Governor Gavin Newsom signed Assembly Bill 2222 on September 30, creating new refundable tax credits designed to support newsrooms across California. This legislation, known as the Community Newsroom Employment and Workforce Sustainability Act, aims to help local news outlets hire and retain journalists, with its provisions becoming effective on January 1, 2027, and set to expire on January 1, 2032.
The bill offers specific financial incentives to qualifying news outlets. For each of their first five full-time journalists, newsrooms can receive a $20,000 tax credit. For each full-time journalist beyond that initial five, a $15,000 credit is available. Additionally, a $7,500 credit is provided for each journalist employed on a part-time basis. The legislation also includes a $15,000 credit for each full-time journalist hired for a new journalism position. This five-year window is intended to help prop up local news, encourage growth, and strengthen a sector of the industry that residents overwhelmingly affirm is important.
The core goal of this act is to incentivize newsrooms to both hire and retain journalists. This measure is designed to uplift local news outlets that are struggling and to strengthen those, like San Jose Source, that have become sustainable. By supporting newsrooms, the bill aims to enable reporters to dig deeper into their beats, which in turn keeps residents informed about developments at City Hall before decisions are finalized. This process is expected to spark civic engagement and inspire local action. Furthermore, a robust local news presence can uplift and encourage marginalized voices to speak out by ensuring their stories are told.
This action by the governor comes amidst a significant nationwide decline in local journalism. Over the last two decades, more than 3,500 local newspapers have either closed or merged across the U.S., representing approximately 40% of all local newspapers, according to a report by Northwestern University’s Medill journalism school. This trend has resulted in over 50 million people living in areas where access to local news is either severely limited or entirely absent.
Locally, the erosion of news coverage began with the sale of the Silicon Valley Community Newspapers (SVCN) in 2005 to the Mercury News. SVCN had covered a mix of eight cities and communities, including five South Bay cities and three San Jose neighborhoods. A few years later, the original product was absorbed and dissolved by the Bay Area News Group. This event was described as “just the tip of the iceberg,” marking the beginning of the end for one-third of all newspapers in California over the subsequent decades, mirroring a broader national trend.
The disappearance of each local paper represented a missing link in holding power to account. Crucial elements such as political transparency, civic engagement, and attention to challenges in marginalized communities were lost as these outlets vanished.
From this landscape emerged a new model: nonprofit local journalism. This independent approach, beholden to no external interests such as hedge funds or private equity firms, sought to fill the void left by closures. Many initially doubted its viability, as its survival depended on donors, grants, and philanthropy.
However, communities began to embrace these new media upstarts, with each story plugging a hole in local coverage. Reporters in these nonprofit newsrooms started highlighting political issues, reporting on government transparency, detailing education and wage disparities in marginalized neighborhoods, and covering small businesses' interactions with local officials for operating permits. This model helped bring local newsrooms back, enabling reporters to uncover information and affect change at the grassroots level.
Governor Newsom’s signature on Assembly Bill 2222 reaffirms that unbiased, fact-based nonprofit local news is a cornerstone of democracy, acknowledging its value and strengthening its purpose, needed now more than ever.