The debate over the $3.5 trillion budget reconciliation has centered on issues such as childcare, climate change and Medicare expansion. It may extend to a debate over incentives to bolster flagging local news outlets.
Bills with bipartisan support have popped up in the House and Senate to provide tax credits for newspaper subscribers and advertisers, as well as for newspaper owners who hire local reporters.
Individuals could receive a $250 tax credit for subscribing to a local newspaper or donating to a local nonprofit news organization. Businesses that advertise in local newspaper, radio and television stations would be eligible for a five-year tax credit. News organizations could earn a five-year tax credit for each local reporter.
The Senate version of the Local Journalism Sustainability Act is cosponsored by Washington Senator Maria Cantwell and Oregon Senator Ron Wyden, both Democrats. The House version is cosponsored by Washington Congressman Dan Newhouse, a Republican from Sunnyside.
Backers of the legislation say it is necessary to sustain local news organizations as they struggle to find their financial footing in a digital world. Critics say the federal government has no business getting involved with the business of newspapering, that should rise or fall on their own. Still others worry about how news organizations qualifying for federal tax credits will be defined.
Margaret Sullivan, media columnist for The Washington Post, noted, “For many journalists, the notion of government funding has long been a kind of dangerous third rail not worth the risks.” But, she added, “having watched the grim consequences of local news’s worsening decline over the past two decades, I think the Local Journalism Sustainability Act has real value.”
“The act could provide some relief to news organizations that are gasping for breath as they to refigure their business models,” Sullivan said. “If they survive, communities would benefit.”
Newhouse made the same point in introducing the House bill. “Local journalism, no matter what form it’s in, truly does contribute to the fabric of a community,” he said. “You’re not going to find too many large-market sources of news reporting on your local city council or high school basketball scores.”
A study by the University of North Carolina’s School of Media and Journalism found more than one in five newspapers have closed in the last 15 years, cutting the number of working reporters in half. News outlets that remain often resemble “ghost papers” with barebones staff and little news.
The absence of a local news outlet has led some disappointed former readers to rue, “Our community does not know itself and has no idea of important local issues or how the area is changing, challenged by growth or the impact of climate change. We are a nameless, faceless town.” UNC researchers call these communities “news deserts”.
Steven Waldman, a veteran journalist and cofounder of Report for America, which places young journalists in local newsrooms to report on under-covered stories, has amassed a coalition of 3,000 news organizations in support of the legislation. Waldman says, “Our mission is to strengthen our communities and our democracy through local journalism that is truthful, fearless, fair and smart.”
Waldman says tax credits to fortify newspaper readership, advertising and local reporting staffs is “bottom-up, market-oriented, temporary, nonbureaucratic, content neutral and entirely focused on local news.”
Liberals wanted the legislation to provide grants, not tax credits, according to Waldman, but the bills are structured so smaller news organizations, their subscribers and their advertisers can benefit.
The “content neutral” provision opens the door to partisan publications qualifying for tax credits, including “hyper-partisan aggregation sites that mimic local newspapers,” Waldman concedes.
Sullivan quotes media critic Nikki Usher, author of News for the Rich, White, and Blue, who sees the legislation mostly benefitting “wealthy people who are itemizing their deductions”. Usher also believes “codifying what counts as a news organization at the federal level is liable to get messy quickly.”
Coming from a news background, I share the concern of critics over the precedent this legislation would establish. Entangling federal financial support with local news outlets poses dangers that may be as bad or worse than the disappearance of local media outlets.
Tax credits to fortify newspaper readership, advertising and local reporting staffs is “bottom-up, market-oriented, temporary, nonbureaucratic, content neutral and entirely focused on local news” strategy.
Sullivan cites Jim Friedlich, executive director of the Lenfest Institute, the nonprofit organization that owns the Philadelphia Inquirer, who estimates a regional news organization with 50 reporters could receive around $1 million in tax credits.” Friedlich said this could be “potentially the most important legislation for local news in the last hundred years.”
At the same time, it could be the most disastrous legislation for local news in the last hundred years if it enriches partisan publications, invites government meddling in news decisions and fails to sustain news outlets committed to accurate and truthful reporting. It’s naïve to believe meddling by government officials wouldn’t occur.
Two failsafe provisions worth considering are a hard sunset for the tax credits so they can’t be renewed and prohibitions with teeth against federal officials trying to meddle in news decisions. Local news is worth the investment, if the investment is designed so it doesn’t distort the news that viewers get.
Media companies face other challenges that will shape their future. Will they be able to receive compensation from Google and Facebook for their news content? Will viewer distrust of so-called mainstream media continue to metastasize? Will disinformation further distort the media landscape? Can traditional media outlets transform themselves into viable, multi-channel news providers? Tax credits won’t determine the answer to those questions, but they may give local news outlets hanging on by a thread a little longer to figure out a sustainable way forward.