for second place.”

Skerritt achieved perhaps his best notices as the kindly sheriff in “Picket Fences,” a comedy created by David E. Kelley that won 14 Emmy Awards — one for Skerritt — and a Golden Globe over its four-year run from 1992 to 1996.

Skerritt co-starred opposite Kathy Baker, playing his doctor wife in the community of Rome, Wisconsin, a place with bizarre happenings, like having a robber leaving a trail of frogs or the pope becoming the primary witness to a murder.

“It was written by the best writer on television,” he told the A.V. Club in 2019. “That was the magic and brilliance of it. Because I wasn’t trying to do a series, but then they said Kathy Baker was going to do it, and I thought, ‘She’s fabulous — what do they want me for?’”

Also on the small screen, Skerritt played William Walker on ABC’s “Brothers and Sisters,” Jimmy Ford on TNT’s “Leverage” and he had the recurring character Evan Drake on “Cheers.” He starred in the Hallmark movie “What the Deaf Man Heard,” co-starring Matthew Modine, Judith Ivey and James Earl Jones. He also modeled for Guess jeans.

Directing and writing — his initial dream — had been overtaken by a career in front of the camera, though he managed to direct and star in the 1997 television movie “Divided by Hate.”

“Things happen,” he told The Ottawa Citizen in 1992. “You get hired for a film and the roles kept coming for me. I kept telling myself that if I stuck with acting it would be a really good training for what the problems are in directing. Then the family came along and I had to support them. The years flew by and there was a time when I said I would give up acting and really try to get into directing. But it hasn’t worked out that way and I have no regrets.”

He is survived by his third wife, Julie Tokashiki, and five children.

Before he heads out the door, Gov. Gavin Newsom must decide whether California will join 31 states in a new multibillion-dollar school choice program, funded by private donations, that President Donald Trump included last year in his One Big Beautiful Bill.

Like most Democratic governors, Newsom hasn’t signaled whether he’ll opt in to the law that advocates promise will greatly increase full or partial scholarships to private and religious schools, while potentially paying for auxiliary services in public schools, like tutoring.

The law’s intentionally broad, unrestricted language has made it contentious, with contrasting scenarios for how the Federal Scholarship Tax Credit program, also called the Education Freedom Tax Credit, will play out.

Under the program, an individual taxpayer can donate up to $1,700 annually to a qualifying grant-making organization, up to $3,400 for couples, and then receive a federal tax credit that lowers their taxes by the full amount. The nonprofit “scholarship-granting organizations” then combine individuals’ donations and distribute the money to school districts or to eligible families for private schools.

Advocates say federal tax credits will boost tuition assistance for families in voucher states, while introducing school choice in states like California, which bans using state funding for private and religious schools.

Although it was not their main intent, Republicans included public schools in the law. One nonpartisan analyst, Marguerite Roza, director of the Edunomics Lab at Georgetown University, predicts that public schools will eventually become the biggest beneficiary, once they figure out how to tap into it.

“Given that anyone and everyone can donate without it costing them, it’s like a cost-free donation. We think the average taxpayer is going to lean toward donating to a [grant maker] that serves public schools.”

But opponents argue the program is a tactic to undermine public schools, which are already facing declining enrollments in blue states that have historically opposed voucher-like programs. One critic characterized the program as “a Trojan horse designed to bring the chaos of privatization into Democratic strongholds.”

Others say the program will primarily subsidize existing private school parents, not help low-income families trapped in their neighborhood schools. And the law’s free-market focus, its lack of oversight and failure to require civil rights protections will reinforce inequities and lead to abuse.

“The FSTC will become the largest source of waste, fraud and abuse we’ve seen in education — and most of it will be legal,” wrote Jon Valant, the director of Brown Center on Education Policy at Brookings.

Congress’ hands-off policy

Valant and other critics blame Congress for tying governors’ hands. Under the law, governors cannot add accountability provisions or favor some scholarship-granting organizations, called SGOs, over others, such as those that give to public schools. Once they opt in and submit a list of all SGOs, their job is done.

SGOs must check students’ income eligibility and audit the money, but they’re not required to monitor programs or keep school achievement records.

Thomas Toch, founding director of FutureEd, an independent education policy institute at Georgetown University, said Congress should have learned from the No Child Left Behind Act of 2001. The law provided billions of dollars for parents in low-performing schools to obtain tutoring from contractors who were often unvetted, inexperienced and unmonitored. The Education Department’s inspector general found widespread fraud, falsified records, conflicts of interest and deceptive marketing.

“Sounds familiar,” Toch said.

Governors can’t tell the SGOs which students to serve, but SGOs can determine where to funnel dollars — to a public or private school, an elementary or high school, only to parochial school students or for specific programs. They’ll determine the scholarship amounts and the public school programs they’ll support.

