Newsom signs first-in-the-nation law to bolster struggling local news organizations

California’s shrinking news industry just got a major lifeline.

Gov. Gavin Newsom endorsed a novel plan to boost California’s struggling local media landscape, signing a law that will give news organizations tax breaks.

The governor signed a bill Wednesday to give local newsrooms $20,000 in tax credits for up to five journalists and an additional $15,000 for every additional reporter, with no cap. Outlets will also get $15,000 for every new journalist they hire and $7,500 for part-time employees.

Print, broadcast, digital, and nonprofit newsrooms that produce original reporting and meet certain editorial standards qualify for the tax breaks.

Newsom cited local news’ decades-long decline and the rise of misinformation for signing Assembly Bill 2222.

“When you lose local journalism, partisan organizations step in. More division, more anger, more bias that’s expressed. And we’ve seen it here in California,” he said at a press conference.

One in three California newsrooms have disappeared since 2005 as the media industry continues to hollow out due to fleeing advertisers and, increasingly, AI-generated search driving traffic away from traditional and reputable news organizations.

San Diego Assemblymember Chris Ward, a Democrat who authored the bill, said the funding boost will help struggling outlets retain reporters and hopefully hire new ones.

“Local journalism is the backbone of an informed democracy, and today California made clear that the people doing this essential work are worth investing in,” Ward said in a statement.

The state has dropped a lifeline to journalists before. Lawmakers in 2023 approved spending $25 million to create the California Local News Fellowship, a program that has employed dozens of journalists on two-year contracts.

In 2024, an agreement was also made between California and Google to spend $175 million over five years on local journalism. Much of the initial commitments proved lofty and were never fulfilled, as California and Google have contributed just $20 million in the first round of funding. Newsom allocated an additional $20 million in this year's budget for the tech giant to match.

These failed commitments and the state’s tenuous budget constraints left industry leaders uncertain about the bill’s prospects.

“I think we were all hoping he would do it, but we were not confident that it’d happen,” CalMatters CEO Neil Chase said, and that he’s thrilled that it did. “This is one of the models out there that seems like the most efficient way to do it without putting a thumb on the scale about which newsrooms survive.”

Media advocacy organizations lauded the law as a first in the nation.

“This is the largest-ever investment in local journalist jobs by any state and will benefit local news providers of all kinds,” said Matt Pearce, a policy director at the nonprofit group Rebuild Local News.

CalMatters CEO Neil Chase was involved in the 2024 deal as a board member for Local Independent Online News Publishers. His views do not necessarily reflect those of the organization, newsroom or its staff.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.