Congress MIGHT Do Something to Help Small Media Outlets AND Small Businesses

 Originally Published in the Lowell Ledger 10.4.23

HR. 4756 - A Bill To Provide Tax Incentives That Support Local Media

In July of this year Republican Representative Claudia Tenney (NY 22) introduced a bill to provide tax incentives that will support local newspapers with a great one-two punch. The bill was co-sponsored by Democrat Suzan DelBene (WA 1). HR 4756 goes by the name Community News and Small Business Support Act. Since that time the bill is gaining some traction with support from eight more Representatives, four from each party. The bill is designed to support all kinds of local media including local papers, digital media outlets, radio stations and even TV stations. For the purpose of this article, we will only be considering the importance and impact of small town newspapers.

HR 4756 would be a great help to small media outlets
and small business at the same time.

Before we look into the great possibilities of HR 4756, it is imperative to examine the current situation when it comes to small town newspapers in Michigan and around the country. In a word, the situation is dire. For many years big Corporations bought up small newspapers, many if not most of which are published weekly. In the last decade there are estimates that over two thousand or more small papers have been shuttered across the country.

Gannett is the largest newspaper chain in the US. They have been buying up small papers for many years. They follow the typical Corporate model and operate with both eyes firmly focused only on the bottom line with little to no regard for the communities the smaller papers serve. Without a doubt, our increasing desire to get our news on our devices has led to fewer subscribers to local papers. Fewer subscriptions mean fewer advertising dollars and thereby a steady downward spiral happens. When profit is the sole consideration, it becomes easy to trim off a paper that fails to produce not only a profit, but an increase in profit from year to year which is what corporations and their shareholders expect/demand.

It is worth noting that while overseeing a corporation that has closed hundreds of small newspapers in the last few years, the Gannett CEO brought home a pay check of 3.3 million dollars in 2022, which was down from over 7.7 million the year before. There is an eight member Board of Directors at Gannet – all of whom received somewhere between $186,000 to $220,000 per year. This is in sharp contrast to the average salary of $48,000.00 for an employee of Gannett.

Before we examine the attributes of the bill, it is worth taking a moment to realize the importance of small town papers. Want some publicity for your son or granddaughter and their efforts on a sports team or to celebrate them winning the chess invitational? How about a story heralding the success of your church group or favorite non-profit’s fund raising efforts? Want to learn more about the new small business that opened on Main Street? It is a safe bet that one of the online news services is not going to devote any time to those kinds of stories, it is the purview of a small town paper like the one you are reading right now. Producing a weekly paper is an expensive undertaking, this year alone saw a huge spike in the cost of newsprint on which to print it. Rising costs and loss of revenue are why corporations like Gannett choose to just shut down a paper instead of working hard to do what ever it takes to keep it afloat.

On a very positive note, HR4756 would address several issues with one piece of legislation that could actually go a long way in the right direction when it comes to helping out any and all remaining community newspapers. The bill lays out a five-year plant to provide payroll tax credits to local and community news outlets to hire and retain local news reporters. It is our understanding that these tax credits will only be allowed for media outlets with fewer than 750 employees. (So Gannett et al will not benefit from this.) Small businesses, with 50 or less employee, that advertise in local newspapers, digital news sites, on local radio or with local TV station are eligible for tax credits. Another great part of the legislation is that it only applies to local news reporting. It would give great tax incentives to the Ledger to do what we enjoy doing – reporting on the stories that involve and affect our readers.

Eligible newspapers will be allowed up to apply for tax credits of up to $25,000 per local journalist the first year and up to $15,000 per local journalist for four more years. The benefit to small businesses would be a tax credit of up to $5,000 the first year and up to $2,500 for up to four more years. So if a Main Street business spent $2,500 advertising in the Ledger, not only do they get to deduct the advertising expense, but they can also claim the tax credit which would be a wonderful incentive for them. A tax credit has a bigger impact on the bottom line a small business than an advertising expense, and the two of them together would go a long way to helping small businesses compete. This reporter is very encouraged by the fact that this bill defines a small business as having less than 50 employees because many times businesses with as many as 1,500 employees are classified as “small”.

Both of our political parties pay a lot of lip service to small businesses – they like to refer to them as “the backbone of America”. We agree completely and we celebrate this effort that would go a long way to making sure that the backbone is strong and up to the task. Both parties should support HR4756 with no hesitation. Corporations are given tax breaks and incentives that the little mom and pop businesses have no chance of getting. This bill is one for the little folks for sure.

Please contact your Representative in Congress to ask for them
to support this Bill.

What can we all do at this point? Well, if you value the production and  distribution of local news, then take a couple minutes to encourage support from our Representatives. Michigan has thirteen of them. We would suggest a phone call or email to all thirteen of them asking for them to get behind the bill and do what ever they can to see it become law. If you value the small businesses that help make Lowell the cool place that it is, then let our representatives know that you expect them to vote to help keep them afloat.

If you go to https://www.house.gov/representatives you can scroll down to Michigan and you will see all 13 of them listed. If you click on a name, you will be taken to the reps website and a link with information on how to contact them via phone or email. It would be wonderful if everyone reading this would take the time to encourage support for HR4756 from one or more of our representatives.