A plan to offer federal payroll tax credits to help pay the salaries of local journalists is still in play as budget bills move forward – but it faces a giant hurdle.
The last time I wrote about this three weeks ago, the measure, the Local Journalism Sustainability Act, was included in the House’s $ 3.5 trillion spending bill. Lawyers hoped the Senate would follow suit quickly. Optimism was there.
That swift resolution didn’t happen, of course, and the Biden administration’s target total was cut in half to a $ 1.75 trillion Build Back Better bill.
In search of savings, the House at the end of last week abandoned the aid as part of the development of a new draft version to be sent to the Senate.
The aid offered to local news, potentially costing around $ 1 billion, would have been minimal compared to big-ticket items like clean energy and child care.
Even with bipartisan support and 78 co-sponsors, however, it fell into the lower priority category when the critical moment came for budget writing.
That leaves the Senate, where the bill was slow in securing sponsors and was not passed, as the best hope of restoring aid as a budget is finalized in the coming weeks.
The salary tax credit under consideration would have paid half the salaries of local journalists earning up to $ 50,000 for one year after the move and 30% for the next four years.
Journalists from newspapers, local broadcasters and digital startups would all have qualified.
This money would provide important and timely assistance after the advertising decline during the pandemic, which has exacerbated the already fragile finances of newspapers and some digital startups.
Moreover, its passage would set a precedent, shattering the American tradition of the First Amendment that government and journalistic businesses should be entirely separate. (News grants are common elsewhere in the world).
Danielle Coffey, Executive Vice President and General Counsel for the News Media Alliance, lobbied for the bill and told me about an embarrassing detail that emerged as the review progressed.
One option to bring the price down would be to cap the amount that any given group of channel owners could receive. How do you do that? The framework was to limit the payroll tax credit payment to the salaries of 1,500 local journalists in total for a company.
I checked with Gannett on Tuesday to see the possible impact. The company, with 250 local dailies and USA Today, employs 4,000 journalists (not all local), spokesperson Lark-Marie Anton wrote to me.
So with the big broadcast chains like Sinclair and Nexstar, Gannett would hit that limit. The company remains in favor of the legislation. Maribel Perez Wadsworth, president of USA Today Network and editor of USA Today, commented, âWe are encouraged by the strong bipartisan support (for the law) and urge lawmakers to act quickly to pass it. The legislation encourages support for local journalismâ¦ (and its passage would send) a clear signal that flourishing local journalism makes our communities stronger. We couldn’t agree more.
Advocates have stepped up their arguments in a final attempt to gain approval for the aid. Jim Friedlich, CEO and Executive Director of the nonprofit Lenfest Institute for Journalism, wrote an op-ed in Sunday’s Philadelphia Inquirer, titled “A Federal Lifeline for Local News”.
Steven Waldman, co-founder and president of Report for America, emailed me Monday: The Senate is now considering including the Payroll Tax Credit in Build Back Better. A lot of things depend on what they decide. The proposal represents about 0.1% of the total, a small investment to help save democracy.
“Part of what we’ll see next week is whether the senators who have said how much they care about a free and strong press will actually take this minimal step.”
My point of view matches that of Waldman. Letting the supply die would be a great missed opportunity. It would also mark lawmakers as vaguely encouraging local news on the sidelines rather than doing anything.