Biden ‘Build Back Better’ plan includes tax credits for local journalism

The Biden $1.85 trillion “Build Back Better” domestic spending plan includes a provision that will provide a payroll tax credit up to $25,000 the first year and $15,000 the next four years to media companies for hiring journalists who specialize in local news reporting. The Local Journalism Sustainability Act was first introduced last spring with widespread bipartisan sponsorship and support. House Speaker Nancy Pelosi made sure the provision was included with the Build Back Better legislation she was able to pass through the House and send to the Senate.

Since the turn of the century, news media and other traditional outlets for reporting, especially coverage of local issues and events, have been severely curtailed, accompanied by huge layoffs of journalists and support staff, especially those covering local and community news. There just isn’t enough profit in local coverage, and with consolidation of news outlets by large national and even multinational corporations, there is even greater emphasis on profitability at the expense of covering local news and issues, especially those of concern to minority communities and people of color.

The media component of the BBB bill is supposed to address inequities in journalism that have resulted from the takeover of traditionally independent newspapers and other media outlets. A few months ago, the Wall Street vulture fund Alden Capital Group took over the Tribune newspaper chain, making it the second-largest company by circulation. Using heavy debt to finance the takeover, the new ownership immediately began cutting expenses to enhance profitability by eliminating journalists and staff, especially reporters who were covering local news and issues relevant to minority communities.

With a subscriber and advertising base overwhelmingly white, it was easy to cut back on news reporting important to minorities and people of color. Just recently, not content with feeding off the leftovers from the Tribune carcass and spitting out the remnants, Alden has set its sights on another newspaper chain, Lee Enterprises, the third largest newspaper chain by circulation after number one Gannett and number two Alden.

The strategy is simple: Leverage the buyout with more debt and then pay off creditors by firing staff and eliminating less profitable positions. Journalistic responsibilities to the community are sacrificed in the name of maximizing corporate profits.

While the Biden proposal for tax credits has good intentions—to encourage more hiring of journalists and support staff increasing coverage of local news and issues—professional advocates for responsible journalism are concerned that many if not most of the credits will be used up by the very same corporate predators who are the cause for reducing and even eliminating local news reporting.

While reporters and staff currently employed by corporate media welcome the tax credits for hiring more workers, they are also very concerned that the credits will do little more than subsidize increased profitability at the expense of providing significantly greater coverage of local items, especially those relevant to minority communities and people of color. There is a very real risk that corporate-owned media companies will use the credits to hire new employees and at the same time eliminate other positions which are not subsidized.

Strict provisions are needed to ensure that the use of tax credits is not abused. Measures, including regular audits, will be necessary to hold corporate media accountable for how they use these credits. One solution would restrict the amount and number of credits that might be taken by a single company. Media conglomerates like Alden Capital Group should be allowed to use only a very limited number of credits. Smaller newspaper chains, as well as non-profit and cooperative media companies, would be able to benefit proportionately greater from using tax credits.

Advocates for responsible journalism will need to engage proactively with members of Congress and relevant sub-committees to ensure that tax credits are used for the purpose that they are intended. That means insisting on regular audits to make certain that corporate media is not using the credits to hire some journalists while eliminating others, and to make sure that there is a reasonable effort to employ reporters who are representative of minority communities and people of color.

The best way to accomplish this is for activists to support local journalism by promoting alternatives to traditional, corporate-owned media such as non-profit, cooperative, and collectively-owned media outlets. For example, a company in New Jersey which owns 14 community newspapers specializing in local news and events is converting to non-profit ownership.

This is what the Local Journalism Sustainability Act is supposed to facilitate and support. Progressive advocates can advance the cause for responsible journalism by donating to and promoting such efforts. It is also imperative to support those news companies which have extensive union membership and worker participation in management decisions.