WASHINGTON (AP) – President Joe Biden’s $ 1.85 trillion social spending bill includes a provision that, if it becomes law, would be the first time the federal government has offered targeted support in response to a decline in local news.
The aid will be provided in the form of a payroll tax credit for companies that hire local journalists. The move will allow newspapers, digital news outlets, radio and television stations to qualify for a $ 25,000 tax break in the first year and $ 15,000 over the next four years for 1,500 journalists.
It is a response to the growing concern that job cuts in the newsroom are leaving communities without access to critical information. The group grew after a hedge fund with a reputation for ruthless cost-cutting acquired Tribune, one of the country’s largest newspaper chains, in May. Already about a quarter of the country’s newspapers have closed, and half of local journalism jobs have evaporated in the past 15 years, according to a study by the University of North Carolina.
As a result, about 1,800 communities were left without a local newspaper.
But the loan, which will cost $ 1.67 billion over the next five years, does create some tension in the industry. Some senior Republicans in Congress ridicule this as a handout. Leading journalists also admit that it is inconvenient to receive financial assistance from the government, which they cover independently.
However, given the crisis the industry is facing, many journalists believe the risk is worth it.
“This is just a reluctant reaction to this fear of a collapse of local news and its business models,” said Stephen Waldman, president and co-founder of Report for America, an organization that directs journalists to local newsrooms, including the Associated Press. “Most journalists start out with a healthy skepticism that the government is interfering and helping journalism. And this is appropriate. “
“But,” he added, “the reason this is happening now is simply the severity of the crisis.”
Direct and indirect government support for the media is not new. This goes back to the earliest days of the country, when Congress subsidized the postage rates of periodicals. Most recently, the pandemic small business loan program lent millions to news organizations.
More than a dozen Republicans in the House of Representatives support the position, although the second-ranked GOP leader, Rep. Steve Scalize from Louisiana, called it a scam in a recent tweet. “Make no mistake – it’s Biden and Dems in Congress helping pay the salaries of the reporters who cover them,” he tweeted.
The fate of the proposal ultimately depends on how Congress deals with broader legislation that has only attracted Democratic support and is mired in divisions in the House and Senate. Significantly, this is one of the few provisions that House and Senate Democrats have already agreed to.
Lawmakers will resume discussions on the bill when they return to Washington next week.
While the proposal’s primary purpose was to bail out smaller newspapers that were hit hard by the evaporation of advertising dollars at the start of the pandemic, it will help some of the larger companies. According to an AP analysis, if tax breaks become law, Gannett, one of the country’s largest remaining newspaper networks, could raise up to $ 127.5 million in five years.
Maribel Perez Wadsworth, head of the Gannett news department, which employs more than 4,000 USA Today journalists and local newspapers such as The Arizona Republic and Detroit Free Press, called this merit “a good shot in the hand.” She did not specify how the money would be used.
AP spokesman Lauren Easton declined to comment on the tax credit.
Rep. Ann Kirkpatrick, Arizona, along with Rep. Dan Newhouse, Washington, introduced the loan into statute last year.
One proponent of the workplace tax credit was the public newspaper network Wick Communications, based in Sierra Vista, Arizona, in the Kirkpatrick constituency. CEO Francis Wick said revenue has roughly halved since 2009 due to a sharp drop in ad sales during the pandemic as local businesses cut ads. To cut costs, the company has consolidated city newspapers into regional headlines, reduced print days and sent journalists on vacation.
The tax break, which will add another $ 2 million to the company in its first year, will help newspapers in the 11-state chain try to move to a digital model with more paid subscribers, rather than focusing on it, Wick said. tough to cut costs.
“We have to make sure that we can ultimately do our job,” Vic said.
The proposal has a key supporter in the form of House Speaker Nancy Pelosi, who has long supported efforts to help local journalism. But the problem took on a more personal character when her hometown newspaper, The Baltimore Sun, was among those acquired by hedge fund Alden Global Capital, despite attempts by journalists and community members to transfer ownership of the newspaper to local residents.
One of those local advocates, former Maryland County Governor Ted Venetulis, called Pelosi after buying Alden to persuade her to support the loan, which by the time of that phone call was already included in Biden’s broader service package.
This will be the last time Venetulis and Pelosi, Calif., Will perform before their deaths in early October, the spokeswoman said in a newspaper obituary and her office confirmed to the AP.
The regulation put in fences to try to keep money from leaking money to guerrilla sites that disguise themselves as local news or fake news operations, while at the same time widely disclosing which organizations are considered legitimate local news outlets, whether or not they are networks. owned by hedge funds, non-profit, print, digital, radio or television.
“It’s not the government that decides who gets it and who doesn’t,” said John Schleiss, president of NewsGuild, a union representing journalists including AP members. “Do you hire local journalists? If so, here’s the tax credit. It is really useful because it targets where we have lost so many journalists over the last decade, and this is at the local level. ”
This is reported by Arbel from New York.