Source: www.insideradio.com, August 2023
Despite facing even longer odds with Republicans now in control of the House, there is a new effort looking to use a system of tax credits to support local news outlets including radio, television, and newspapers. The Community News and Small Business Support Act (H.R. 4756), introduced by Rep. Claudia Tenney (R-NY) and Suzan DelBene (D-WA) draws key elements from earlier attempts to help bring federal support to struggling news outlets. However, it puts greater emphasis on supporting local businesses that advertise rather than simply providing benefits to media companies.
The bill provides up to $5,000 in tax credits in the first year to restaurants, grocery stores, and other small businesses that advertise in local news – whether it is broadcast, print or on a website – and up to $2,500 in each of the four years after that. To qualify, the local business would have to have 50 or fewer employees with the tax credit covering 80% of their ad spending in the first year. Either commercial or public radio and television stations would be eligible. Online outlets would need to have at least one reporter covering local news.
The bill would also create a refundable payroll tax credit that would offer news organizations up to $25,000 per qualifying employee in the first year and $15,000 in each of the four years after that to retain or hire local reporters. The credit would cover 50% of newsroom employee compensation, up to $50,000, in the first year and 30% of compensation, up to $50,000, in each of the subsequent four years. A local journalist would be defined as someone who works at least 200 hours per quarter for the newsroom.
The bill sunsets after five years, by which time its authors hope local operations are on more solid footing.
“At least 1,800 communities have no local news source, while thousands more have minimal local reporting. Filling this void are voices who often lack a deep understanding of the local communities they’re covering,” Tenney (R-NY) and Suzan DelBene write in a letter to House members. They point out each week, an average of two community newspapers shuts down in the U.S.
Steven Waldman, chair of the Rebuild Local News Coalition, whose members represent more than 3,000 local newsrooms, praised the legislation. While earlier bills focused on just providing tax credits to media outlets, he said the two-pronged approach is “is a conceptual and political breakthrough” that creates a template for how to bring hesitant Republicans onboard the effort to rebuild local news.
“Sometimes when bills broaden their political scope, the substance gets watered down. Not this time,” Waldman said. “The combination of these two policies would have a massive, positive effect on strengthening local news, while also helping restaurants, groceries and other small businesses.”
There are not yet estimates on how much the bill would cost, but in earlier versions of the bill the payroll tax credit for media outlets was estimated to cost $1.67 billion over five years.
Tenney and DelBene have secured bipartisan support for the proposal, with Brian Fitzpatrick (R-PA) and Andrew Carson (D-IN) joining as cosponsors last week.
There is not yet a Senate version of the proposed Community News and Small Business Support Act. But Senator Amy Klobuchar (D-MN) introduced the Journalism Competition and Preservation Act (S. 1094) earlier this year. It would give local media outlets a limited antitrust exemption to strengthen their negotiating hand when dealing with big tech companies. The bill passed out of the Senate Judiciary Committee in June, but its prospects remain uncertain with bipartisan criticism and long odds it will even be taken up in the Republican-controlled House.
Despite JCPA’s uncertain future, the National Association of Broadcasters remains behind the effort. It has not yet taken a position on the Local Journalism Sustainability Act, which has the backing of several dozen newspaper organizations.
