November 2, 2021

A plan to offer federal payroll tax credits to help pay the salaries of local journalists is still in play as budget bills advance — but it faces a giant hurdle.

When I last wrote about it three weeks ago, the measure, the Local Journalism Sustainability Act, was included in the House draft of a $3.5 trillion spending bill. Advocates hoped that the Senate would quickly follow suit. Optimism was running high.

That quick resolution didn’t happen, of course, and the target total from the Biden administration has been cut in half to a $1.75 trillion Build Back Better bill.

Looking for savings, the House late last week dropped the assistance as part of hammering out a new draft version to send to the Senate.

The proposed aid to local news, potentially costing around $1 billion, would have been tiny compared to big ticket items like clean energy and child care.

Even with bipartisan support and 78 co-sponsors, however, it fell in the category of a lesser priority when crunch time came for budget drafting.

That leaves the Senate, where the bill was late getting sponsors and has not passed, as the best hope for having the aid restored as a budget is finalized over the next several weeks.

The payroll tax credit under consideration would have paid half the salary of local journalists earning up to $50,000 for one year after passage and 30% for four subsequent years.

Journalists from newspapers, local broadcast outlets and digital startups would all have qualified.

That money would provide big and timely help after advertising declines during the pandemic, which worsened already shaky finances for newspapers and some digital startups.

Plus its passage would be a precedent, breaking through the American tradition of First Amendment concerns that government and journalism enterprises should be kept entirely separate. (Subsidies for news are common elsewhere in the world).

Danielle Coffey, executive vice president and general counsel for the News Media Alliance, has been lobbying for the bill and told me about one troublesome detail that emerged as consideration advanced.

One option to bring the price tag down would be to cap the amount any given chain ownership group could receive. How to do that? The working framework was to limit the payroll tax credit payout to the salaries of 1,500 local journalists total for a company.

I checked with Gannett Tuesday to see about possible impact. The company, with 250 local dailies and USA Today, employs 4,000 journalists (not all of them local), spokesperson Lark-Marie Anton emailed me.

So along with large broadcast chains like Sinclair and Nexstar, Gannett would hit that limit. The company remains supportive of the legislation. Maribel Perez Wadsworth, president of the USA Today Network and publisher of USA Today, commented, “We are heartened by strong bipartisan support (of the act) and urge lawmakers to move swiftly to pass it. The legislation encourages support for local journalism … (and passage would) send a clear signal that thriving local journalism makes our communities stronger. We could not agree more.”

Advocates have amped up their arguments in a final push to get approval for the aid. Jim Friedlich, CEO and executive director of the nonprofit Lenfest Institute for Journalism, wrote an op-ed in Sunday’s Philadelphia Inquirer, entitled “A federal lifeline for local news.”

Steven Waldman, co-founder and president of Report for America, emailed me Monday, “To be pointed about it, the next week or two will decide the fate of local news. The Senate is now considering whether to include the payroll tax credit in Build Back Better. A lot rides on what they decide. The proposal amounts to about 0.1% of the total, a small investment to help save democracy.

“Part of what we’re going to see in the next week is whether the senators who have been saying how much they care about a free and strong press will actually take this minimal action.”

My take matches Waldman’s. Letting the provision die would constitute a big missed opportunity. It would also mark legislators as vaguely cheering on local news from the sidelines rather than doing something.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
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  • This legislation is a bad idea. The article strongly suggests that the news industry cannot survive without government help. Not true. Like any business, we need to work hard, know our target audience, innovate, build trust and earn that support.
    If we need the government to survive, we then become dependent on it, which is a terrible business model. We need a good product to survive, or we deserve to go out of business because we’re bad business owners.