The Brief

Bolstered by the rosiest fiscal picture of his second term, Gov. Gavin Newsom on Monday announced a plan to balance the state budget without any spending cuts — prioritizing existing programs and future savings over any ambitious new investments.

As he unveiled his $322.2 billion spending plan for the 2025–26 budget year, Newsom called on the Legislature to approve modest new investments in economic development and funding potential court battles with the incoming Trump administration, along with reforms to allow California to save more money for future budget downturns.

“It’s about more transparency, it’s about reform and it’s about being prepared for uncertainties into the future,” Newsom said of the budget plan.

Officially, the administration is projecting a slight surplus in the spending plan, although the governor did not specify the surplus amount. In November, the Legislative Analyst’s Office had projected a $2 billion shortfall, which it described as leaving the budget “roughly balanced.”

The projected surplus, fueled by higher-than-expected tax revenue, represents a likely turnaround from the budget shortfalls of the last two years, including the $27.6 billion deficit that was closed in the last state budget passed in June.

Speaking at an event in Turlock, Newsom departed from past practice by sharing only highlights from his budget plan, leaving the full release of the spending plan until Friday. The January proposal signals the beginning of the annual state budget process at the Capitol. Newsom will release a revised proposal in May after most Californians file their taxes, and the budget will cover July 2025 through June 2026.

The governor’s most significant new policy announcement was a proposal to allow the state to stash more money in its rainy day fund. Currently, the reserve is capped at 10% of the state’s expected tax revenue — a limit Newsom wants to double. He also proposed exempting the rainy day savings from the state’s limit on spending. Both changes would need approval from California voters.

“We need to create the right political conditions to advance it,” Newsom said. “That’s going to take a Herculean effort, but we’ve been talking about it for long enough — it’s time to move forward.”

Newsom described the moves as a way to temper California’s notorious budget volatility. The state’s progressive tax system relies heavily on revenue from a small share of high-earners, whose incomes and tax liability can fluctuate with the stock market.

Last year’s stock market surge, driven by California-based chip maker Nvidia, has led to income and capital gains tax revenue exceeding the expectations of state budget officials.

However, the current fiscal picture is still a far cry from the record surpluses Newsom enjoyed in the years immediately after the pandemic. Newsom signaled his administration will focus on implementing existing initiatives, such as transitional kindergarten for all 4-year-olds in the state, along with efforts to improve government efficiency.

New spending initiatives announced so far are modest: a $100 million economic plan centered on programs to support workers without a college degree in the job market and a $25 million set-aside for anticipated legal costs as the state gears up to challenge the Trump administration in court.

Newsom proposed the litigation funding as part of a special legislative session focused on the incoming administration, and the governor said Monday he remains confident the funds will be approved prior to President-elect Donald Trump’s inauguration on Jan. 20.

“We’re also walking into headwinds,” Newsom said of the incoming administration, describing a “radically different moment in U.S. history — world history, arguably — and as a consequence, we need to be prepared.”

The Santa Ana City Council approved a $75,000 agreement with the digital service Hoopla to offer for digital lending for movies, music, audiobooks and E-books services through its library department.

The deal comes as digital equity programming becomes more at-risk of losing funding. The federal government pulled back $2.75 billion in funding by slashing the Digital Equity Act. Last October, the Federal Communications Commission also ended e-rate discounts to libraries and schools for digital lending programs, which included hotspots and school bus Wi-Fi.

The city first purchased Hoopla services in 2022. Brian Sternberg, Santa Ana’s library services director, told LAist the service has become increasingly popular with residents. Over the last year, Hoopla usage has been up 109%, with 4,435 people borrowing 24,340 items, according to Sternberg.

“The great people of Santa Ana deserve the same services, programs and collections that would be afforded anywhere else in the county,” Sternberg said. “That's my goal, to find ways to deliver that to our residents.”

What is Hoopla? 

Hoopla offers a variety of popular content like movies, television shows, music, audiobooks and e-books.

“Netflix, Amazon Prime, HBO, Max … the way those models are set up, there's not a good way for public libraries to purchase that content due to cost and just due to the way those content deliverers are structured,” Sternberg said.

Digital equity programming can extend beyond educational material, he added.

“There are kids, and they want to see Spider-Man,” Sternberg said. “And we want to be able to offer that, especially for our residents who might not have all the financial means to sign up for all these 10 different subscriptions. They're all like, $15, $20 a month.”

Hoopla provides content in English and Spanish, and there’s content for all age groups, Sternberg added.

The company uses a “pay-in-advance” model, which means the library is buying digital “credits” that are then used whenever a borrower checks out an audiobook, E-book or other content.

“They have different scales,” Sternberg said. “If you want the newest popular movies, it's this particular price point.”

How else is Santa Ana addressing digital inequities? 

Sterberg said Santa Ana libraries are still lending out Wi-Fi hotspots for three weeks.

The library also carries its “Library of Things” where residents can borrow baking tools, video games, musical instruments, cameras and more.

The Main Library and Newhope Library are still closed for major renovations but are expected to reopen by the end of this year. Residents can still visit the library at the Delhi Center and the outdoor library at Jerome Park.

Santa Ana became the latest city in Orange County to approve the use of drones as first responders after a heated debate.

Santa Ana Police Chief Robert Rodriguez told the council the drones will help the department improve response times.

