Waste of the Day: New York Approves Tax Breaks For Journalists
Topline: New York State recently approved $90 million in tax credits to support local journalism, adding to the $8 billion the state already spends annually on business-specific tax breaks and grants.
Key facts: The Local Journalism Sustainability Act is the first of its kind in the U.S. and will split money evenly between large media outlets and small ones with fewer than 100 employees.
The tax credits will cost up to $30 million annually for three years starting in 2025. Eligible news outlets can receive a 50 percent refundable credit for the first $50,000 of a journalist’s salary, up to a total of $300,000 per outlet.
They can earn an extra $5,000 for each new full-time position they create.
New York’s budget this year is $224 billion, higher than any state except California. Next year it will increase to $237 billion.
The tax credits will help preserve the struggling local journalism industry, but they also present obvious ethical questions. Can a news outlet remain objective when receiving handouts from the government?
In 2021, the New York Post’s editorial board said a similar proposed program at the federal level would “neuter” the free press.
Supporters of the law say journalistic integrity won’t be compromised because the state is giving tax credits, not direct grants.
Background: New York’s program is so far the largest journalism initiative being discussed around the country. Since 2017, 10 states have introduced 24 bills designed to protect local journalism.
In September 2022, California gave UC Berkeley $25 million for a fellowship program that supported reporting in underserved communities. It was the largest public investment in local journalism at the time.
California’s proposed Journalism Preservation Act would take things further by requiring digital publishers like Google and Facebook to pay a tax for carrying news content, which would then be redistributed back to news outlets.
New Jersey and New Mexico have also used public funds to support local journalists in recent years, though on a much smaller scale.
Summary: Local journalism is indeed vital for our Democracy, but programs that threaten the independence of newsrooms might not be the right way to save the industry.
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