Opinion: 6 overlooked reasons California’s Community NEWS Act is ‘a big deal’

The new law offers newsrooms tax credits for retaining and hiring journalists. Its backers hope it can do much more.

California Gov. Gavin Newsom signed the Community NEWS Act on Wednesday, creating refundable tax credits for local news organizations that retain and hire journalists. Steven Waldman, president of Rebuild Local News, which sponsored the legislation, explains why he believes the law could become a model for supporting local journalism nationwide.

In signing AB 2222, the Community NEWS Act, Gov. Gavin Newsom said, “This is a big deal.” He’s right — and not just for the obvious reasons.

Before we get to the more unexpected elements, here are the basics. This is the most ambitious effort to revive community news in the country, probably ever — about $200 million over five years. It provides refundable tax credits to news organizations that hire or retain local journalists: $20,000 for each of the first five local journalists and $15,000 for each one after that, plus an additional $15,000 for new hires.

The incentives are right: Hire more reporters, get a match from the state. Shrink your newsroom, get fewer benefits. We also like that this is content-neutral, meaning eligibility will not be based on government officials making judgments about quality, topics or any other part of the editorial process.

Now here are some of the less obvious reasons why we love this bill (and, full disclosure, Rebuild Local News was the lead external sponsor of the bill and guided the crafting of the legislative language).

It encourages investment in hiring journalists. It is a guaranteed tax benefit rather than a fixed amount of appropriated funds. That makes it different from the employment tax credit laws in Illinois, New York and New Mexico, which each have a finite pool of money.

Why does that matter? Because news organizations, investors or philanthropists can make a decision to invest in growing a newsroom with the certainty that their contribution will be partly matched by the state. It’s the first law that’s well positioned to leverage that kind of additional outside support. If, for example, California’s foundations wanted to create a campaign to eliminate all news deserts, it just got a whole lot more achievable.

It strongly helps small publishers while effectively balancing the needs of legacy outlets and startups, labor and capital, for-profits and nonprofits. We started shopping this employment credit approach in California in January. We then spent the next several months working with legislative staff and all the media groups to refine the language and policy, and with key legislators to find the best champions.

This is a compromise in the best sense: It does not exclude larger companies from benefiting, but it does supersize the benefits for up to five employees, so the average per-person payment for smaller outlets will be larger than for the major players. It does prioritize employment of full-time journalists (as opposed to general support) but adds a benefit for part-time employees, who are so important to smaller organizations. It creates a mechanism for nonprofits to enjoy exactly the same benefits as for-profits. 

While it does not help startups on day one, after a year of existence they’re eligible too. New models that don’t even exist yet can plug into this system quickly if they’re meeting a real need.

It’s why a broad coalition of media advocates embraced this legislation. Labor unions and publishers; legacy and new media; nonprofit and for-profit; print, broadcast and digital. We very much appreciate that all parties looked at this and decided that even if it wasn’t exactly what they would have devised, it’s very good and worth supporting.  

It takes editorial independence very seriously. When Rebuild Local News started, the very first principle we embraced was that any policies must avoid making local newsrooms more vulnerable to pressure from politicians. Part of why we have always liked tax policy is that it doesn’t involve a group of government officials sitting around making subjective judgments about quality. Instead, you fill out a tax form with some basic facts and checkboxes. In addition, the five-year authorization means we don't have to beg the legislature for support every year.

It goes without saying that every newsroom in California should feel 100% empowered to do investigative journalism about local and state governments. The law is designed to support real journalism, including accountability reporting. As Gov. Newsom said in signing the bill, “A free press isn’t supposed to make government comfortable. It’s supposed to make government accountable.”

It guards against pink slime. There are now more fake “pink slime” local news websites than real local newspaper websites, according to NewsGuard. There’s new evidence that sites created by political actors are pumping out content to influence AI agents. On the other hand, we wanted to make this friendly to new players. So we needed to come up with ways of blocking pink slime while allowing startups. It was quite a riddle, but I think we’re off to a good start. Eligible news organizations must be a year old; disclose their ownership; maintain and display a corrections policy; carry media liability insurance; and not be controlled by a political action committee or 501(c)(4). Note how they are all binary measures. The staff at the tax department doesn’t have to assess the quality of your editorial process: It just has to see whether you have one. We think these filters together will do the job, but we’re always open to other ideas. 

It still requires news organizations to innovate and better serve their communities. This doesn't provide any bright new ideas on how to better serve communities. It just enables news organizations to get their noses above water enough to do their magic. Hire that reporter to cover the next county over; add a full-time schools reporter. I’ve been so impressed with the creativity breaking out in the local news world, both legacy and new. That is still essential. If you don’t attract an audience and support from your community, the refundable tax credits won't be enough. We’re hopeful because we’ve seen how much public-spirited energy exists among local news folks in communities.

It is nonpartisan and nonpolitical. I get how some will view this as Democrat-coded policy, passed in deep blue California, signed by someone who’s probably running to be the Democratic nominee for president. First off: Serious props to Gov. Newsom. He and the lawmakers in California (especially Assemblymembers Chris Ward, Buffy Wicks and Sen. Jerry McNerney) are the ones who made the bold, righteous move. We’re genuinely grateful. 

But it’s not a politically slanted policy. The legislature did not opt for an approach that would have given a Democratic governor the ability to reward and punish by giving out grants to individual newsrooms. The law excludes any outlets controlled by PACs or 501(c)(4)s. It includes news outlets that run the gamut of styles and audience makeups. Local TV stations affiliated with Fox or owned by Sinclair will benefit, right alongside local NPR member stations — but only if they are retaining or hiring local journalists. I know this flexibility will irritate some, but we view this as a feature, not a bug. It is really the best way to ensure that laws to help the media do not become partisan or subject to political manipulation.

Really, there’s no reason this particular policy needs to code either Democrat or Republican. The main sponsor of the idea in the U.S. House of Representatives was conservative Republican Claudia Tenney, who voted with President Trump 98% of the time. (Other ideas to help local news have been led by Republicans in New Hampshire, Utah and Vermont.)

Public policy support should focus on one thing — whether they’re doing real local civic journalism, without judgment about ideology. It is why we regularly compare this to the Postal Subsidy of 1792, which provided cheap postage rights for newspapers, whether they supported the Federalists or the Jeffersonians. Hamilton and Jefferson were okay with that. We should be too.