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.

Local news as infrastructure

Report for America co-founder Steve Waldman is suggesting that a plan he’s been touting to help the beleaguered local news business be included in whatever infrastructure bill comes out of Congress.

Writing recently for Poynter Online, Waldman said that each American should be given a $250 tax credit either to buy a subscription to a local news source or to make a donation to a nonprofit news organization. He notes that Sen. Maria Cantwell, the chair of the Senate Commerce Committee, has come out in favor of $2.4 billion to bolster local news. Waldman writes:

Local news is, in fact, the civic infrastructure of democracy.

But let’s get less metaphorical. If the health of democracy wasn’t reason enough, there’s another, practical reason why help for local news should be part of the infrastructure bill. If the government is going to spend a trillion or so dollars on public works projects, we need local watchdog reporters to make sure the money is spent well.

Waldman has been promoting the $250 tax credit for some time, and he says it has some bipartisan support. But the idea of rolling it into the infrastructure bill seems worth exploring as a way of actually making it a reality.

Waldman discussed his Poynter piece with Brian Stelter last weekend on CNN’s “Reliable Sources.” He’s also involved in an organization called the Rebuild Local News Coalition, comprising more than 4,000 local newsrooms (up from about 3,000 at the time of the Poynter piece) and journalism advocacy organizations.

Is government-funded local journalism an idea whose time has come?

U.S. Treasury. Photo (cc) 2007 by Adam Fagen.

The local news crisis has some people talking seriously about government funding for journalism. The idea isn’t entirely new. Nonprofit news organizations enjoy tax benefits, and public broadcasters receive some federal money. As I recently reported for GBH News, federal pandemic relief actually meant that 2020 was a better year than 2019 for some media outlets.

But what comes next? Local media are being squeezed on one side by technology and on the other by avaricious chain ownership. Ideally, you would want to find ways to help independent news organizations without rewarding the corporations and hedge funds that are cutting newsrooms without conscience. But it’s hard to imagine how you would draw distinctions between the two.

Moreover, direct government assistance raises serious questions about how journalism can play its traditional watchdog role if it’s receiving money from the watchdog. It strikes me that it would be a hard sell with taxpayers, too. Nevertheless, some smart people are thinking about how we can provide communities with the news and information they need in an era of market failure.

One idea was offered recently by Osita Nwanevu in The New Republic. Under the headline “The Next Infrastructure Bill Should Save Local Journalism,” Nwanevu writes:

Really, the administration’s push for a more capacious definition of infrastructure should encourage us to think even more creatively about what else should qualify for the next package as it takes shape. Can it seriously be argued, for instance, that access to the news isn’t an important feature of any well-functioning society? We all depend upon a steady stream of accurate information; obviously, we owe much of our awareness that America’s infrastructure is crumbling to the work of journalists who helped alert policymakers and the public to the problem in the first place.

Nwanevu notes that the $3 per capita we currently spend on public broadcasting is a pittance compared to the $90 that is the average in many other developed countries. He also writes favorably of ideas that Andrew Yang put forth during his presidential campaign for a fellowship program for journalists and a “Local Journalism Fund” to help news outlets transition to sustainability. But Nwanevu is also thinking bigger than that, calling for $30 billion to $40 billion over the next 10 years.

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I’m not sold, though, mainly because Nwanevu only half-defines the problem. He cites the challenges posed by technology and the rise of Google and Facebook, but he makes no mention of corporate ownership, which has made the crisis much worse than it needed to be. With chains like Gannett and hedge funds like Alden Global Capital bleeding their newspapers dry, there is no money left over to invest in the future. Meanwhile, a number of independent news organizations across the country, for-profit and nonprofit, are doing a good job of serving their communities. We need more.

The Columbia Journalism Review recently published a conversation with the longtime media reformer Robert McChesney; Steve Waldman, the co-founder of Report for America; and the economist Andrea Prat. All of them offer their own ideas for providing some public assistance for news, with McChesney’s proposal for a “Green New Deal for journalism” being the most ambitious. He describes the challenge this way:

This is the public policy imperative facing the United States regarding journalism in 2021: we need the funding to support independent, competitive, professional local news media. That money must come from the government, but we cannot allow the government to pick and choose who gets the money. The policy must be like the postal subsidy of newspapers: large enough to get the job done, and it cannot discriminate on the basis of ideology or political viewpoint. Censorship is entirely unacceptable. It must allow the people to make of it what they will, and trust them in the process of self-government.

So how would McChesney accomplish that? Through elections at the county level (that wouldn’t really work in Massachusetts, which is pretty much county-free) to elect boards that would distribute between $32 billion and $35 billion a year over a five-year period to fund local news and foster the development of new nonprofit organizations. It’s pretty breath-taking, and McChesney admits there’s no support for such a plan in Washington at the moment. But the value McChesney has always brought to the table is that he thinks big and gives us a chance to wrap our minds around larger possibilities.

Waldman’s plan, by contrast, already has a great deal of support on Capitol Hill: a $250 refundable tax credit to pay for local news subscriptions or to donate to nonprofit media outlets. He would like to see a tax credit for hiring and retaining journalists as well, which is something currently being done in Canada.

Prat, though, argues that the tax credits would mainly benefit large news organizations, whereas “the most urgent problem is not the overall information level but its distribution across the population.” A voucher system, he says, “would give more access to information-poor people.”

So, has the moment come for government-funded news? My own guess is probably not, at least if we’re talking about the ambitious proposals put forth by Nwanevu and McChesney. But some modest assistance aimed at helping news organizations make the transition to a sustainable future might well be a good idea.

Waldman’s tax credits and Prat’s vouchers could be seen as extensions of the help we already provide through nonprofit tax incentives. And surely we can provide more funding for public media while broadening the definition to include community-based journalism.

Everything needs to be on the table.