Good morning, it’s Monday, January 12, 2026. In today’s edition, chatbot regulations in the spotlight; AI growth helps California’s budget gap; Denver vies for 2028 Dem convention:
Top Stories
ARTIFICIAL INTELLIGENCE: Lawmakers have filed or pre-filed more than a dozen bills to regulate AI chatbots amid concerns about their potential to harm kids or masquerade as therapists. New York adopted the first chatbot regulations last year, and new bills have been introduced in California, Florida, Michigan, Missouri, Ohio, Pennsylvania, Tennessee and Washington. (Pluribus News)
BUDGETS: California Gov. Gavin Newsom (D) has proposed a $348.9 billion budget, up 8.7% over last year, as soaring tax collections shrink the projected deficit. The budget does not propose significant new spending, as most of the increase comes from required hikes to education spending and state savings. The income tax windfall has come largely from tech worker pay as valuations of California-based AI companies skyrockets. (Pluribus News)
IMMIGRATION: The New Jersey legislature is fast-tracking bills to limit cooperation with federal immigration authorities, limit immigration enforcement at “sensitive locations” like shelters, schools and health care centers, and bar government entities from asking about immigration status. The bills passed through legislative committees the day after an ICE officer shot and killed a woman in Minneapolis. (New Jersey Monitor)
CHILD CARE: A federal judge has temporarily halted the Trump administration’s bid to freeze $10 billion in federal funds for child care and other social programs. The freeze, prompted by alleged fraud in New York, California, Colorado, Illinois and Minnesota, would have required the states to submit justifications and receipts before money was released. (Albany Times Union)
MEDICAID: Florida Sen. Don Gaetz (R) and Rep. John Snyder (R) have introduced legislation booting Medicaid recipients aged 18-64 from the rolls if they do not meet work, education or training requirements. The bill requires recipients to work or attend school or training for at least 80 hours a month. (Florida Politics)
LGBTQ RIGHTS: The U.S. Supreme Court will hear oral arguments this week in a challenge to West Virginia and Idaho laws forbidding the participation of transgender athletes in school sports. The cases are West Virginia v. B.P.J. and Little v. Hecox. (WV Metro News)
ENERGY: Meta, the parent company of Facebook and Instagram, has signed a 20-year deal with energy company Vistra to acquire 2,600 megawatts of nuclear energy from plants in Ohio and Pennsylvania. The deal will allow Vistra to extend operations at the two Ohio plants, which Meta framed as a boost to jobs. (State Affairs)
PUBLIC SAFETY: Illinois Rep. Katie Stuart (D) has introduced a bill to require registered sex offenders to register any drones they own with the Illinois State Police. The bill would also require registrants to provide authorities with personal information including their online and social media identities. (MyStateline)
In Politics & Business
DEMOCRATS: Denver Mayor Mike Johnston (D) says his city has submitted a bid to host the 2028 Democratic National Convention. The DNC’s 2008 convention in Denver brought $266 million in economic activity to the metro area. (Denverite)
Our hot take: Both parties should host conventions in Las Vegas. No more long commutes between hotels and convention centers, and a good economic boost to a struggling economy in a swing state.
CALIFORNIA: Attorney General Rob Bonta (D) will run for re-election, ending speculation that he could jump into the race for governor. Bonta called allies to inform them of his decision on Sunday. (Politico)
Good news for the other 8,734 Democrats running for governor this year.
MICHIGAN: Lt. Gov. Garlin Gilchrist (D) has ended his bid for governor and will run for Secretary of State instead. Gilchrist becomes the biggest name in either party to run for the administrative post, giving incumbent Jocelyn Benson (D) a clearer shot at the Democratic nomination for governor. She faces Genesee County Sheriff Chris Swanson (D) in the primary. (Detroit News)
PEOPLE: Former New Jersey Gov. Richard Codey (D) has died at 79. The former Senate president, thrust into the state’s top job when then-Gov. Jim McGreevey (D) resigned in 2004, served 52 years in the legislature, the longest tenure of any lawmaker in state history. (Insider NJ)
By The Numbers
0%: The share of California that is considered dry or in drought, according to the U.S. Drought Monitor. It’s the first time in 25 years that none of the state has been in drought after a series of atmospheric rivers hit the West Coast. (Sacramento Bee)
$1.65 billion: The total marijuana sales in Massachusetts in 2025, a new record but up only $3 million from 2024. Retailers recorded 46.3 million transactions last year. (State Affairs)
12,104: The number of bear sightings in Connecticut last year, according to the Department of Energy and Environmental Protection. West Hartford residents reported seeing the most bears, 1,093. (CT Insider)
Off The Wall
Texas health officials are proposing raising licensing fees for some hemp businesses by as much as 13,000%. Manufacturer licenses could increase from $250 to $25,000 per year, while retail registrations would rise from $150 to $20,000 per location. Industry members say the price hikes would effectively kill smaller retailers. (Texas Tribune)
A flock of 50 sheep walked into a grocery store. It’s not a set-up for one of our terrible jokes, it actually happened in the German town of Burgsinn, where sheep escaped their shepherd and left a trail of destruction and, well, leavings in their wake. The shepherd said the sheep had been distracted by acorns in the store’s parking lot, then wandered inside for more snacks. (UPI)
Quote of the Day
“I’m hopeful that we can have some fruitful conversations about this before they just cast votes along party lines.”
— Kansas Rep. Dan Osman (D), on Republican plans to further restrict the use of diversity, equity and inclusion initiatives on college campuses. (State Affairs)