Rebuild Local News Presses Connecticut Lawmakers to Incentivize Small‑Business Advertising with Local News

On March 27, Policy Manager Lori Henson testified before Connecticut’s Finance, Revenue, and Bonding Committee in support of HB5569, a tax credit for small businesses that advertise with local news. The tax credit would run for five years, crediting small businesses 80 percent of their local news advertising expenses, up to $5,000 in the first two years, and 50 percent of those expenses up to $2,500 in the latter three years:

Madam Chair Horn, Chair Fonfara, Ranking Members and distinguished members of the Committee –

Thank you for the opportunity to testify in support of HB5569 – a small business advertising tax credit.

My name is Lori Henson and I’m a policy manager with Rebuild Local News, the leading nonpartisan policy coalition representing 3,000 newsrooms and 15,000 journalists. We develop and advocate for public policies to strengthen community news.

I urge you to vote in favor of HB5569, a smart and effective way to support both Connecticut small businesses and essential news coverage in communities all over the state.

While tax relief for small businesses is important for the state’s economy and for the health of those small businesses, this particular tax credit has a double benefit – tax relief for the small businesses that advertise with local news, and an incentive to spend more ad dollars with Connecticut news outlets. In other words, this is not only a tax relief bill, but a buy local bill.

In incentivizing small businesses to advertise locally, this tax credit ultimately supports essential news coverage for Connecticut communities.

Small businesses would qualify when they advertise their products and services with local news outlets. And the local news outlets – many of which are small businesses themselves – turn the ad revenue generated by this tax credit into news coverage of communities in print, online, and on local TV and radio.

This tax credit is needed now more than ever. A study by Rebuild Local News and Muck Rack found that our nation has lost 75% of community journalists since 2002. Connecticut ranks 37th out of 50 states in its number of local journalists; the state lost more than 1800 journalism jobs – a 65% decline – between 2013 and 2023.

Without strong local news, research shows communities face higher borrowing costs, lower voter turnout, fewer choices of candidates on the ballot, more political polarization, government corruption and corporate crime.

This tax credit is not a cure-all for local news, but it is an effective way to keep public dollars – and reliable local news – in Connecticut. Lawmakers in Kansas and New Hampshire have introduced similar bills.

We encourage the Committee to consider amending the bill to include underwriting and sponsorships as “qualified local media advertising expenses” – to clarify that public and nonprofit news outlets are included. We also recommend requiring news outlets to disclose their beneficial ownership or their nonprofit board of directors.

We also have model language – detailed in my written testimony – designed to maximize the tax credit by carrying unused credit forward, and language to guard against fraud by requiring news outlets to certify ad expenses submitted by small business tax payers. We are happy to answer any questions from the committee.

Thank you for your time and support of HB5569.