There will be a wide universe of students to serve.

Students in families earning up to 300% of an area’s median income will be eligible — more than $400,000 in some wealthy Californian cities. Some donors may give to SGOs committed to services and scholarships for low-income children, but others may not.

The American Federation for Children, a proponent of the tax credit, projects that 51.7 million children — 90% of the total public and private school students — will be eligible for the benefits.

Based on an analysis of donors to a similar tax credit program in Ohio, Brookings predicts that more tax-credit program money will end up in wealthy communities. “We expect the FSTC to become a regressive funding source, even where those funds go to public school students.”

Lance Christensen, who has drafted school choice proposals as vice president of tax policy and government relations for the conservative California Policy Center, says the Brookings analysis is “shortsighted.” If 100,000 people — not even 1% of California’s 17 million income tax filers — donated $1,700, it would generate $170 million, he said. That amount would rise to $1.7 billion if one million taxpayers — only 6% of the state total — gave the maximum.

“You’re talking about real money that could impact the way that parents legitimately think about their kids’ education,” Christensen said. “We have a lot of kids right now that are stuck in a system that doesn’t work for them and hasn’t worked for them for a long time, and the parents are just really frustrated.”

The Treasury Department and the IRS estimate that, by 2030, more than 11 million taxpayers will contribute $26 billion for scholarships and other grants.

Two visions for California donations

So far, New York Gov. Kathy Hochul and Colorado Gov. Jared Polis are the only Democratic governors among the 31 participating states to opt in. (Virginia joined before Democratic Gov. Abigail Spanberger took office.) This year’s opt-in deadline is Jan. 1.

Two Californians who hope for different reasons that Newsom will sign on are Rachel Elginsmith and Evan Marwell.

Elginsmith is chief executive of the BASIC Fund in Oakland, the state’s largest nonsectarian SGO. Since its founding in 1998, it has distributed $200 million in partial scholarships for 30,000 students, from preschool to eighth grade attending 266 Catholic and nonreligious schools in the Bay Area.

The BASIC Fund would be well positioned to capitalize on the tax-credit by expanding its base of donors. “It would be more money, more kids, bigger scholarships — more of what we’re doing. It would be exciting,” she said.

Marwell, a San Francisco nonprofit entrepreneur, founded EducationSuperHighway, which helped districts plan and fund high-speed internet during the pandemic, and then co-founded Ignite Reading, an online tutoring for the early grades. His new mission: rechartering the EducationSuperHighway into a national SGO that will compete for taxpayers who want to choose first grade tutoring in reading for their tax credit donation.

Marwell said he has reached out to 45 governors, and expects that Democratic states will opt in. They will see the success of Colorado and New York, he said, and “they will start to hear from voters, ‘Why the heck are you not allowing our kids to get these scholarships that we’re contributing to?’ ” 

Newsom’s dilemma

Newsom will get grief whether he opts in or out. The National Education Association and teachers unions in California will thrash him if he signs on. “Taxpayer dollars should go to public schools open to all students, not private schools that can pick and choose their students,” the NEA said in a press release.

If he doesn’t opt in, he’ll be criticized for denying low-income families money to close the achievement gap, while forcing California taxpayers to give to out-of-state SGOs. As New York Gov. Hochul said in her Oct. 9 announcement, “I’m not going to leave money on the table when it could help our kids.”

There is a third option — do nothing, citing fatal flaws in the tax credit program’s design. That’s the advice of Rachel Cantor, director of education policy at the Progressive Policy Institute.

“If I was advising a Democratic governor, I would say, ‘No, don’t opt in. Expand public school choice in your state so that people do have choices. But this is a risky way to do it if your goal is to improve educational quality and open opportunity for people who don’t have it.’ ”

What we know about Trump’s Federal Scholarship Tax Credit program

Gov. Gavin Newsom must decide whether California will join 31 other states in participating in President Donald Trump’s school choice program. Here is how the program works: 

• Governors must opt in by Jan. 1 annually to participate in the program.
• Federal income tax filers, whether living in a participating state or not, can receive a tax credit of up to $1,700 ($3,400 for couples) by donating to a state-approved Scholarship Granting Organization (SGO).
• Governors cannot determine which organizations can serve as SGOs, beyond requiring 501(c) (3) nonprofit status and compliance with state nonprofit laws.
• SGOs certify scholarship recipients; the family income of recipients must be below 300% of the median income in the counties they live in (more than $400,000 in wealthy counties).
• SGOs determine the size of scholarships and grants and where the money they collect can be spent; they must spend 90% of the money they collect on scholarships and grants.
• The FSTC law does not require academic reporting and accountability requirements of private schools receiving program funds.
• Private school scholarships can cover tuition, fees, uniforms, books, technology, transportation and certain room-and-board costs.
• Grants for public school recipients can cover tutoring, extended-day and summer programs, college credit or Advanced Placement courses and potentially services and other expenses not covered by students with disabilities’ individualized education programs.

