Apr 21, 2024 - Business

Local journalism tax credits included in 2025 N.Y. state budget

Illustration of a rolled up newspaper with rolled up cash inside.

Illustration: Aïda Amer/Axios

In what is being called a "monumental" and "historic" win for local news, New York lawmakers have approved $90 million worth of payroll tax credits to hire local journalists in the state's fiscal year 2025 budget.

Why it matters: It's the largest sum any state has devoted to local news.

  • "Never before have we had this kind of legislation in U.S. history," said Jon Schleuss, president of the NewsGuild-CWA, which represents dozens of local newsrooms. It's "historic" and "monumental," he added.
  • "This is a landmark step," said the Rebuild Local News Coalition, which focuses its journalism reform efforts on local tax credit programs.

Be smart: The first-of-its kind provision could create a blueprint for funding local journalism jobs across the country.

  • Tax credits, unlike government-funded grants, are seen by some as less likely to create a dynamic where a local news outlet feels compromised by government-funded support.

Zoom in: The provision, which was passed over the weekend by the New York State Senate and Assembly, is part of a wider state budget bill that's expected to soon be signed into law by New York Gov. Kathy Hochul.

  • It creates $30 million a year in tax credits annually for three years, with the intention of protecting current journalism jobs and creating new ones.
  • Eligible outlets can receive a refundable tax credit against 50% of the first $50,000 of a journalist's salary. No newsroom can receive can receive more than $300,000.

Between the lines: Broadcast and print newsrooms will receive subsides based on their size. Publicly traded corporations are excluded from eligibility.

  • Outlets with fewer than 100 employees are eligible for up to $13 million of the designated tax credits annually, and outlets with more than 100 employees will also be eligible for up to $13 million credits annually.
  • The remaining $4 million will be allocated to incentivizing all outlets to hiring new journalism positions.
  • "We appreciate that the lawmakers especially made sure that small and medium sized outlets were treated fairly in the plan," the Rebuild Local News Coalition said in a statement.

The big picture: The new bill is part of a broader effort by state governments to fund journalism through various measures, as Axios has noted.

  • D.C. council members last year introduced a first-of-its-kind bill to issue government-funded vouchers to city residents to donate to local journalism outlets of their choice.
  • New Mexico lawmakers passed a bill last spring to allocate $125,000 to expand a local news fellowship and internship program run by the University of New Mexico.
  • California lawmakers last year passed a bill allocating $25 million to a state-funded fellowship program through the UC Berkeley Graduate School of Journalism that supports local reporting in underrepresented areas.
  • New Jersey politicians passed a bill in 2018 to allocate $5 million to an independent "civic information consortium" to support local news.

What to watch: More local governments are taking regulatory action to support local news outlets, amid a lack of progress at the national level.

  • The Journalism Competition and Preservation Act (JCPA), which requires tech firms to negotiate payout terms "in good faith" with news publishers for distributing their content, has been introduced multiple times by bipartisan members of Congress, but has yet to make it to a vote.
  • California has introduced its own measure, the California Journalism Preservation Act, that requires tech firms to pay a tax to the state based on their advertising revenues against news content. That money would be allocated to newsrooms in California.
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