New York allocates funds to help local news outlets hire and retain staff

New York is set to offer up to $90 million in tax credits to help news outlets hire and retain journalists, aiming to support the struggling local news industry.

The U.S. newspaper industry has been in decline due to factors such as a shift from print to digital, leading to a significant loss in advertising revenue. In response, New York state lawmakers included a measure in the state budget to provide financial assistance.

The three-year program in New York allows eligible news organizations to access refundable tax credits each year, with a single outlet able to receive up to $320,000 annually.

State Senator Brad Hoylman-Sigal, who sponsored the legislation, emphasized the importance of preserving journalism jobs for the health of democracy. He highlighted the case of George Santos, a Republican whose fabricated life story was not thoroughly investigated by a weakened New York news media until after his election to Congress.

“Some colleagues have dubbed this credit the ‘George Santos Prevention Act’ because many believe that the lack of local press coverage enabled Santos to spin his web of lies undetected,” Hoylman-Sigal explained.

While the program is primarily intended to benefit small community news sites, larger media organizations may also qualify. The tax credits are generally available to news outlets that are not publicly traded, with an exception for certain media businesses that can demonstrate a reduction in circulation.

Hoylman-Sigal is open to revising the legislation to include nonprofit news organizations and digital-only media outlets, which are currently excluded from the program.

“This is the first time in American history that we have created a tax credit structure to support journalism jobs,” said Jon Schleuss, president of the NewsGuild-CWA, a labor union for journalists.

Various states have considered different approaches to support struggling news organizations.

California and New Mexico state governments fund local news fellowship programs. The California Legislature is contemplating a bill that would require tech companies like Google, Facebook, and Microsoft to share a percentage of their advertising revenue with media companies for linking to their content. Recently, Google temporarily removed California news websites from some search results in response.

In Illinois, lawmakers have proposed a journalism scholarship program, a tax credit, and a requirement for news outlets to notify the state of any plans to sell their operations four months in advance. Connecticut and Illinois have also proposed directing state advertising money to local outlets.

Most of these measures have been advancing in Democrat-controlled states. However, Anna Brugmann, director of policy at Rebuild Local News, which advocates for government support for journalism, noted there is interest in red states too, although the cost of these initiatives is a concern.

She pointed out that in Wisconsin, both Republican and Democratic news aid bills were introduced this year.

“We’re certainly looking at red and purple states for the next legislative session,” Brugmann said.

According to a report last year from Northwestern University’s Medill School of Journalism, about 203 counties in the U.S. lack any local news outlets, and nearly half of the counties have only one.

New York’s program, starting in 2025, will allocate tax breaks into two categories: approximately $4 million in credits to help newsrooms hire staff and about $26 million in credits to help with staff retention.

Newsrooms can receive $5,000 in tax credits for each new hire, with a cap at $20,000 for four new positions. They can also get up to $300,000 in tax credits to help retain staff.

“In an era of abundant information, having trained journalists who can ask tough questions and hold officials accountable is critical to our democracy,” said state Senator Jeremy Cooney, who represents parts of the Rochester area in western New York.

State officials clarified that news businesses applying for the tax credit would not be evaluated based on whether government officials approve of their coverage.

Zachary Richner, founder of the Empire State Local News Coalition, expressed hope that the program’s regulations would prioritize tax credits for “the news outlets that need it the most.”

Tom Wiley, publisher at The Buffalo News, said the tax credit would help them invest in frontline journalism.

“We believe the tax credit will help us continue to be the key source for local news in western New York,” Wiley said. “Our work sustains an informed electorate amid an environment of misinformation and falsehoods.”