Supporting local journalism with the Local Journalism Sustainability Act

Parker Higgins

Advocacy Director

Andrew Bossi, CC BY-SA 2.5

Local journalism is critical to communities all over the country, but many organizations that have long employed reporters to cover important local news stories have struggled to find a financial footing over the past several decades.

The Local Journalism Sustainability Act — a bill introduced with bipartisan support in the House of Representatives and a notable slate of Democratic backers in the Senate — aims to remedy that disconnect with a collection of temporary benefits that could sustain small local news outlets and give them time to retool.

We are usually wary of federal legislation aimed at supporting local journalism, despite its importance, because of conflicts of interest that can emerge from the government picking what kinds of outlets qualify, or from direct subsidies coming from the subject of coverage. The Local Journalism Sustainability Act seems to solve those long-standing issues in an innovative way. We at Freedom of the Press Foundation endorse the bill.

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Instead of laying out strict criteria to qualify for direct subsidies, the LJSA would provide three primary mechanisms that would potentially help all small local news outlets. Perhaps most notable for most readers, the law would cover a large portion of the cost of a local newspaper (or news non-profit) subscription in the form of a tax credit, up to $250. For the five years this law would be in effect, more Americans could pay much more than they currently do for local news with a subsidy from the federal government. This prong is well-structured: for households that pay federal income tax, a tax credit is effectively direct money towards subscriptions, more readily available than an itemized deduction, and would incentivize local news outlets to form relationships with readers.

The second mechanism is a payroll tax credit for the news outlets themselves towards the salaries of reporters, editors, and photographers. For outlets facing a vicious cycle of declining revenues leading to diminished newsroom staff leading to a less obvious value proposition to readers, a cash infusion that allows newsrooms to staff up could help tremendously.

Finally, also on the revenue side, the bill would provide tax credits to small businesses that pay to advertise on local news sites, in newspapers, or on television and radio.

American federal support of news reporting and publishing is nearly as old as the country itself, including similarly “content-neutral” postal subsidies for newspaper and pamphlet delivery. Over that time, defining "journalism" in a way that includes innovative and independent outlets has been a hard problem only gotten more difficult. (That difficulty has often been our sticking point with other proposals, such as increasing penalties for assaults on journalists.)

But it's undeniable that local news reporting provides important benefits to the communities that can sustain commercial or nonprofit newsrooms. This bill takes a very broad approach to the question of definition, and makes it easier for those communities to provide their own support for local outlets.

That reliance on existing community support has its flaws, too. For one thing, historically marginalized and underserved communities may not have existing outlets (or subscriber bases) to build up with the tax benefits. And by contrast, the many legacy outlets that have been dramatically cut back by hedge fund or private equity purchasers could stand to receive these benefits. Still, it would provide major help for many existing newsrooms that provide important coverage and could use the lifeline.

With broad bipartisan support in the House, this bill would have good odds in that chamber. Although the co-sponsors on the Senate side are exclusively Democrats to date, its supporters aim to include a version of this bill in the $3.5 trillion reconciliation package that is likely to pass with or without Republican support.

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