Politics
Legal weed clashes with child care. Why a cannabis tax cut could spell trouble for children
A fight over taxes consumers pay for cannabis products has prompted a standoff between unusual adversaries: child-care advocates and the legal weed industry.
On July 1, California’s cannabis excise tax increased from 15% to 19% as part of a political deal struck in 2022 to help stabilize the fledgling legal market. But the industry now says the increase is untenable as it faces a sharp decline in revenue and unfair competition from the growing illicit market.
An industry-sponsored bill moving through the Legislature — and already passed by the Assembly — would eliminate the tax increase and lower the rate back to 15% for the next six years. This would reduce by $180 million annually the tax revenue that the state contributes toward law enforcement, child care, services for at-risk youth and environmental cleanup.
The losses include about $81 million annually that would have specifically funded additional subsidized child-care slots for about 8,000 children from low-income families.
“They are choosing the cannabis industry over children and youth,” said Mary Ignatius, executive director of Parent Voices California, which represents parents receiving state subsidies to help pay for child care.
Child care faces setbacks
The tension over taxes for legal weed versus child care — both industries in crisis — highlights the inherent pitfalls of funding important social services with “sin taxes,” whether it’s alcohol, weed or tobacco — funding that experts say is often unstable and unsustainable.
Engage with our community-funded journalism as we delve into child care, transitional kindergarten, health and other issues affecting children from birth through age 5.
The measure’s next stop is the Senate. All bills in the Legislature must be passed by Sept. 12, and the governor must sign them by Oct. 12.
“We can both support the legal cannabis industry and protect child care. If the measure reaches the governor’s desk and is signed into law, we will work with the Legislature to ensure there are no cuts to child care due to this policy change,” said Diana Crofts-Pelayo, a spokesperson for Gov. Gavin Newsom.
But it’s unclear where money to backfill the losses would come from, as the state grapples with declining finances and federal funding cuts.
The money from cannabis taxes represents a fraction of California’s $7-billion annual child care budget. But as federal cuts to social services for low-income families, including Head Start, continue, any potential loss creates a sense of panic among child care advocates who say California ought to be shoring up revenue options right now — not reducing them.
“Every single dollar needs to remain in the programs that are serving our children and families. What may seem like a small amount to some is everything for advocates who are fighting for it,” said Ignatius.
The past decade has been a time of progress for child care advocates, as the state rebuilt a child care industry decimated by cuts during the Great Recession. California has more than doubled spending on child care since the recession low, added about 150,000 new subsidized child care slots, eliminated the fees paid by families, increased pay for child care workers and added a new public school grade level for 4-year-olds.
But despite these efforts to bolster the market, California’s child care industry still suffers from low pay for workers, unaffordable costs for families, and a shortage of spaces for infants and toddlers.
The waiting list for subsidized child care slots is still so long that some parents have taken to calling it the “no hope list,” said Ignatius. Those who join the list know they could wait years before a spot opens up, and by that time their child may already be in kindergarten or beyond.
Jim Keddy, who serves on an advisory committee to help determine what programs the tax will finance, opposes the proposed reduction.
“If you don’t work to promote and hold on to a funding stream for children, someone eventually takes it from you,” said Keddy, who is also executive director of Youth Forward, a youth advocacy organization.
The cannabis industry, however, argues that while the causes the tax supports may be worthwhile, market conditions are so abysmal that it cannot weather an increase.
Legal cannabis industry struggles to remain afloat
“It is sad that the cannabis industry is being pit against social programs, childhood programs and educational programs,” said Jerred Kiloh, president of United Cannabis Business Assn. and owner of the Higher Path dispensary in Sherman Oaks. “The reality is, if our legal industry keeps declining, then so does their tax revenue.”
In 2022, when the cannabis industry agreed to increase the excise tax, quarterly cannabis sales were at their peak. The agreement offered the new industry temporary relief by eliminating the cultivation tax passed by voters under Proposition 64, the 2016 initiative that legalized cannabis. In exchange, state regulators would be able to increase the excise tax after three years to make the change revenue neutral.
But since then, sales have plunged to their lowest levels in five years, due in part to the growing illicit market that is siphoning off sales from legal dispensaries.