Timeline for the Federal Scholarship Tax Credit

July 4, 2025: President Trump signs the One Big Beautiful Bill that includes the  Education Freedom Tax Credit, also known as the Federal Scholarship Tax Credit.

Oct. 1, 2026: U.S. Treasury Departmentreleases draft regulations for the Federal Scholarship Tax Credit (FSTC) program; 60-day public comment period begins.

Dec. 15, 2026: The Treasury Department will host a public hearing at the IRS building in Washington, D.C.

Dec. 31, 2026: Deadline for states to submit their participation in the FSTC.

Jan. 1, 2027: Individual taxpayers can begin donating contributions to eligible SGOs.

Feb. 15, 2027: Deadline for states to submit their list of eligible scholarship-granting organizations to the IRS.

A federal judge on Thursday ordered President Donald Trump to sit for a deposition in his $10 billion defamation lawsuit against the BBC by Dec. 11.

The order from U.S. Magistrate Judge Enjoliqué Lett came as lawyers for the British broadcaster complained that Trump had delayed his appearance. Charles Tobin, attorney for the BBC, said that with two months left in the discovery period, “we still haven’t been able to depose the plaintiff.”

He noted there was an agreed-upon date of Oct. 16, but that Trump had canceled it for a “matter of national importance.” Tobin said the Republican president was in fact campaigning in Georgia that day. “He was participating in party politics and prioritized that over sitting for the deposition,” Tobin said.

Lett said Trump must sit for a deposition by Dec. 11, or face sanctions up to dismissal of his lawsuit -– unless the discovery period was extended past Dec. 18.

Discovery, where lawyers for both sides exchange documents and other evidence, is scheduled to end Dec. 18, and the BBC’s attorneys want to make sure they have Trump’s deposition before that deadline. Lett said only the presiding judge assigned to the case can alter the trial schedule, and the defense said it would be open to scheduling the deposition at a later time if the trial schedule was also moved back.

Trump, who has often avoided depositions, filed his lawsuit against the BBC last December. He accused the publicly funded broadcaster of defamation as well as deceptive and unfair trade practices related to a documentary, “Trump: A Second Chance.”

The BBC acknowledged that filmmakers spliced together quotes from different sections of the speech Trump delivered to his supporters on Jan. 6, 2021, before the storming of the U.S. Capitol, to make it seem he was directly urging violence. The broadcaster apologized over the editing, and the head of the BBC and its top news executive both resigned. But the BBC has denied Trump’s claims that it defamed him.

Trump’s lawyers say Jack Smith lacks ‘personal knowledge’ of issues in the case

To bolster its defense, the broadcaster subpoenaed former special counsel Jack Smith earlier this month. Trump’s lawyers argued, in a joint filing asking for a hearing on the matter, that there was no good reason for Smith, who is not a party to the case, to appear.

Tobin, the BBC lawyer, told the judge Thursday that Smith has not objected to being deposed for this case, meaning the only objection is coming from Trump. Tobin said the BBC is not trying to relitigate the events of Jan. 6, but that Smith is one of the leading experts in what happened that day, and his deposition could lead the BBC to evidence that could help their case.

“We can argue later on whether his testimony is admissible,” Tobin said, “but we are entitled to that deposition.”

Trump’s lawyer, Alejandro Brito, said Smith has no personal knowledge of Trump’s Jan. 6 speech or Trump’s state of mind when he gave it. All of Smith’s knowledge about the case is secondhand, Brito argued, and the special counsel’s report, along with Smith’s testimony before Congress, is all public and available to the BBC’s attorneys, he said.

There was no immediate ruling with the hearing expected to resume in the afternoon after a lunch break.

Judge says the BBC can see membership records for Mar-a-Lago

Turning to the damages issue, the judge agreed that the BBC should be allowed to see records for the total number of applications for membership at Trump’s Mar-a-Lago resort in Florida from Jan. 6, 2020, through Jan. 6, 2026, as well as the total cost of membership and initiation fees for new applicants.

Tobin said one aspect of any defamation case is showing actual damages, and the popularity of Mar-a-Lago is a significant indicator of Trump’s reputation. The BBC’s lawyer described the private club as “a place where he exhibits his reputation in front of people who are important to him.”

Brito argued that Trump does not actually run Mar-a-Lago, and that his reputation is not associated with the club.