The Los Angeles Times is reporting that President Trump and the Republican Congress have unintentionally given California state government the financial means to subsidize endangered local news reporting. In a Capitol Journal column, columnist George Skelton said it is now up to Gov. Gavin Newsom to capitalize on the unanticipated gift.
The Times said Newsom can sign or veto legislation to end state tax breaks for large corporations paying top executives $1 million-plus salaries and instead provide tax breaks for struggling California news outlets employing local reporters. It said the legislation would conform California law to a little-known provision of Trump's tax bill that eliminated corporate deductions for executive compensation exceeding $1 million.
The Times said California newsrooms — print, broadcast and digital — would receive an estimated $43 million in tax credits for employees' wages, leaving a net $15 million for a small state revenue boost.
Skelton wrote that he felt squeamish about the proposal, citing a conflict of interest and questioning why taxpayers should subsidize a private enterprise that is flailing in the marketplace. He noted that state government provides tax breaks for many interests, including $750 million annually in tax credits for films produced in California, plus a bill on the governor's desk offering $100 million annually in tax credits for post-production work.
The Times said Newsom also recently provided $3,500 rebates to first-time electric vehicle buyers, which the governor described as investing in the future. Skelton argued that subsidizing local news reporting is investing in democracy, saying robust coverage of city halls, school boards and Sacramento politicians is essential for self-government. He said that journalism is in free fall across America as technology and social media have altered news consumption, often bypassing local communities and spreading misinformation.
The Times said the legislation, AB 2222 by Assemblyman Christopher Ward, a San Diego Democrat, reaches beyond helping the troubled news industry and is about bolstering democracy.