The Government Does Need to Financially Help Local News

This article first appeared in E&P on Sept. 21, 2026.

The announcement last week that the McClatchy newspaper chain was laying off 90 local journalists went from sad news to appalling as the details came in. The Lexington Herald-Leader in Kentucky lost the majority of its reporters. The Idaho Statesman lost half. At the Miami Herald, which lost almost 30 reporters, an editor reported that they would no longer have a city hall reporter in Miami, and asked, “How can you cover Miami without a Miami reporter?”

But a partial antidote is sitting on the desk of California Gov. Gavin Newsom. AB 2222, the Community NEWS Act, would revitalize community media in California and serve as a model for the rest of the country. It provides significant tax credits for news outlets that hire or retain local reporters.

Why should the government be involved? Because the crisis in local news has become catastrophic — and there are types of government help that do preserve the press’ editorial independence.

Since 2002, there’s been roughly a 81 percent drop in the number of local journalists nationwide. In California, more than 40 percent of newspapers have closed since 2005, and the state ranks among the 10 worst for journalists per 100,000 residents.

There’s now overwhelming academic research showing that the loss of local news has devastating effects on communities. When local coverage of the government fades, corruption rises. Police solve fewer violent crimes. Polluters are less likely to be penalized. Governments in “news deserts” pay higher municipal borrowing costs — an estimated $47 million more per year in California and $1.1 billion more per year nationally — because investors expect less efficient government without local news watchdogs. That often gets passed along to residents in higher taxes or worse city services.

News deserts also exacerbate polarization. When local reporting disappears, the information vacuum gets filled by social media, where algorithms reward outrage, and national media, which tends to frame issues through a more partisan lens. The result is a “proximity paradox,” where people get far more information about national affairs than about their own community, including their mayor, curriculum changes at the high school, or plans for a new data center.

For the past decade, there’s been a flowering of new approaches to local news to try to address this crisis. Many legacy media have innovated; hundreds of brilliant startups have sprouted, including nonprofit news outlets. Philanthropy has added hundreds of millions of dollars, too. But it’s not nearly enough; they need help.

Increasingly, we’ve come to understand that local news is a “public good,” much like libraries and schools. Indeed, an independent, free press is one of the only professions name-checked in the U.S. Constitution, a signal of how essential it is for a functioning republic. The value of news does not just accrue to the subscriber who pays for it. Society as a whole benefits when their citizenry can make more informed choices about elections, or when investigative journalism saves lives or money.

At first blush, it might seem counterintuitive for the government to support the very news organizations tasked with holding it accountable. In truth, the United States has subsidized the press since the beginning. In the first Congress, lawmakers set discounted postage rates for newspapers, recognizing that a healthy Republic depends on broad access to reliable information. Other examples of the government subsidizing media directly or indirectly include requirements that public notices be printed in newspapers, FCC rules requiring that cable stations carry local TV, and (until recently) support for public TV.

The key is how it’s done. The postal subsidy was neutral. Federalists and Jeffersonian papers all received support, the amount determined by how far those horses carrying the papers had to gallop, not by the quality or topics of the articles.

That’s why we love AB 2222, the Community NEWS Act, which passed with supermajorities in the California legislature. It provides a refundable tax credit to news organizations that retain or hire local journalists. That’s it. No government official gets to make eligibility judgments based on content. You hire more journalists, you get more money. You lay off your staff, you get less, or nothing. It’s future-friendly, helping TV, print and digital and new models alike.

There are filters against abuse. Outlets funded by political action committees or other dark money political operations are ineligible. They have to employ an actual human journalist in the area to knock out AI-generated websites.

The bill is paid for by tightening a loophole against the deduction of CEO compensation above $1 million. On a meta level, it would likely also pay for itself many times over in terms of savings from government corruption and municipal borrowing costs but that’s harder to prove.

This isn’t the only policy approach. Nine states have adopted First Amendment-friendly policies. Vermont’s Republican governor, Phil Scott, ordered state agencies to prioritize ad spending with Vermont media over Big Tech. In New Mexico, California and Washington, universities are running community news fellowship programs that place journalists into local newsrooms, with government support. An employment credit program like the one on Gov. Newsom’s desk is already working in Illinois, especially for smaller media outlets in rural counties.

These efforts are already helping provide better coverage. In Washington, an InvestigateWest reporter uncovered how a school district failed to adequately respond to repeated allegations of sexual misconduct involving a teacher and students. The reporter was in that newsroom as part of a program managed by Washington State University’s Edward R. Murrow College of Communication, funded by the state. A similar program in California placed a reporter at the Modesto Bee, where she highlighted the plight of a family whose home was severely damaged by a major highway-extension project.

Although the focus is now on Gov. Newsom, it’s critical that this be viewed as a nonpartisan issue. If passed, AB 2222 would support local Fox stations and public radio, as long as they invest in journalists covering their communities. That may irk some who dislike funding outlets they disagree with but it’s the necessary tradeoff for a press independent of government pressure.

More and more, our information comes from huge national conglomerates or artificial intelligence. Our communities would be more informed and civically engaged with more local journalists — living in the community, accountable to their neighbors, and covering the issues closest to home.

Paulette Brown-Hinds is publisher of Black Voice News in Riverside, California, and chair of the Rebuild Local News board of directors. Lenny Mendonca is a former chief economic and business adviser to Gov. Gavin Newsom, founding chair of Coastside News Group, and a Rebuild Local News board member.