by Farnoush Amiri and Tali Arbel
WASHINGTON (AP) — President Joe Biden’s $1.85 trillion social spending bill includes a provision that, if it becomes law, marks the first time the federal government has offered targeted support in response to the decline of local news.
Help will come in the form of payroll tax credits for companies that hire eligible local journalists. The measure would allow newspapers, digital news outlets and radio and television stations to claim tax credits of $25,000 in the first year and $15,000 for 1,500 journalists over the next four years.
It is a response to growing alarm that the elimination of newsroom jobs is leaving communities without access to critical information. Concerns have risen since May, a hedge fund with a reputation for ruthless cost-cutting, called the Tribune, one of the nation’s largest newspaper chains, in. Nearly one-quarter of the nation’s newspapers have closed and half of local journalism jobs have been lost in the past 15 years, according to research from the University of North Carolina.
This leaves approximately 1,800 communities without any local newspapers.
But the credit, which will be worth $1.67 billion over the next five years, poses some stress for the industry. Some top Republicans in Congress have ridiculed it as a handout. Prominent journalists also acknowledge that it is strange to receive financial support from the government they cover independently.
Still, given the crisis the industry is facing, many journalists say the risk is worth it.
“It’s only a reluctant response to local news and fears of the collapse of their business model,” said Steven Waldman, president and co-founder of Report for America, an organization that places journalists in local newsrooms, including the Associated Press. The press is also involved. “Most journalists start out with a healthy skepticism about the government being involved and helping journalism. And that’s justified.”
“But,” he added, “the reason why this is happening right now is the gravity of the crisis.”
Government assistance to the media, directly or indirectly, is not new. This goes back to the early days of the country when Congress periodically subsidized postage rates. Recently, a pandemic-era small business loan program provided news organizations with millions.
The provision has been supported by more than a dozen House Republicans, although the second-ranked GOP leader, Representative Steve Scalise of Louisiana, called it a scam in a recent tweet. “Make no mistake – it’s Biden and the Dems in Congress helping pay the salaries of journalists who cover for them,” he tweeted.
The fate of the proposal ultimately hinges on how Congress proceeds with the sweeping legislation, which has attracted only Democratic support and has been mired in divisions in the House and Senate. Notably, it is one of the few provisions that House and Senate Democrats have already agreed upon.
Lawmakers will resume debate on the bill when they return to Washington this coming week.
While the main objective of the proposal was to save small papers, which were hit hard by evaporating advertising dollars at the start of the pandemic, it would help some of the larger companies. Should the tax break become law, according to an analysis by the AP, Gannett, one of the nation’s largest remaining newspaper chains, could see a profit of up to $127.5 million over five years.
Maribel Perez Wadsworth, who runs Gannett’s news division, which employs more than 4,000 journalists at USA Today, and local papers such as The Arizona Republic and Detroit Free Press, called the credits a “good shot in the hand”. He did not specify how the money would be used.
AP spokeswoman Lauren Easton declined to comment on the tax credit.
Rep. Ann Kirkpatrick, D-Ariz. introduced the credits as a piece of legislation last year with Rep. Dan Newhouse, R-Wash.
One of the proponents of the job tax credit was the community-newspaper chain Vic Communications, based in the Sierra Vista, Arizona – congressional district of Kirkpatrick. CEO Francis Wick said revenue has fallen by nearly half since 2009, with ad-sales falling sharply during the pandemic as local businesses reduced advertising. To cut costs, the company consolidated city papers into regional titles, cut print publication days, and fired journalists.
The tax credit, which will add an additional $2 million for the company in its first year, will help papers in the 11-state chain trying to transition to a digital-focused model with more paying customers, Vick noted. Said instead of focused. Strictness on cutting expenses
“We need to make sure that eventually we can do our job,” Vick said.
The motion has a prominent supporter of House Speaker Nancy Pelosi, who had long supported local journalism to help. But the issue became more personal when his hometown paper, The Baltimore Sun, was acquired by hedge fund Alden Global Capital, despite efforts by journalists and community members to steer the paper to local ownership.
One of those local advocates, former Maryland County Executive Ted Venetolis, called on Pelosi after Alden’s purchase, urging her to support the credit, which at the time of that phone call was already in the comprehensive Biden package.
It will be the last time that Venetulis and Pelosi, D-Calif., will speak before dying in early October, the speaker said in an obituary in the newspaper and his office confirmed to the AP.
The provision is put in place to try to keep money from visiting partisan sites that are promoted as local news or fake-news operations, casting a wide net about which organizations are considered legitimate local news outlets, regardless of whether Be they hedge fund-owned chains, nonprofits, print, digital, radio or TV.
“It’s not the government deciding who gets it and who doesn’t,” said John Schleus, president of Newsguild, a union that represents journalists, including the AP. Are?
Arbel reported from New York.