In L.A., Kiloh said that between state and local taxes, his legal dispensary customers end up paying 47% in taxes on their purchase. But if they shopped instead at any of the thousands of stores in L.A. selling cannabis products without a license, they could avoid state and local cannabis taxes entirely.
“A 30% increase in an excise tax that is already egregious is just kind of the breaking point for a lot of consumers,” said Kiloh.
Even before the excise tax hike went into effect, just 40% of the cannabis consumed in California was obtained from the legal market, according to the California Department of Cannabis Control.
The measure to drop the excise tax, AB564, received widespread support from Assembly members, including stalwart supporters of early childhood education like Assembly Majority Leader Cecilia Aguiar-Curry (D-Winters), chair of the Legislative Women’s Caucus.
“Revenues from legal sales of cannabis are already dropping and if we keep raising the tax they’ll drop even more. That penalizes cannabis businesses who are doing the right thing and working within the legal market. And, it makes illegal sales from cartels and criminals more competitive,” she said in a statement. “We need to fund our kids’ education through the State General Fund, but if we want to supplement education and youth programs, cannabis tax dollars will only exist if we steady the legal market and go after those illegal operators.”
How reliable are sin taxes?
Lucy Dadayan, a researcher who studies sin taxes at the Tax Policy Center, a nonpartisan think tank based in Washington, D.C., said the California predicament reflects a larger problem with sin taxes.
If a sin tax is successful and consumption drops — as it has with tobacco — “the tax base shrinks. And in the case of cannabis, there’s the added wrinkle that a high tax rate can push consumers back into the illicit market, which also reduces revenue,” she said.
This is not the first time services for the state’s youngest children have been affected by reductions in a sin tax.
In 1998, California voters slapped cigarettes with a hefty surcharge to pressure smokers to give up their habit. The state used the money to fund “First 5” organizations in every county, which are dedicated to improving the health and well-being of young children and their families. But the less people smoked over time, the less money was available for early childhood programs, and the First 5 system now finds itself confronting an existential crisis as it faces a rapidly declining revenue source.
Meanwhile, the critical social services like child care that come to depend on sin taxes tend to get more and more expensive, creating a “mismatch” in the tax structure versus the need, said Dadayan.
“In the short term, these taxes can raise a lot of money and help build public support for legalization or regulation. But in the long term, they can leave important programs vulnerable because of shifting consumption patterns,” she said.
This article is part of The Times’ early childhood education initiative, focusing on the learning and development of California children from birth to age 5. For more information about the initiative and its philanthropic funders, go to latimes.com/earlyed.
Politics
Comer summons Minnesota officials as House probes massive social services fraud
NEWYou can now listen to Fox News articles!
FIRST ON FOX: The House Oversight Committee is widening its probe into allegations of widespread fraud within Minnesota’s social services programs, which prosecutors suggested could be worth billions of dollars.
Oversight Committee Chairman James Comer, R-Ky., sent letters to seven current and former Minnesota state officials on Monday morning, inviting them for transcribed interviews with his panel.
Comer sent two additional letters to Attorney General Pam Bondi and Treasury Secretary Scott Bessent, seeking the federal government’s cooperation in the probe and requesting briefings for committee staff by Jan. 9.
LABOR SECRETARY ANNOUNCES ‘STRIKE TEAM’ GOING TO MINNESOTA TO INVESTIGATE RAMPANT FRAUD
House Oversight Committee Chairman James Comer, R-Ky., speaks at a press conference at the U.S. Capitol on Oct. 21, 2025, in Washington, D.C. (Tasos Katopodis/Getty Images)
“The Committee on Oversight and Government Reform is investigating reports of widespread fraud in Minnesota’s social services programs. As the Director of Nutrition Program Services and in your previous roles as the Assistant Director of Nutrition Program Services and Supervisor of Business Operations and Support Services for the Minnesota Department of Education, you have information that will assist the Committee’s investigation,” read one such letter, sent to Emily Honer, the director of Nutrition Program Services at the Minnesota Department of Education.
“Accordingly, we request your testimony at an in-person transcribed interview on January 26, 2026. If you do not voluntarily appear for the interview, we will be forced to evaluate the use of the compulsory process.”
Another current official, Minnesota Department of Education Assistant Commissioner Daron Korte, was asked to appear on Jan. 28.
