By Dan Kennedy • The press, politics, technology, culture and other passions

Bipartisan federal legislation would provide tax credits to ease the local news crisis

Bipartisan legislation has been introduced in Congress that would provide some government support for local news. The ubiquitous Steve Waldman, the co-founder of Report for America and the chair of the Rebuild Local News Coalition, writes that the bill “would provide more help for local news than any time in about a century, yet it’s done in a very First-Amendment-friendly way.”

Waldman has the details, so I’ll just hit the highlights:

  • It would provide a tax credit of up to $250 each year for subscriptions or donations to local news — a measure Waldman has been talking about for quite a while.
  • Payroll tax credits would be available to publishers for hiring or retaining journalists.
  • Small businesses would receive a tax credit for advertising in local news outlets.

The bill, known as the Local Journalism Sustainability Act, is co-sponsored by Reps. Dan Newhouse, R-Wash., and Ann Kirkpatrick, D-Ariz.

My reservation about this legislation is that would benefit chain-owned papers as much as it would independent papers and websites. I guess that’s OK, and it’s hard to imagine how to cut out the corporations while keeping benefits for independents. But I’m concerned that the legislation might freeze in place the advantage already held by corporate-owned legacy outlets without providing them much in the way of an incentive to improve their journalism.

On the other hand, I agree with Waldman that the legislation is ingenious in the way that it would provide government support for local news without making news organizations dependent on currying favor with the very people they’re covering. Another smart move: benefits would be limited to organizations with fewer than 750 employees, which would leave out the large national newspapers.

Overall, it’s a pretty interesting step that might help ease the local news crisis. I don’t see this as a comprehensive solution, but even a boost on the margins would help.

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  1. pauljbass

    I disagree respectfully. It’s not “OK” to subsidize hedge funds destroying local media by using taxpayer money to cover the cost of the last vestiges of reporting they retain … And even the good-faith chain owners propping up a dying business model; I don’t see how tipping the scales to advantage them over public-interest alternatives helps us reach the larger goal.

  2. Dan Kennedy

    Paul, how would this legislation advantage chain owners over public-interest alternatives? The benefit would be there regardless of the business model.

    • pauljbass

      You definitely could be right about that! I’m viewing the propping up of destructive capital enterprises as potentially crowding out growing public-interest enterprises from capturing more dollars and support to grow further. But I can definitely see it from your view: Our revenue streams don’t overlap all that much (except when the dying for-profit print-centered dailies become faux-nonprofit, a new trend); and readers tend to be more interested, I think, in reading an additional story about a topic they’ve already read elsewhere. To support your point further, we’re all trying to increase the number of local media outlets, with the idea that more is better.
      I do retain an ideological objection. It seems sick and insane for our tax dollars to subsidize profits by corporate chains that don’t really have a local commitment, companies that already benefit from a tax code way skewed to corporate chains, private equity and wealthy investors. We;re helping them make more money through a slower hollowing out of the assets.
      I also have an ideological objection (from a different side) about interfering in the marketplace to prop up dying business models rather than allowing newer ideas, newer energy, grassroots alternatives to replace failed enterprises that have poorly served the public. (I lack the nostalgia for late 20th century corporate chain-owned “local” daily newspapers that many of our peers have. I think they helped destroy the business before the Internet finished the job, and the new models do a better job of information people, engaging them in public debate, and strengthening democracy.)

      • Dan Kennedy

        Paul, just to be clear, these tax credits would benefit nonprofit startups as well. If we could find a to help the independents while cutting out the chains, I’d be all for it. And maybe there is a way. Waldman has also talked about tax incentives for chains to sell to local owners. I would add tax penalties for chains that don’t.

        • pauljbass

          I think those ideas are all good on the merits. On this issue, I lean a bit more libertarian — leave government out as much as possible (including in using tax money to steer where advertising goes, with the argument that the long-term sustainability depends on finding revenue sources that make sense on their merits, which can be done! See Axios Charlotte …) Given that the real world is more complicated — i.e., that charitable deductions do exist — I’d stick more modestly with the $250 deduction (but only to nonprofits) …

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