Let’s shore up funding for local news

Caitlin Vogus Headshot

Deputy Director of Advocacy

Local news organizations are the lifeblood of many communities, but decreasing revenues have caused thousands to die out in recent years.

Kamoteus (A New Beginning), via Flickr, CC BY 2.0.

After nearly a century, The Welch News in McDowell County, West Virginia, closed its doors earlier this year, leaving county residents without a local news source. The newspaper, the “heartbeat” of the community, fell prey to the same financial hardships that have led to the closure of thousands of local newspapers in America since 2005.

Now, a new bill in Congress aims to help small struggling news outlets survive these financial headwinds. The Community News and Small Business Support Act, introduced by Rep. Claudia Tenney and co-sponsored by Rep. Suzan DelBene, is a bi-partisan bill (PDF) that would give tax credits to small businesses that advertise in local media and a payroll tax credit to local news outlets that employ reporters in their communities. According to the Rebuild Local News coalition, the payroll credit could provide newsrooms with as much as $85,000 over the course of five years for each full-time local journalist they employ.

The proposed legislation is similar to the Local Journalism Sustainability Act, which Freedom of the Press Foundation (FPF) endorsed, but which failed to pass in the previous Congress. FPF is proud to support this new version of the bill, which attempts to address the crisis in funding for small, local news outlets through tailored advertising and payroll tax credits.

Importantly, the Community News and Small Business Support Act is carefully drafted to ensure the government can’t pick partisan favorites or otherwise influence news coverage in the outlets that would benefit from the tax credits. Instead, the criteria for qualifying for the tax benefits focuses on the size and local nature of the news outlet.

Under the proposal, the credits are available for local newspapers that employ local news journalists or for small businesses that advertise in a local TV or radio station or newspaper. A “local newspaper” includes any news publication that primarily serves the needs of a region or community and has at least one full-time journalist who lives in the community and no more than 750 employees. However, newsrooms controlled or significantly funded by advocacy groups or political organizations, like unions or political action committees, can’t qualify for the credits. This restriction is intended to “prevent wholly partisan or ‘pink slime’ outlets from cashing in,” according to one report, and it applies regardless of the political leanings of the controlling entity.

This broadly drawn definition means that a wide variety of local news outlets could receive payroll tax credits under the law, and community businesses will have leeway to support the newspapers that best serve their communities. Putting funding of news in the hands of communities like this is a smart approach.

Of course, there are still some funding problems the Community News and Small Business Support Act wouldn’t solve. For one thing, as we explained with the LJSA, providing tax credits for existing local newspapers may be less helpful to historically marginalized and underserved communities, which may not have existing news outlets. Start up (or re-start up) costs may be prohibitive. This bill will help sustain local news, but even more must be done to regrow it.

In addition, the new bill does not include the LJSA’s tax credit for individual taxpayers who subscribe to news outlets, which DelBene has said is too complicated. It's a shame for the proposed legislation to drop this idea, which could have encouraged more people to subscribe to local news and, through those subscription choices, democratized local media funding by giving individuals a say in which outlets benefit. But if simplifying the bill will increase its chances of passage, it's worth it to enact the advertising and payroll tax credits, which would make a meaningful difference to the financial state of local news by themselves.

Congress must not stand by as local news organizations continue to go dark in community after community. This new bipartisan proposal would provide a financial boost for local news outlets in a creative and constitutionally-sound way. They say that nothing is certain but death and taxes — so how about using taxes to do some good, and avert the death of local news?

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