Similar letters were sent to the following former officials with requests to appear on dates ranging from late January through early February: former Minnesota Department of Human Services Commissioner Jodi Harpstead, former Minnesota Department of Education Commissioner Mary Cathryn Ricker, former Minnesota Department of Human Services Chief Financial Officer David Greeman, former Minnesota Department of Human Services Commissioner Tony Lourey, and Eric Grumdahl, the department’s former Assistant Commissioner of Homelessness & Housing Supports.
ILHAN OMAR DEFENDS MEALS ACT DESPITE TIES TO MASSIVE MINNESOTA FRAUD SCHEME
“Whistleblowers have made it clear that American taxpayers were defrauded in Minnesota, raising serious questions about whether Governor Walz and Attorney General Ellison failed to act or were complicit in the theft,” Comer told Fox News Digital. “Today, the Committee is requesting information from the Treasury Department and the Department of Justice, as well as transcribed interviews with Minnesota state officials.”
Federal prosecutors in Minnesota have charged multiple people with stealing more than $240 million from the Federal Child Nutrition Program through the Minnesota-based nonprofit Feeding Our Future.
The probe has since widened to multiple state-run programs being investigated for potential fraud.
Minnesota Gov. Tim Walz speaks at a town hall meeting at the DeYor Performing Arts Center on April 7, 2025, in Youngstown, Ohio. (Jeff Swensen/Getty Images)
Officials investigating are now questioning whether people at the very top of Minnesota’s government were aware of signs of fraud but did not act in any way to stop it.
Gov. Tim Walz, who is running for a third term, took accountability in remarks to reporters on Friday: “This is on my watch. I am accountable for this. And more importantly, I am the one that will fix it.”
He heaped doubt on federal prosecutors’ accusations that the fraud could have totaled in the billions, however.
AGRICULTURE SECRETARY DEMANDS MINNESOTA FIX SNAP BENEFITS FOR 4 COUNTIES IMMEDIATELY UNDER PILOT PROGRAM
“You should be equally outraged about $1 or whatever that number is, but they’re using that number, without the proof behind it,” Walz said. “But to extrapolate what that number is for sensationalism, or to make statements about it, it doesn’t really help us.”
Walz also said he was “partners” with the federal government in stopping the fraud, and said he stopped payments to programs suspected of fraud in July after being granted the ability to do so.
U.S. prosecutors held a press conference on Thursday announcing the fraud probe was widening to focus on 14 programs aimed at disbursing Medicaid funds.
Attorney Joseph H. Thompson said those programs have cost roughly $18 billion since 2018, of which he said a “significant amount” likely fell prey to fraud.
CLICK HERE TO DOWNLOAD THE FOX NEWS APP
“It is staggering, industrial-scale fraud,” he said during the press conference.
Thompson said some of those dollars have been traced to real estate investments in Nairobi, Kenya.
He also said “some money went to Somalia indirectly” and “might have gotten into the hands” of militant group Al-Shabaab, but stated there was “no indication that the defendants that we’ve charged were radicalized or seeking to fund Al-Shabaab or other terrorist groups.”
Fox News Digital reached out to Walz’s office, as well as the offices of Minnesota Attorney General Keith Ellison, the Department of Human Services, and the Department of Education for comment.
Politics
CBS News correspondent accuses Bari Weiss of ‘political’ move in pulling ‘60 Minutes’ piece
A “60 Minutes” story on the Trump administration’s imprisonment of hundreds of deported Venezuelan migrants to El Salvador was pulled by CBS News Editor-In-Chief Bari Weiss shortly before it was scheduled to air Sunday night.
The unusual decision drew a sharp rebuke from Sharyn Alfonsi, the correspondent for the piece.
Alfonsi said the decision was motivated by politics, according to an email she circulated to colleagues and viewed by the Times. Alfonsi noted that the story was ready for air after being vetted by the network’s attorneys and the standards and practices department.
“It is factually correct,” Alfonsi wrote. “In my view, pulling it now — after every rigorous internal check has been met is not an editorial decision, it is a political one.”
According to the CBS News press department’s description of the segment, Alfonsi spoke to released deportees who described “the brutal and torturous conditions they endured inside CECOT,” one of El Salvador’s harshest prisons.
In a statement, a representative for CBS News said the report called “Inside CECOT” will air in a future “60 Minutes” broadcast. “We determined it needed additional reporting,” the representative said.
