• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia
PoliticsCalifornia

Gavin Newsom tackles a $68 billion deficit for the world’s fifth largest economy, the AI explosion and the Hollywood implosion

By
Trân Nguyễn
Trân Nguyễn
,
Adam Beam
Adam Beam
, and
The Associated Press
The Associated Press
Down Arrow Button Icon
By
Trân Nguyễn
Trân Nguyễn
,
Adam Beam
Adam Beam
, and
The Associated Press
The Associated Press
Down Arrow Button Icon
January 3, 2024, 11:39 AM ET
Gavin Newsom
California Gov. Gavin Newsom is facing a $68 billion budget deficit.Mario Tama/Getty Images

California lawmakers return to work on Wednesday for the start of an election-year legislative session dominated by decisions on artificial intelligence and the state’s struggling budget.

The budget is a big issue every year in California, which is the nation’s most populous state and has an economy larger than that of all but four countries. But this year, lawmakers and Democratic Gov. Gavin Newsom will have to figure out how to cover an estimated $68 billion deficit — a shortfall that is larger than the entire operating budgets of many states.

And with California companies at the forefront of the artificial intelligence boom, a number of state lawmakers are eyeing new rules to govern the use of the technology before it can dominate daily life — much like social media has.

The California Legislature is scheduled to convene Wednesday afternoon, giving lawmakers a week to settle in before Newsom sends over his first budget plan. Cutting the budget is never easy, but it’s especially difficult in an election year when many legislators must then ask voters in November to reelect them.

Plus, lawmakers will be following a pair of new leaders as they navigate their first budget negotiations, an arduous process that happens mostly behind closed doors and requires gaining consensus among the Democrats who control a majority of seats in the Legislature. Assembly Speaker Robert Rivas took over last summer, and incoming Senate President Pro Tempore Mike McGuire is scheduled to take over next month.

They will also guide debates on the use of generative artificial intelligence tools and attempts to rein in the fast-growing industry.

Multiple lawmakers are preparing a host of bills to regulate the use of generative artificial intelligence tools — bills aimed at the potential impacts on privacy, discrimination, job protections and misinformation during an election year.

Assemblymember Rebecca Bauer-Kahan has said she will introduce a bill to prohibit the use of AI systems that discriminate against people, which would have required companies to evaluate the algorithms they develop and disclose any potential discriminatory risks. She introduced a similar bill last year but couldn’t advance it.

Assemblymember Ash Kalra wants to protect actors and artists by limiting studios’ ability to replicate performers’ work using AI, a sticking point in contract negotiations last year between actors and studios. The bill would allow performers to escape vague language in contracts that allow companies to use AI to create a digital version of themselves.

State Sen. Scott Wiener said he will try to establish a sweeping industry-wide safety framework. The San Francisco Democrat aims to focus on tackling some of the biggest risks in public safety and security, such as AI-generated bioweapons, cyberattacks and misinformation campaigns. The bill, still light in details, will be “among the first attempts at broad regulation of AI,” Wiener said.

Beyond the budget and artificial intelligence, lawmakers are also expected to fight over rules governing their own elections.

Republican Assemblymember Vince Fong is running to replace former U.S. House Speaker Kevin McCarthy in Congress. But he’s also on the ballot for reelection to his Fresno Assembly seat, creating a legal kerfuffle that has angered Democrats. Fong decided to run for Congress after he had already filed for the Assembly seat.

California Secretary of State Shirley Weber at first refused to put Fong on the ballot for the Congressional seat, citing a state law that does not allow people to appear on the ballot twice. But Fong sued and a state judge ruled in his favor. Weber has said she will appeal the ruling. Assemblymember Wendy Carrillo — who is not running for reelection because she is seeking a seat on the Los Angeles City Council — has vowed to introduce legislation she says “will clear up this mess.”

“Under no circumstances should candidates be able to run for two offices at the same time,” she said.

The legislative session runs through the end of August, but lawmakers only have until the end of January to decide which of the bills introduced last year, if any, they will attempt to pass this year.

