California’s new attempt to help struggling newsrooms faces key test
A new plan by California lawmakers to help fund the state’s struggling journalism organizations could advance in the coming days but faces an uncertain future.
Assembly Bill 2222 would create refundable tax credits for California local news organizations based on the number of journalists they employ, which in practice would provide direct cash infusions to participating newsrooms.
The bill, introduced by Assemblymember Christopher M. Ward (D-San Diego) earlier this year, is the latest effort to provide a lifeline for the news industry. There has been much talk both in California and globally about government support for journalism. But this is potentially the largest relief plan to date, with the state tax board estimating it would make more than $40 million available to newsrooms annually. The bill passed the Assembly and needs approval from the Senate to reach the governor’s desk.
Publishers, journalists and their unions have long argued that online search and social media platforms are harming the journalism business by eating up advertising revenue while publishing content they don’t pay for.
Previous attempts by California lawmakers focused on forcing Google, Meta and other platforms to pay their share, but this proposal has a unique solution to funding the program.
Ward described the bill as an important step in keeping a strong press corps in California, which he said is more important than ever in an era of digital misinformation.
Ward said the bill would “strengthen democracy” and “keep the lights on” in newsrooms. He cited President Trump’s own attacks on the press. “We thought, ‘What more can California do to help support them?’” he said.
Trump’s efforts to strip public radio and television stations of federal funds and the steep downward profit-losing trend for commercial newsrooms has meant, Ward said, that newsrooms have severely scaled back operations. Rural areas in particular have altogether lost their news sources, with many forced to shut down.
The amount of advertising to local newspapers declined by 82% — a $40 billion drop — since 2000, Pew Research Center said in 2023. And almost 40% of all local U.S. newspapers have vanished, according to an annual report on the state of local news put out by Northwestern University’s Medill journalism school.
A report last year by data firm Muck Rack and Rebuild Local News, a nonprofit advocating for government help for the journalism sector that is sponsoring AB 2222, estimates there has been a 75% decline in the number of local journalists per 100,000 of population in the U.S. since 2002.
The law, if approved, would work by assigning a “job retention credit” of $20,000 per journalist for up to five positions, and after that $15,000 for every additional journalist. Part-time positions would be awarded half-credits. It also stacks an additional $15,000 credit for each new hire, to incentivize expanding journalist headcounts.
To pay for the credits, the bill would amend California’s tax code to align with a little-discussed component of Trump’s “Big Beautiful” tax bill that expanded taxes on some companies by eliminating a deduction for executive salaries of over $1 million annually.
It is common practice for the state to consider aligning its tax code with the federal structure to make filing taxes easier and administering them more cheaply. But California has not yet sought to adopt this federal tax expansion.
As a tax measure, AB 2222 requires approval from a supermajority two-thirds of the Legislature, no easy task in an election year and with a fast-approaching deadline for lawmakers to approve bills Monday, which marks the end of this year’s legislative session.
The California Taxpayers Assn. and groups representing business interests such as the California Chamber of Commerce oppose the bill because it raises taxes on employers that they argue already face billions of dollars in new taxes. They contend that the higher costs will be passed along to consumers, and they also take issue with funneling a new funding source to a niche industry without going through the budget process.
“Financing an industry-specific tax credit with a tax increase on an unrelated group of taxpayers is an unsound way to budget,” the taxpayers association wrote in its letter of opposition.
Republican lawmaker Carl DeMaio of San Diego has vocalized his opposition in discussions of the bill, criticizing the idea of providing funding to outlets that make political endorsements. DeMaio did not provide a response to a request for comment about his current position on the proposal.
The bill’s backers are hopeful it will wriggle through this legislative session and land on the governor’s desk.
Yet they are not sure whether Newsom will sign it. In the past, Newsom has been reluctant to greenlight laws that tinker with the state budget after those fiscal discussions conclude in the first half of the calendar year.
The governor’s finance office issued an analysis opposing the bill for not including a cap on the tax credits, thus creating “unlimited fiscal liability to the state,” and argued the bill mainly subsidizes existing activity rather than encouraging the creation of new jobs.
An analysis by the state’s Franchise Tax Board — the agency that levies personal and corporate income taxes — found that the funding stream would bring $29 million in new revenue to the state’s general fund in the 2026-27 year and $58 million the following year.
Meanwhile, the estimated amount of the tax credit for local news organizations would be $19 million the first year and $43 million the second year. After accounting for the tax credits as well as the administrative costs, the budget would still see a net increase of $10 million and $15 million in those years.
“It’s fully paid for,” said former state senator Steven Glazer, who is a passionate proponent of the bill. Glazer during his Senate term pushed similar legislation that was ultimately shelved in a deal with tech giants.
In recent years California lawmakers have also weighed tax credits for Hollywood jobs. In June, lawmakers approved a major expansion of the funding allocated each year to the state’s film and television tax credit program, moving to raise that cap to $750 million from $330 million. The legislature is also considering a bill that would provide some $100 million in annual funding to post-production work.
The newsroom bill is designed specifically so as to be as neutral as possible on the medium — whether print newspapers, digital news sites, ethnic media or television broadcasters — as well as the business model of the newsroom — whether for-profit, nonprofit or publicly subsidized. The point is to prevent the government from having strong influence or being able to pick winners and losers in the industry, said Matt Pearce, a director of policy for bill sponsor Rebuild Local News, which successfully backed similar legislation in Illinois.
“You have practically the whole range of the local news world represented in some form. Big, little, independent,” Pearce said.
Pearce formerly worked as a reporter at The Times, and served as president of Media Guild of the West, the union that represents Times journalists.
The bill is also supported by the California News Publishers Assn., of which the Los Angeles Times is a member.
