California Local News Bill Becomes Law

California Governor Gavin Newsom signed Assembly Bill 2222, the Community Newsroom Employment and Workforce Sustainability Act, into law on Wednesday, establishing the largest local news bill in the United States. This legislation aims to provide significant financial support to news organizations by offering tax credits directly tied to their employment of journalists. The bill is projected to inject up to $40 million annually into the state's newsrooms, addressing the ongoing challenges faced by local journalism. The tax credit structure is designed to incentivize hiring and retention: newsrooms will receive $20,000 for each of their first five journalists employed, and $15,000 for every additional journalist thereafter. Furthermore, part-time journalists will qualify for $7,500 credits, and there are specific $15,000 credits available for newly hired journalists, encouraging expansion and new talent acquisition. The nonprofit Rebuild Local News was instrumental in sponsoring the bill, advocating for its passage to bolster the sustainability of local news outlets. Matt Pearce, Rebuild Local News's director of policy, explained the direct correlation between staffing levels and financial benefit, stating in August that "If you hire more people, you get more money. If you lay people off, you get less money. If you don’t employ anyone, you don’t get anything." Governor Newsom acknowledged potential criticisms of the bill, particularly its provision of benefits to hedge fund and billionaire-owned newsrooms, some of which he accused of spreading propaganda. He noted that the program is "designed to be broadly inclusive" but expressed concern that it "does subsidize those that don’t need to be subsidized." Newsom highlighted the presence of entities "profiteering in this space by gutting the newsrooms and extracting value" who would also be beneficiaries. Despite these reservations, Newsom opted not to veto the bill, concluding that its overall benefits to local journalism outweigh its liabilities. He expressed hope that the Legislature and the subsequent governor would work to refine the distribution of benefits to more effectively target newsrooms most in need of support, ensuring the funds are used to foster robust local reporting rather than for speculative financial gain. The bill's passage marks a significant state-level effort to counteract the decline of local news coverage, which has been exacerbated by economic pressures and shifts in the media landscape.