In the ongoing reconciliation talks on Capitol Hill, one inexpensive but critically important proposal is hanging in the balance and needs an attentive push: providing a payroll tax credit to local news organizations to retain or hire local journalists.
The bipartisan Payroll Tax Credit for Local Journalism was included in the House version of the Build Back Better bill. A few days ago, it was removed — only to be reinserted. This back-and-forth is to be expected, but sustaining local news is something that lawmakers ignore at their peril — and the country’s.
The local news industry is in a deep crisis. As PEN America detailed in our 2019 report, “Losing the News,” the situation is dire: More than 2,100 local outlets have closed since 2004, including more than 70 since the start of the coronavirus pandemic. At least 1,500 U.S. counties retain just one newspaper, disproportionately affecting those in rural and minority communities.
Many of the struggling papers that remain are mere “ghost newspapers,” so gutted they barely cover the community. Three million people, living in one of the 1,800 “news deserts” in the U.S., have been left with no newspaper at all.
Professor Penny Abernathy, the leading authority on news deserts, recently projected that if past patterns continue, more than 100 additional newspapers will close next year, and 500 will shut in the next five years if Congress fails to act. The payroll tax credit is a straightforward, highly impactful step that Congress can take to reverse this slide.
Why now? As our report and subsequent studies delineate, a loss of local news has severe implications for democracy, including a corresponding decline in government accountability, civic engagement, and access to truthful information.
Take government accountability. Less access to local news means more corruption, more waste, and lower bond ratings. Addressing economic development, crime or health care is impossible without information about these issues in one’s community — or about the government’s handling of them.
Civic engagement is also depressed when local news declines. Residents cannot know how to fix their schools, for example, if no one is providing them accurate independent information about how their local tax dollars are being spent. Without that connection to one’s community, understanding wanes, and so too do voting rates. Lawmakers would be wise to take this into account as they reflect on this week’s municipal and gubernatorial elections — which with one notable exception saw record-low turnouts — and prepare for the 2022 midterms.
The decline of local news has fostered division and polarization. The vacuums that have been created have been increasingly filled by misinformation, national cable news, and fake local news sites. The only way to combat misinformation is with trusted, accurate information. Without that, communities lack the data they need to address the issues they face.
This is a thoroughly nonpartisan, bipartisan issue. The payroll tax credit has support on both sides of the aisle — because every town and city suffers when people lack access to accurate information.
Our organization is committed to free expression. We do not take lightly the concept of a role for government in supporting the media. Yet we support this provision because it is constructed to avoid any undue government influence over newsmaking. The provision is a tax credit to all those newsrooms that cover local communities — newsrooms that are essential tethers to daily life. It is content neutral. And it would benefit all different types of media: newspapers, TV stations, websites, and public radio.
Importantly, the tax credit contemplated is not only an immediate need; it is also a temporary measure and a strategic first step. It is a foothold into the building back of an industry vital to our national discourse and our democracy, one that deserves carefully considered, sustainable support. At PEN America, we are advocating for this multi-layered approach, one that would see the proposed tax credit passed with wide support, augmented by a longer-term effort to examine and implement pragmatic, sustainable solutions for the revitalization of the local news industry. Via our research, we concluded that a congressionally established federal advisory committee to study this issue and produce comprehensive recommendations for policymakers is a vital next step — the subject of another bipartisan, bicameral bill proposed this year.
First, we must see lawmakers’ stated support for the local news industry put into action.
The payroll tax credit makes sense. The cost of this tax credit is negligible compared to the rest of the Build Back Better package — less than 0.1 percent of its total. It is a small part of an enormous bill, and might for that reason fall through the cracks. But this provision isn’t just a thing that would be nice to have; it could help save our democracy.
Nadine Farid Johnson is Washington director of the free expression advocacy group PEN America.