SACRAMENTO\u00a0\u2014\u00a0President Trump and the Republican Congress have unintentionally provided California state government with the financial means to subsidize \u2014 help save \u2014 endangered local news reporting.<\/p>\n
Now it\u2019s up to Gov. Gavin Newsom to capitalize on the unanticipated gift.<\/p>\n
He can sign or veto legislation to end state tax breaks for large corporations paying top executives $1 million-plus salaries and, instead, provide tax breaks for struggling California news outlets<\/a> employing local reporters.<\/p>\n The state legislation would conform California law to a little-known provision of Trump\u2019s \u201cBig Beautiful\u201d tax bill that eliminated corporate deductions for execs\u2019 compensation exceeding $1 million.<\/p>\n California newsrooms \u2014 print, broadcast, digital \u2014 would receive an estimated $43 million in tax credits for employees\u2019 wages<\/a>. There\u2019d still be a net $15 million left over for a small state revenue boost.<\/p>\n You’re reading the L.A. Times Politics newsletter <\/p>\n Expert columnists cover the insights, legislation, players and politics you need to know. <\/p>\n By continuing, you agree to our Terms of Service<\/a>, which include arbitration and a class action waiver. You agree that we and our third-party vendors may collect and use your information, including through cookies, pixels and similar technologies, for the purposes set forth in our Privacy Policy<\/a> such as personalizing your experience and ads. <\/p>\n I\u2019ll admit to feeling a bit squeamish about this.<\/p>\n First, it\u2019s a conflict of interest, arguing that a governor \u2014 whom my colleagues and I write about often \u2014 should shovel public dollars into our profession.<\/p>\n Second, why should state government and taxpayers be asked to subsidize a private enterprise that\u2019s flailing in the marketplace? Especially one that prides itself in being an impartial watchdog over government actions and politicians\u2019 behavior. The dog shouldn\u2019t be begging for food from the critters it watches.<\/p>\n Well, one answer is that state government provides tax breaks for lots of interests, including Hollywood movie studios. We\u2019re allotting $750 million annually in tax credits for films produced in California.<\/a> <\/p>\n And there\u2019s a bill on the governor\u2019s desk to offer $100 million annually in tax credits for post-production work<\/a>, such as editing, sound mixing and visual effects.<\/p>\n That\u2019s all fine. What would California have become without a healthy Hollywood? I don\u2019t want to imagine.<\/p>\n Newsom also recently provided $3,500 rebates to first-time electric vehicle buyers, benefiting Tesla and other EV makers. It was \u201cinvesting in our future,\u201d the governor explained.<\/a> <\/p>\n OK, but subsidizing local news reporting is investing in democracy. Robust coverage of city halls, school boards, Sacramento politicians and the like is essential for self-government.<\/p>\n And that journalism is in free fall all across America as exploding technology and social media opportunism have altered news consumption, mostly bypassing local communities and often spewing misinformation. <\/p>\n So this legislation, AB 2222 by Assemblyman Christopher Ward (D-San Diego), reaches far beyond just helping the troubled news industry. It\u2019s about more than providing media outlets with financial incentives to retain and hire local reporters. It\u2019s bolstering democracy.<\/p>\n Independent journalism is a pillar of democracy, providing citizens with reliable, fact-based information about how their elected representatives are performing their duties, fulfilling their campaign promises and cozying up to special interests.<\/p>\n You\u2019re not going to glean that information from the politicians. You\u2019re going to get mostly self-serving spin \u2014 government propaganda \u2014 whether it emanates from the White House, the state Capitol or the local mosquito abatement district.<\/p>\n That\u2019s why the nation\u2019s Founders protected press freedom in the Constitution\u2019s 1st Amendment.<\/p>\n Thomas Jefferson famously wrote: \u201cWere it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.\u201d<\/p>\n Of course, that was early in Jefferson\u2019s political career, before he became vice president and later president. He ultimately turned into a harsh press critic. For example: \u201cNothing can now be believed which is seen in a newspaper. Truth itself becomes suspicious by being put into that polluted vehicle.\u201d<\/p>\n Jefferson, like countless politicians ever since, apparently carried a huge chip on his shoulder because of reporting on his job performance that ticked him off.<\/p>\n Newsom is a master at attracting friendly national news coverage, especially on cable TV. But he naturally shudders at more critical coverage by Sacramento beat reporters.<\/p>\n As of this writing, the governor hadn\u2019t publicly disclosed how he feels about the local reporter tax credit bill.<\/p>\n His finance department, which crafts the state budget, opposed the measure when legislators were considering it. The state would \u201cnot [be] receiving any incremental economic benefit to justify the expenditure,\u201d its analysis read.<\/p>\n Again, even if that were true, citizens and democracy would benefit.<\/p>\n Also, the analysis contended, the tax credit would likely \u201cprovide windfall benefits\u201d for news media owners \u201crather than encourage new hiring activity.\u201d<\/p>\n That\u2019s not quite accurate. Anyway, it could discourage layoffs and save reporters\u2019 jobs.<\/p>\n Late last week, the McClatchy newspaper chain \u2014 owner of the Sacramento Bee and several medium-sized California papers, plus dozens across America \u2014 announced massive newsroom layoffs.<\/a> <\/p>\n Since 2002, more than 12,000 local journalism jobs have been lost in California, according to the bill\u2019s sponsor, the advocacy group Rebuild Local News. More than 3,500 newspapers have closed nationwide.<\/p>\n Many communities have become \u201cnews deserts.\u201d<\/p>\n When that happens, fewer citizens turn out to vote, tax money gets spent more carelessly and political corruption increases.<\/p>\n Under the legislation, California media outlets \u2014 big and small \u2014 would be granted modest tax credits for each employee covering state and local news. There\u2019d be $20,000 for up to five full-time positions and $15,000 for each of the rest. On top of that, there\u2019d be an additional $15,000 for every new full-time job that\u2019s created. Part-timers would be entitled to $7,500.<\/p>\n \u201cNational news outlets would be excluded. So would partisan \u2018pink slime\u2019 sites controlled by political action committees,\u201d says Matt Pearce, policy director for Rebuild Local News, a former Los Angeles Times reporter and newspaper guild leader.<\/p>\n It would be the most ambitious program of its kind in the country. New York, Illinois and New Mexico currently offer local news subsidies.<\/p>\n \u201cIt\u2019s about civic infrastructure and the foundation of democracy. We\u2019re teetering toward autocracy,\u201d says former state Sen. Steve Glazer (D-Orinda), an ex-mayor who has long pushed for stronger local news coverage.<\/p>\n This bill won\u2019t save local newsrooms. But it may give them breathing room while the big thinkers try to concoct a more profitable business model for democracy\u2019s watchdog.<\/p>\n What else you should be reading<\/p>\n The must-read: Architect of billionaire tax tried to \u2018extort\u2019 support for the measure and targeted women, union reports find<\/a> Until next week,
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