Screenshot via The New York Post.
Gavin Newsom has on his desk a new bill passed by the state legislature that can only be described as a “news subsidy.” The Community News Act will see that California newsrooms across the state are granted statewide tax credits, aimed specifically at benefitting those news entities.
A lobbying group, Rebuild Local News, is behind this effort and has eagerly reported on this development. The law, if signed, would install refundable employment tax credits to news organizations hiring journalists in California.
This move presents a number of challenges, not the least of which is the prospect of state-run news outlets. How non-partisan will these journalism sources become when they have government payouts as part of their budgets? Fear of angering the money managers will be a concern.
This bill is a smaller scale of a plan proposed in the Joe Biden years. As part of his Build Back Better boondoggle, Biden had pushed a component dubbed the Local Journalism Sustainability Act. In that proposed but never-passed plan, news outlets would have payroll kickbacks of up to 50%, local businesses would get tax breaks for advertising with news outlets, and citizens would be able to write off subscriptions on their taxes.
While we already have a largely compliant news industry with government entities, try to imagine the result of being financially backed by the government. It is easy to see there could be resistance to upsetting certain power brokers when they wield the Paycheck of Damocles over newsrooms.
There is another California-specific employment issue this plan runs into. The state’s Proposition-22, the so-called Gig Economy Law, was a union-inspired plan to target those working for rideshare companies and similar jobs. It also managed to affect the publishing industry, as many freelance reporters and writers were private contractors affected based on their work output.
That law stipulated there would be limits on the amount of work a contract reporter could produce – 35 pieces annually – before they were considered a full-time employee, in need of benefits. I knew of a few in that state who had to take steps to retain their independent status; one even moved to Nevada so they could stay in their position.
It was so bad that at Vox Media, which had energetically backed the plan, the outlet let go a raft of writers across its SB Nation sports portal. Turned out that making these writers full-time employees in a state that had hiked the minimum wage was far too cost-prohibitive for the outlet. That was the same outlet that had touted Prop-22 as a boon for employees, and as a result over 200 lost their jobs.
One outlet turned to an AI bot for the 2024 election. Now we have this state passing legislation, looking to subsidize the very industry that it managed to harshly impact years ago with other legislation. California has come up with a solution for a problem created when the state previously addressed something that was never a problem to start.
There is already an incestuous issue with the news complex and its relationship with the government. Making more of a financial bond is the last thing that should take place with the industry that is charged with holding the government accountable.
Just how ardently will editors go after the entity that is delivering the funds in order to keep the lights on? The tax breaks intended to keep outlets sustainable will also neuter their coverage in the process.
This is an opinion piece. The views expressed in this article are those of just the author.
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