A shortage of local news costs Americans financially — roughly $1.1 billion per year in higher borrowing costs for local governments, according to a new report by Matthew Baker, research director of Rebuild Local News, and Dermot Murphy, a finance professor at the University of Illinois Chicago.
The analysis builds on a landmark 2020 municipal bond market study by Murphy and two co-authors, which found that when local news disappears in places already struggling with weak coverage, municipal borrowing costs rise. Without journalists monitoring local officials, the risk of wasteful spending and corruption increases. Lenders respond by charging higher interest rates, and those added costs ultimately fall to local residents through higher taxes or reduced services.
“Our original study illustrated that the loss of local news leads to a significant increase in borrowing costs for local governments, as lenders are nervous about lending to unmonitored governments,” said Murphy. “This follow-on report shows just how much the nation and each state pays in extra borrowing costs per year due to their news desert footprints. The costs are significant, and taxpayers ultimately foot the bill.”
Comments
No comments on this item Please log in to comment by clicking here