Among the leftover bills is a proposal by Democratic Senators Catherine Blakespear and Nancy Skinner to require gun owners to carry liability insurance to cover the negligent or accidental use of their firearms. The bill, introduced in 2022, faced fierce opposition from firearms groups last year who said such requirements violate gun owners’ constitutional rights.

Other bills include a proposal to require community colleges and California State University campuses to establish a mental health hotline, a measure to subsidize housing for seniors and adults with disabilities, and a plan to ban homeless encampments within 1,000 feet (305 meters) of a school, park, or library, among others.

Join us at the Fortune Workplace Innovation Summit May 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.
About the Authors
By Trân Nguyễn
See full bioRight Arrow Button Icon
By Adam Beam
See full bioRight Arrow Button Icon
By The Associated Press
See full bioRight Arrow Button Icon

Latest in Politics

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • Future 50
  • World’s Most Admired Companies
  • See All Rankings
Sections
  • Finance
  • Leadership
  • Success
  • Tech
  • Asia
  • Europe
  • Environment
  • Fortune Crypto
  • Health
  • Retail
  • Lifestyle
  • Politics
  • Newsletters
  • Magazine
  • Features
  • Commentary
  • Mpw
  • CEO Initiative
  • Conferences
  • Personal Finance
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
About Us
  • About Us
  • Editorial Calendar
  • Press Center
  • Work At Fortune
  • Diversity And Inclusion
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Politics

A memorial for Nancy Guthrie
PoliticsCrime
Savannah Guthrie pleads ‘we will pay’ as search for her missing mother continues after a week
By Ty O'Neil and The Associated PressFebruary 9, 2026
7 hours ago
CryptoDonald Trump
The Trump family’s crypto portfolio is getting battered with the rest of the industry—but Melania’s memecoin has fared surprisingly well
By Ben WeissFebruary 9, 2026
8 hours ago
Starmer speaks in front of a red background
PoliticsUK
‘Every fight I have ever been in, I’ve won’: British PM Starmer vows to fight for his job after Epstein links sack cabinet
By Jill Lawless and The Associated PressFebruary 9, 2026
8 hours ago
RetailFortune 500
The man who fixed Walmart’s grocery business was just appointed CEO of Kroger
By Phil WahbaFebruary 9, 2026
9 hours ago
journalists
CommentaryMedia
I’m a war gamer for the Navy and I know why you don’t trust the media anymore. It’s fighting yesterday’s battles
By Charles Edward Gehrke and The ConversationFebruary 9, 2026
10 hours ago
Phot of Donald Trump
Economyaffordability
Top analyst: Trump’s economy marked by ‘soggy consumption, weak job gains and a sour public mood’
By Nick LichtenbergFebruary 9, 2026
13 hours ago

Most Popular

placeholder alt text
C-Suite
Meet Jody Allen, the billionaire owner of the Seattle Seahawks, who plans to sell the team and donate the proceeds to charity
By Jake AngeloFebruary 9, 2026
10 hours ago
placeholder alt text
AI
As billionaires bail, Mark Zuckerberg doubles down on California with $50 million donation
By Sydney LakeFebruary 9, 2026
12 hours ago
placeholder alt text
Economy
China might be beginning to back away from U.S. debt as investors get nervous about overexposure to American assets
By Eleanor PringleFebruary 9, 2026
17 hours ago
placeholder alt text
Economy
Elon Musk warns the U.S. is '1,000% going to go bankrupt' unless AI and robotics save the economy from crushing debt
By Jason MaFebruary 7, 2026
2 days ago
placeholder alt text
Commentary
America marks its 250th birthday with a fading dream—the first time that younger generations will make less than their parents
By Mark Robert Rank and The ConversationFebruary 8, 2026
2 days ago
placeholder alt text
Economy
Russian officials are warning Putin that a financial crisis could arrive this summer, report says, while his war on Ukraine becomes too big to fail
By Jason MaFebruary 8, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.