Gov. Gavin Newsom on Wednesday signed what media advocates called the nation’s first state law giving news organizations tax credits for the journalists they employ, an effort to slow the contraction of local news in California.
Under the measure, Assembly Bill 2222, a newsroom can claim $20,000 in tax credits for each of up to five journalists, plus $15,000 for every additional reporter, with no cap, according to CalMatters. Outlets will receive another $15,000 for every new journalist they hire and $7,500 for each part-time employee. Print, broadcast, digital and nonprofit newsrooms qualify if they produce original reporting and meet certain editorial standards.
In signing the bill, Mr. Newsom pointed to the decades-long decline of local news and the rise of misinformation.
“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 news conference.
One in three California newsrooms has disappeared since 2005 as advertisers have fled and, increasingly, AI-generated search results have drawn traffic away from traditional news outlets.
Assemblyman Chris Ward, the San Diego Democrat who wrote the bill, said the money would help outlets keep reporters and, he hoped, hire more. “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,” he said in a statement.
The state has tried to prop up the industry before. Lawmakers approved $25 million in 2023 to create the California Local News Fellowship, which has employed dozens of journalists on two-year contracts. In 2024, California reached an agreement with Google to spend $175 million over five years on local journalism. Much of the initial commitment was never fulfilled: the state and Google contributed just $20 million in the first round of funding, and Mr. Newsom set aside another $20 million in this year’s budget for the company to match.
Those earlier shortfalls, and the state’s tight budget, had left industry leaders doubtful the bill would survive. “I think we were all hoping he would do it, but we were not confident that it’d happen,” said Neil Chase, the chief executive of CalMatters, adding that he was thrilled it did. He called the credits “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.”
CalMatters disclosed that Mr. Chase sat on the board of Local Independent Online News Publishers during the 2024 Google negotiations, and said his views do not necessarily reflect those of the organization.
Media advocacy groups greeted the signing as a national first. “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.