The Illinois legislature has approved measures that provide $25 million in tax credits over the next five years for local news organizations to hire and retain journalists, becoming the second large state in two months to try to bolster the ailing local news industry with tax incentives.
In the wee hours of Wednesday morning, the Illinois House gave final passage to two other components of a larger package designed to address the local news crisis. One provision deems that a local news organization can’t be sold to an out-of-state company without 120 days’ advance notice. And aseparate measure creates a scholarship program for students who choose to work at an Illinois local news organization for at least two yearsafter graduation.
In April, New York passed a tax incentive plan for local news outlets totaling $30 million a year over three years.
Anna Brugmann, policy director for the nonprofit Rebuild Local News, praised the passage of the Illinois tax incentives, the scholarship program and the 120-day waiting period on an out-of-state sale.
“Those three things combined, you’re going after some pretty significant solutions to a pretty wide variety of challenges facing local news in Illinois,” Brugmann said. “They’re putting the employment tax credit on the record, and they’re only the second state to do that,” she said.
The Illinois tax credit numbers are lower, but Brugmann said that “it’s much easier to expand a program than to start a program.”
State Sen. Steve Stadelman, a Democrat who chaired the bipartisan Illinois Local Journalism Task Force, said in an interview Wednesday that he was “pleasantly surprised” to get these measures passed, even as others wound up on the cutting-room floor for now.
“It was a tight budget year for Illinois, which always makes it difficult to pass legislation,” Stadelman said. “Was it as much as I wanted? No. But it showed that there’s a commitment by the State of Illinois to local journalism, and that’s significant.”
The tax incentives to local journalism organizations total $5 million a year for five years: $4 million for an employment credit and $1 million for a new hire credit. An outlet may receive a maximum of $15,000 per employee and $10,000 for new hires.The credits are capped at $150,000 per newsroom and $250,000 per corporation.
The total numbers are less than the more than $8 million a year that Stadelman had sought, but he said the key now is to show that the concept works and then to build on it. “I would love to have more, but it’s important to pass something legislatively to show there’s a commitment by the state and to increase awareness.”
According to data from the Medill State of Local News Project at Northwestern University, Illinois has lost more newspaper journalists, 85 percent, than any state in the nation over nearly two decades. The state also has lost 36 percent of its newspapers, among the 10 highest losses in the U.S. Illinois has four counties that are news deserts with no source of local news, and 33 counties are down to one news source.
Nationally, the U.S. has lost nearly one-third of its newspapers since 2005, according to Medill’s data. There are 203 news desert counties, and 1,558 with only one news source.
Also included in Stadelman’s original Strengthening Community Media Act was a call for state agencies to spend at least half of their advertising money with local news organizations. That provision didn’t make the cut, with Stadelman and others close to the process noting that state agencies, which sometimes work with outside ad agencies, pushed back against the idea of having to report all of theirspending.
“I think that would have been a tremendous piece of legislation that would have gone a long way to helping out local media,” said Sam Fisher, former Illinois Press Association president and CEO who served on the Illinois Local Journalism Task Force. “That’s one of the things we can work on.”
The legislature also didn’t pass the Journalism Preservation Act, which would have required Big Tech companies such as Google and Meta to compensate news organizations for the content that they share, display or link to on their platforms. Stadelman said although that measure passed out of the Senate’s Executive Committee last week, he opted to take “a-wait-and-see approach” given pending legislation in California, where the tech giants are based.
“I didn’t want to cause more problems by passing something in Illinois that may differ from or may influence what’s happening in California,” Stadelman said.
Still, what did pass has the potential to move several needles.
Current Illinois Press Association President/CEO Don Craven said the legislation represents “nothing but good news for local newspapersandlocal broadcasters to be able to take advantage of this tax credit for hiring bright, young journalists. I think getting anything passed is a victory. The devil will be in the details as this gets rolled out with the tax folks, but hopefully this will be a way to infuse some new sparks into local journalism.”
Task force member Tim Franklin, director of the Medill Local News Initiative and the John M. Mutz Chair in Local News at Northwestern, hailed the legislation as vital for improving local news and civic engagement.
“Our research shows that Illinois has been the hardest hit state in the nation in loss of newspaper journalists,”Franklin said. “This legislation is a tangible step toward stemming those losses and putting journalists’ feet-on-the-street covering local issues in communities across the state. This is not just a win for journalism; it’s a win for residents who need reliable, trustworthy news and information to make informed decisions and be civically engaged.”
He also called the legislation “significant because it shows momentum is beginning to build at the state level to bolster local news. This action by the Illinois legislature could spur other states, or Congress, to step up to help local news.”
Gov. J.B. Pritzker, who created the Illinois Local Journalism Task Force in August 2021 and has been supportive of its efforts, is expected to sign the legislation.
Brugmann is eager for more to come. “I certainly hope this isn’t the only swing at this,” she said. “One policy can solve one or two problems, but we face many problems in local news.”
Said Fisher: “It was a win this session, and we’ve got some work to do next session. I’m hopeful.”
Article image by Annie Spratt used under Unsplash license (Unsplash)