Weiss viewed the segment late Thursday, according to people familiar with the matter who were not authorized to comment publicly. She had a number of issues with story and asked for additional reporting, which could not be completed in time for airing on Sunday. A press release promoting the story went out Friday.
Weiss reportedly wanted the story to have an interview with an official in President Trump’s administration.
But Alonsi said in her email the program “requested responses to questions and/or interviews” with the the Department of Homeland Security, the White House and the State Department.
“Government silence is a statement, not a VETO,” Alfonsi wrote. “Their refusal to be interviewed is a tactical maneuver designed to kill the story.”
Alfonsi’s email said she learned the story was pulled on Saturday and that she had not discussed the matter with Weiss.
Even if Weiss’ concerns might be valid, the sudden postponement of a “60 Minutes” piece after it has been promoted on air, on social media and through listings on TV grids is a major snafu for the network.
For Weiss, it’s perilous situation as her every move as a digital media entrepreneur with no experience in television is being closely scrutinized.
As the founder of the conservative-friendly digital news site who was personally recruited by Paramount Chief Executive David Ellison, journalists at CBS News and media industry observers are watching to see if Weiss’ actions are tilting its editorial content to the right.
Before it was acquired by Skydance Media, Paramount agreed to pay $16 million to settle a Trump lawsuit making the dubious claim that a “60 Minutes” interview with Kamala Harris was deceptively edited to aid her 2024 presidential election campaign against him.
Trump recently said “60 Minutes” is “worse” under Paramount’s new ownership following an interview with Rep. Marjorie Taylor Greene, in which she was highly critical of the president and his administration.
Paramount acquired the Free Press for $150 million as part of the deal to bring Weiss over. Her first major move was to air a highly sympathetic town hall with Erika Kirk, the widow of slain right-wing activist Charlie Kirk. Erika Kirk has taken over as head of Turning Point USA, the political organization her husband founded.
Politics
DHS responds after reports CISA chief allegedly failed polygraph for classified intel access
NEWYou can now listen to Fox News articles!
The Department of Homeland Security (DHS) is disputing reports that acting Cybersecurity and Infrastructure Security Agency (CISA) Director Madhu Gottumukkala failed a polygraph after seeking access to highly sensitive intelligence, as an internal investigation and the suspension of multiple career cybersecurity officials deepen turmoil inside the agency, according to a report.
Politico reported that Gottumukkala pushed for access to a tightly restricted intelligence program that required a counter-intelligence polygraph and that at least six career staffers were later placed on paid administrative leave for allegedly misleading leadership about the requirement, an assertion DHS strongly denies.
The outlet said its reporting was based on interviews with four former and eight current cybersecurity officials, including multiple Trump administration appointees who worked with Gottumukkala or had knowledge of the polygraph examination and the events that followed. All 12 were granted anonymity over concerns about retaliation, according to Politico.
DHS pushed back on the reporting, saying the polygraph at issue was not authorized and that disciplinary action against career staff complied with department policy.
KRISTI NOEM SAYS BIDEN USED DHS ‘TO INVADE THE COUNTRY WITH TERRORISTS’
DHS disputes reports that acting CISA Director Madhu Gottumukkala failed a polygraph as staff are suspended amid an internal investigation and intel access dispute. (CISA Facebook)
“Acting Director Madhu Gottumukkala did not fail a sanctioned polygraph test. An unsanctioned polygraph test was coordinated by staff, misleading incoming CISA leadership,” DHS Assistant Secretary Tricia McLaughlin said in a statement provided to Fox News Digital. “The employees in question were placed on administrative leave, pending conclusion of an investigation.”
“We expect and require the highest standards of performance from our employees and hold them directly accountable to uphold all policies and procedures,” she continued. “Acting Director Gottumukkala has the complete and full support of the Secretary and is laser focused on returning the agency to its statutory mission.”
Politico also reported that Gottumukkala failed a polygraph during the final week of July, citing five current officials and one former official.
WHITE HOUSE CALLS REPORT ABOUT TRUMP CONSIDERING FIRING NOEM ‘TOTAL FAKE NEWS’
DHS disputes reports that acting CISA Director Madhu Gottumukkala failed a polygraph as staff are suspended amid an internal investigation and intel access dispute. (CISA Facebook)
The test was administered to determine whether he would be eligible to review one of the most sensitive intelligence programs shared with CISA by another U.S. spy agency, according to the outlet.
