ALBANY, N.Y. — New York is offering up to $90 million in tax breaks to news outlets to hire and retain journalists in an effort to prop up the shrinking local news industry.
The U.S. newspaper industry has been in a decline for some time, partly due to a loss of advertising revenue as outlets have shifted from primarily print to primarily digital. That prompted state lawmakers to help pass a measure included in the state budget.
New York's three-year program allows some news organizations to take advantage of refundable tax credits each year, with a single outlet receiving tax breaks of up to $320,000 per year.
Sen. Brad Hoylman-Sigal, a Democrat who sponsored the legislation, said preserving journalism jobs is essential to the health of democracy. As evidence, he cited the inability of the weakened New York news media to investigate the background of George Santos, a Republican who fabricated many details of his life story until after he was elected to Congress.
“Some of my colleagues have dubbed this appropriation the 'George Santos Prevention Act,' as many believe the lack of local press coverage allowed Santos to spin his web of lies unnoticed,” Hoylman-Sigal said.
While small community news sites are intended to benefit, larger media organizations can potentially benefit as well. The tax credits would usually only be available to news outlets that are not publicly traded, although there would be an exception for certain media companies that can show a reduction in circulation.
Hoylman-Sigal said he is open to revisions to expand the legislation to nonprofit news organizations and digital media outlets, which are currently left out of the program.
“This is the first time in American history that we have created a tax credit structure to support journalism jobs,” said Jon Schleuss, president of the NewsGuild-CWA, a union for journalists.
Lawmakers in several states have been weighing different approaches to helping struggling news organizations.
The state governments in California and New Mexico help fund local news grant programs.
The California Legislature is considering a bill that would require tech giants like Google, Facebook and Microsoft to pay media companies a percentage of advertising revenue for linking to their content. Google recently pushed back by temporarily removing California news websites from some people's search results.
In Illinois, lawmakers have proposed a journalism scholarship program, a tax credit and a requirement that news outlets give the state four months' notice of plans to sell their operations. Bills in Connecticut and Illinois would require that some of the money the state spends on advertising go to local outlets.
Most of the measures passed this year occurred in Democratic-controlled states. But Anna Brugmann, policy director at Rebuild Local News, which advocates for government support for journalism, said there is also interest in the idea in red states. The hang-up, she said: the initiatives can be expensive.
She noted that there were both Republican and Democratic news aid bills in Wisconsin this year.
“We are certainly looking at the red and purple states for the next legislative session,” Brugmann said.
About 203 counties in the U.S. have no local news outlets, according to a report last year from Northwestern University's Medill School of Journalism. More than 1,500 – almost half of the provinces – have only one.
New York's program, which would start in 2025, will split the tax breaks into two pots, with about $4 million in credits available to help newsrooms hire staff and about $26 million in credits to help with retention of staff.
Newsrooms could receive $5,000 in tax credits for each new hire, up to a maximum of $20,000, or four new positions. Newsrooms could get up to $300,000 in tax breaks to retain staff.
“In an age when there is so much information, having trained journalists who can ask tough questions and hold elected officials and other public figures accountable is critical to our democracy as a country,” said Sen. Jeremy Cooney, a Democrat who represents parts of the Rochester area of western New York.
News companies that apply for the tax credit would not be judged based on whether government officials like their reporting, state officials said.
Zachary Richner, the founder of Empire State Local News Coalition, said he hopes regulations for the program will be designed to prioritize tax breaks for “the news media that need them most.”
Tom Wiley, publisher at The Buffalo News, said the tax break will help them invest in frontline journalism.
“We believe the tax credit will help us remain the leading source for local news in Western New York,” Wiley said. “Our work is what sustains an informed electorate in our environment of disinformation and untruths.”
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Associated Press writer Geoff Mulvihill in Cherry Hill, New Jersey, contributed to this report.
Maysoon Khan is a staff member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.