“It will reduce the air support costs associated with the Orange County Sheriff's Department helicopter contract. That contract currently right now sits about approximately half a million dollars a year,” he said. “It will provide responding officers with valuable information before they arrive on scene, which enhances community and officer safety.”

But some on the City Council and in the audience expressed concerns with the vendor, Axon Enterprise Inc., which contracts with the Department of Homeland Security. As Orange County’s only sanctuary city, Santa Ana has grappled with a deep mistrust in the police department as the federal government ramped up immigration raids and ICE detentions last summer. As immigrant families already contend with a fear of coming outside, the increased surveillance, they said, would make them even more afraid.

Ultimately, the council voted 4-3 to allow the city manager to enter into an agreement with Axon Enterprise for a three-year period, joining cities like Newport Beach, Irvine and Huntington Beach who all have drone programs.

Details of the program

The drones will cost the city around $700,000, which will come from a state grant.

All data collected from the drones will be the property of the city and will only be released in accordance with state and city laws. The drones will also be the latest in surveillance technology purchased by the Police Department after they approved the purchase of 57 license plate readers last year.

How will the drones be deployed

The three first responder drones will be docked across the city at fire stations. When the Police Department receives an emergency call, the drones will be deployed within minutes, arriving before first responders. The live video stream, the Police Department says, will allow officers “to coordinate their actions more effectively and gather information in direct support of the Department’s de-escalation strategy.”

In addition to the first responder drones, the city will also purchase two patrol drones to use indoors and in tight spaces “to identify potential dangers.”

Last year, Santa Ana Police Commander Mat Sorenson said the department was looking to add drones to their repertoire as a “reactionary tool,” not for surveillance.

“ I'm not gonna make any promises here right now, but we are more than likely not going down the facial recognition route," he said. "For all intents and purposes, our drones will be a flying body, you know, use it deployed on actual calls for service where somebody's called the police. We're not randomly gonna be using it to surveil people or just fly around looking for crime.”

Community concerns

Carlos Perea, who sits on the Police Oversight Commission, and Tanya Navarro, organizing director with Chispa OC, both expressed concerns with the drone program.

“The vendor selected for this agreement, Axon Enterprise, profits from surveillance and policing infrastructure that is deeply entangled with systems of immigration enforcement and detention. Axon and its subsidiaries maintain contracts with ICE and other federal enforcement agencies at a time when immigrant communities across the country are experiencing unprecedented levels of surveillance, raids, and violence,” Perea wrote in an email to the City Council.

Navarro called the drone program “reckless” for public safety and fiscally.

The language in the policy, she said, “gives police broad latitude to decide when and where drones fly, including over protest, public gathering, and community events. This is exactly how tools get justified for emergencies and then become normalized in everyday surveillance.”

A growing number of Los Angeles-area politicians are calling on Olympics chief Casey Wasserman to step down after recently released files included a series of flirty emails between him and convicted sex trafficker Ghislaine Maxwell from 2003.

The emails were released in the Justice Department's latest drop of the files related to the criminal investigation into sex offender Jeffrey Epstein.

"Casey Wasserman should step aside immediately," L.A. City Councilmember Hugo Soto-Martinez said in a statement. "Anything less is a distraction and undermines efforts to make sure the Games truly reflect the values of a city that is for everyone."

Councilmembers Eunisses Hernandez, Imelda Padilla, Nithya Raman and Monica Rodriguez, along with L.A. County Supervisors Janice Hahn and Lindsey Horvath, and City Controller Kenneth Mejia also called on Wasserman to step aside.

"Los Angeles cannot trust our financial future to someone connected with Jeffrey Epstein and Ghislaine Maxwell," Mejia said on social media, citing the city of L.A.'s role as financial backer of the Olympic Games.

The emails include an exchange in which Wasserman writes to Maxwell, "I think of you all the time…So what do I have to do to see you in a tight leather outfit?"

In another, Wasserman explains the concept of "June gloom" to Maxwell, who responds, "What foggy enough so that you can float naked down the beach and no one can see you unless they are close up?"

In 2022, Maxwell was sentenced to 20 years in prison for facilitating a sex trafficking ring of minor girls with Epstein.

LA28 did not immediately respond to requests for comment. But in a statement provided to other media outlets over the weekend, Wasserman said he was "terribly sorry" for his association with Epstein and Maxwell.

"I deeply regret my correspondence with Ghislaine Maxwell which took place over two decades ago, long before her horrific crimes came to light,” Wasserman said in the statement, which was shared by The Athletic and other news outlets. “I never had a personal or business relationship with Jeffrey Epstein. As is well documented, I went on a humanitarian trip as part of a delegation with the Clinton Foundation in 2002 on the Epstein plane. I am terribly sorry for having any association with either of them.”

Councilmember Monica Rodriguez also referenced LA28's "Human Rights Strategy," which was due at the end of last year but hasn't yet been made public.

"The failure to complete a robust Human Rights plan, coupled with the revelations from the newly released Epstein files, makes clear that no one associated with Epstein and his associates can provide credible leadership in the planning of these games, which now includes Casey Wasserman," Rodriguez said in a statement.

L.A. Mayor Karen Bass has not called on Wasserman to resign. In a statement to LAist, Bass said that it was critical to be "100% focused on making our city shine."

"Ultimately, any decision on the LA28 leadership must be made by the LA28 Board. As you know, they are a separate and independent nonprofit organization," the mayor said.