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New York is the first state to give local news outlets a tax credit for hiring journalists to cover community news. The legislation should be a model for other states looking to fund news outlets facing increasingly dire financial prospects. Subway Newsstand; New York, NY by John Blandino is licensed under CC BY-NC-ND 2.0.

Journalists’ First Amendment rights seem to be constantly under threat in the United States these days, whether it’s police arresting or attacking reporters or government officials digging into their sources and editorial decisions. But one of the most alarming threats to freedom of the press today has nothing to do with the First Amendment.

The abysmal financial state of the news media industry is just as worrying as violations of reporters’ legal rights. After all, freedom of the press only really matters if there are reporters left to use it. But mass layoffs of journalists and shuttering of news organizations have led some to ask whether journalism is headed toward an “extinction-level event.”

Thankfully, policymakers are waking up to this threat to press freedom. Some are even finding creative ways to help fund local news media. Lawmakers around the country should take note.

New York law could be a model for the country

Last week, New York became the first state to give news outlets a tax break for hiring or employing journalists, after a coalition of local news organizations championed new legislation. The financial support can’t come soon enough; between 2004 to 2019, 40% of New York newspapers were shuttered.

As part of the state budget, eligible news outlets in New York could receive up to $300,000 in refundable tax credits for employees’ salaries. The legislation also splits the available tax credits between larger media outlets and those with 100 employees or fewer, ensuring that smaller news outlets have a chance to benefit.

Some parts of the New York law will be fleshed out by later regulation. For example, regulators will have to decide whether digital-only news outlets focused on the state can qualify for the tax credit. Given the important role online news sources play in informing the public, regulators should allow them to qualify.

But a law that encourages news organizations to hire more reporters can only be a good thing for journalists and for those who rely on local reporting. As Steven Waldman, the president of Rebuild Local News, a coalition of journalism organizations that supported the New York legislation, said, “An employment credit places the incentives in the right place: hiring of local reporters.”

Other content-neutral ways to fund local journalism also hold promise

The tax credit idea isn’t new. Several states have introduced similar bills to the one that just passed in New York. The federal Community News and Small Business Support Act, introduced in this Congress, would not only give a payroll tax credit to local news outlets that employ reporters in their communities but also provide tax credits to small businesses that advertise in local media.

Other jurisdictions are also experimenting with additional ways to fund local news. Lawmakers in California and New Mexico have provided additional funding for fellowships run by journalism schools in their states. An executive order in Chicago directed the city to spend at least half of its advertising budget in community news outlets, modeled on a policy already in place in New York. In Washington, D.C., City Council members introduced a bill that would give residents a “voucher” they could donate to local news outlets of residents’ choice.

While the details of these laws or bills differ, one essential feature of all of them is that they’re content-neutral. In other words, they don’t allow the government to use funding to put a thumb on the scale of news coverage. That neutrality is necessary to protect the independence of local media. Community news serves an essential role as a watchdog of local government. It must be insulated from threats that funding provided by tax credits or other government-involved methods could be slashed or withdrawn as punishment for publishing news that powerful people dislike.

According to Northwestern’s Medill School of Journalism, one-third of the U.S. newspapers in operation in 2005 will be gone by the end of this year. The silencing of so many journalists is a press freedom emergency, and we need lawmakers to act now. The Community News and Small Business Support Act, for example, was introduced in July 2023 but hasn’t been advanced in the House since.

Thankfully, we have plenty of models for how governments at the state and local levels can help shore up funding for local news in ways that maintain journalistic independence. Other states must follow New York’s lead and help fund local news.

Editor’s note: Freedom of the Press Foundation (FPF) is based in New York and operates the U.S. Press Freedom Tracker as a news site. FPF is evaluating whether the Tracker meets eligibility requirements for the New York tax credit discussed in this post.

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