That intelligence was part of a controlled access program with strict distribution limits, and the originating agency required any CISA personnel granted need-to-know access to first pass a counter-intelligence polygraph, according to four current officials and one former official cited by Politico.
As a civilian agency, most CISA employees do not require access to such highly classified material or a polygraph to be hired, though polygraphs are commonly used across the Pentagon and U.S. intelligence community to protect the government’s most sensitive information.
ICE LEADERSHIP SHAKEUP EXPOSES GROWING DHS FRICTION OVER DEPORTATION TACTICS, PRIORITIES
A person administers a polygraph test. (Getty Images)
Politico reported that senior staff raised questions on at least two occasions about whether Gottumukkala needed access to the intelligence, but said he continued pressing for it even if it meant taking a polygraph, citing four current officials.
The outlet also reported that an initial access request in early June, signed by mid-level CISA staff, was denied by a senior agency official who determined there was no urgent need-to-know and noted that the agency’s previous deputy director had not viewed the program.
That senior official was later placed on administrative leave for unrelated reasons in late June, and a second access request signed by Gottumukkala was approved in early July after the official was no longer in the role, according to current officials cited by Politico.
KRISTI NOEM FACES FIRST MAJOR HOMELAND SECURITY GRILLING AS LAWMAKERS PRESS HER ON TERROR THREATS
DHS disputes reports that acting CISA Director Madhu Gottumukkala failed a polygraph as staff are suspended amid an internal investigation and intel access dispute. (Celal Gunes/Anadolu Agency via Getty Images)
Despite being advised that access to the most sensitive material was not essential to his job and that lower-classification alternatives were available, Gottumukkala continued to pursue access, officials told the outlet.
Officials interviewed by Politico said they could not definitively explain why Gottumukkala did not pass the July polygraph and cautioned that failures can occur for innocuous reasons such as anxiety or technical errors, noting that polygraph results are generally not admissible in U.S. courts.
On Aug. 1, shortly after the polygraph, at least six career staff involved in scheduling and approving the test were notified in letters from then–acting DHS Chief Security Officer Michael Boyajian that their access to classified national security information was being temporarily suspended for potentially misleading Gottumukkala, according to officials and a letter reviewed by Politico.
NOEM HITS BACK AT FEMA CRITICS, REVEALS VISION FOR DISASTER RELIEF AGENCY
“This action is being taken due to information received by this office that you may have participated in providing false information to the acting head of the Cybersecurity and Infrastructure Security Agency (CISA) regarding the existence of a requirement for a polygraph examination prior to accessing certain programs,” the letter said. “The above allegation shows deliberate or negligent failure to follow policies that protect government information, which raises concerns regarding an individual’s trustworthiness, judgment, reliability or willingness and ability to safeguard classified information.”
In a separate letter dated Aug. 4, the suspended employees were informed by Acting CISA Chief Human Capital Officer Kevin Diana that they had been placed on paid administrative leave pending an investigation, according to current and former officials and a copy reviewed by Politico.
CLICK HERE TO DOWNLOAD THE FOX NEWS APP
Gottumukkala was appointed CISA deputy director in May and previously served as commissioner and chief information officer for South Dakota’s Bureau of Information and Technology, which oversees statewide technology and cybersecurity initiatives.
CISA said in a May press release that Gottumukkala has more than two decades of experience in information technology and cybersecurity across the public and private sectors.
-
Iowa1 week agoAddy Brown motivated to step up in Audi Crooks’ absence vs. UNI
-
Iowa1 week agoHow much snow did Iowa get? See Iowa’s latest snowfall totals
-
Maine6 days agoElementary-aged student killed in school bus crash in southern Maine
-
Maryland1 week agoFrigid temperatures to start the week in Maryland
-
South Dakota1 week agoNature: Snow in South Dakota
-
New Mexico5 days agoFamily clarifies why they believe missing New Mexico man is dead
-
Detroit, MI7 days ago‘Love being a pedo’: Metro Detroit doctor, attorney, therapist accused in web of child porn chats
-
Maine5 days agoFamily in Maine host food pantry for deer | Hand Off