Washington Sen. Maria Cantwell leads push to send taxpayer support to news organizations

Tucked into President Joe Biden’s proposed nearly $2 trillion social spending bill is a provision to boost local media through tax incentives meant to help an industry battered by the COVID-19 virus.

The Local Journalism Sustainability Act (LJSA), first introduced in July, would provide a local media advertising credit of up to $5,000 in the first year and up to $2,500 in the next four years, covering 80% of advertising costs in the first year and 50% in the following four years.

Other elements of the bill would provide a federal tax credit to local media outlets that hire local news reporters, covering half of compensation up to $50,000 in the first year, and 30% of compensation up to $50,000 in the following four years. To be eligible, reporters would need to meet a minimum of 100 hours of work per quarter.

The Joint Committee on Taxation estimates the cost of the legislation at $1.67 billion over 10 years.

“Journalistic standards, local newspapers and broadcasters play a critical role in holding our elected officials accountable, shining a spotlight on important news and challenging the issue of our community to come to light,” said U.S. Sen. Maria Cantwell of Washington state, author of several portions of the local journalism bill, during a floor speech Friday.

“The Local Journalism Sustainability Act is essential to maintaining that trust, that diversity of voices and that local perspective,” said Cantwell, who is quarterbacking the effort in the Senate as part of the budget reconciliation process. “The tax incentives in this bill will help local newspapers and digital-only news journalists, and broadcast newsrooms remain financially viable to retain and hire local base journalists to cover local news stories.”

Cantwell previously helped to get radio and television included in the federal Paycheck Protection Program after most stations were initially prevented from securing funds from the business loan program meant to ameliorate the impact of the pandemic.

In Oct. 2020, Cantwell’s office released a report detailing the decline of local journalism in the information age. Over the last 20 years, according to the report, the local newspaper industry has lost approximately 70% of its total revenue and newspapers have let go of more than 40,000 journalists accounting for 60 percent of the journalistic workforce.

At least one prominent media organization and several newspaper industry and journalist unions have gone on record supporting the proposal, urging Congress keep it in the final Build Back Better legislative package, including National Pubic Radio, the AFL-CIO, NewsGuild-CWA and the Writers Guild of America, East.

Jessica Keller, editor of two weekly community publications The Eatonville Dispatch and the Queen Anne & Magnolia News, favors the legislation.

“Journalism, especially community journalism, is so important in this country, and anything to help sustain our organizations is welcome,” she said. “I also think the LJSA would be a small but important way legislators can demonstrate their support for the work that we do, which frequently only comes with words, but no accompanying action, if it comes at all. Hopefully, it would also help reinforce the idea to the public that journalism is necessary in a healthy, progressive society and needs to be nurtured and not silenced.”

Patrick Grubb, publisher of The Northern Light weekly newspaper in Blaine echoed those sentiments.

“As a small town newspaper publisher, I appreciate any effort that will help us survive the crisis facing us in the industry,” he said.

Grubb went on to ask, “Are small town newspapers making enough profits that a tax credit for hiring journalists will be an incentive? The advertising credit is a nice idea, though. Regardless, I don’t want to sound churlish about it, and anything helps.”

Then there are the inevitable First Amendment considerations related to the prospect of journalists having Uncle Sam pick up half the tab for their salaries.

“In my mind, editorial independence is critical,” said Bruce Pinkleton, dean and professor of the Edward R. Murrow School of Communication at Washington State University. “Ideally, local news outlets could avoid government support and the potential appearance of a conflict of interest. Given the current circumstances many local news outlets face, however, and the reality of many citizens living in small communities lacking a source of local news, I appreciate all the support local news outlets receive, as they are a critical part of many communities.”

Pinkleton's colleague at Western's media school, Benjamin Shors, added, "It's important to note that this funding is primarily through tax credits, not direct payments to the media companies. As you know, many industries receive targeted tax credits. The loss of local newspapers has resulted in lower voter turnout and less civic engagement in these 'news deserts.' The decline in local news is not just a journalism problem; it's a democracy problem."

With negotiations ongoing, it remains to be seen if lawmakers can iron out differences between the House and Senate versions of the bill, including the size of companies eligible for the bill’s tax credit and tax breaks. For example, the Senate version would allow a company to have up to 1,000 employees, while the House version would allow up to 750 employees.