The rush to save local journalism

News outlet attrition has prompted a fresh look in statehouses at how to help the industry.
A sample of the Maine daily and weekly newspapers is seen, Tuesday, Aug. 1, 2023, in Augusta, Maine. (AP Photo/Robert F. Bukaty)

Lawmakers are searching for ways to throw a life ring to the news industry, as business models implode and local news withers amid evaporating ad revenues, subscription struggles and corporate buyouts.

The ongoing attrition combined with growing concerns about the state of democracy, especially on the political left, has prompted a fresh look in some statehouses at ways to prop up the news business.

A California Senate committee held an informational hearing last week on ways to sustain journalism, including through tax credits or even a potential tax on digital ads, similar to what Maryland lawmakers adopted in 2021.

“This discussion of sustaining journalism is … one part health check; it’s one part autopsy; and it’s one part rescue mission,” Sen. Steven Glazer (D), chair of the Revenue and Taxation Committee, said at the start of the hearing.

The news business’s decline — particularly the toll taken on local newspapers — is more than two-decades in the making. It was precipitated by a shift to internet-based advertising.

A 2023 report on the state of local news from the Medill School of Journalism at Northwestern University found that “residents in more than half of U.S. counties have no, or very limited, access to a reliable local news source — either print, digital or broadcast.”

Bills in California, Illinois and New York would require major online platforms to remit payments to news organizations. Legislators are also proposing grants and other forms of support to aid local news.

“We’re not trying to say how local journalists should cover communities. But I do think the state government has a role in making sure that there are local journalists,” Illinois Sen. Steve Stadelman (D) recently told Nieman Reports.

Stadelman, a former television journalist, is sponsoring two bills this year aimed at revitalizing the news business. The Journalism Preservation Act would require tech companies such as Google and Meta to pay a journalism usage fee every time they link to or display news content to Illinois residents.

The second bill, the Strengthening Community Media Act, would provide tax incentives for newsrooms to hire more reporters while giving small businesses a tax break for advertising with local media. It would also mandate that state agencies direct at least 50% of their total advertising spending to local news outlets and require written notice before an Illinois news company is sold to an out-of-state owner.

The proposals grew out of a report written by the Illinois Local Journalism Task Force, which Stadelman chaired, that said Illinois has lost a third of its newspapers and 86% of its newspaper jobs since 2005.

The Illinois journalism usage fee bill mirrors 2023 legislation from California Assemblymember Buffy Wicks (D) that faced stiff opposition from the tech industry and questions about how it would work in practice. Wicks ultimately tabled the bill with the intent to move it forward later this year.

New York Assemblymember Anna Kelles (D) also introduced a journalism usage fee bill last year. The American Civil Liberties Union opposed a similar bill introduced in Congress, saying it would “interfere with the First Amendment rights of platforms, and the public’s ability to access news.”

The usage-fee measures would establish an arbitration process to determine the appropriate amount of money that each news organization would be owed, based on a percentage of the social media platform’s advertising revenues. The California and Illinois bills would require that news organizations reinvest 70% of the fees received back into supporting journalists and journalism.

Chamber of Progress, a center-left tech industry group, warned in a letter this month that the Illinois measure “could have the unintended consequence of helping conservative national media more than local Illinois media.”

The tech industry has described usage fees as a “link tax” and said they are unconstitutional. Last year, Google ran ads opposing the California bill, while Meta threatened to block news on Facebook and Instagram if the measure passed.

Meta blocked Canadian news last year after enactment of the country’s Online News Act, which also requires payment to news sites. In a recent statement regarding the Illinois legislation, the company warned of a similar consequence.

“If faced with legislation that requires us to pay for news content that publishers voluntarily post on our platforms and is not the reason most people come to Facebook and Instagram, we will be forced to make the same business decision that we made in Canada to end the availability of news in Illinois,” Meta said in a statement.

The unrelenting crisis in journalism has spawned myriad other proposals.

A Maryland bill would create a Local Journalism Sustainability Grant Program that allows small businesses to receive grants up to $1,000 to recover the cost of advertising in local newspapers.

Lawmakers in Massachusetts introduced a bill to give tax credits to both newspaper subscribers and publishers. A second bill would allow government entities that are required to publish legal notices in local newspapers to also publish on community news websites.

New York lawmakers introduced a journalism tax credit measure as well as a payroll tax credit for journalist employers. Wisconsin lawmakers introduced legislation similar to what New Jersey lawmakers approved in 2018, creating the Civic Information Consortium to help fund local journalism and news startups.

Washington State lawmakers last year exempted newspapers from the state’s business tax — after previously enjoying a preferential rate — with the goal of preserving journalism jobs and entities. They also funded a new journalism fellowship program to place 16 journalists with news partners in underserved areas, modeled on the California Local News Fellowship program at UC Berkeley.

“I know what it means for the press corps to hold elected officials’ feet to the fire, and it’s an important part of our democratic process that we can’t let slip away in towns around our state,” Sen. Karen Keiser (D), a former journalist who championed the program, said in a statement after the funding was approved in April.