Report from The Well News
In Brief – California lawmakers have passed a bill creating a refundable tax credit for local news organizations to hire and retain journalists. Assembly Bill 2222, the Community Newsroom Employment and Workforce Sustainability Act, establishes a five-year program beginning in 2027 to encourage print, digital and broadcast outlets to expand their staffs by paying qualified media enterprises $20,000 for each of their first five full-time journalists, $15,000 for each additional full-time hire, and $7,500 for each part-time employee. The program would be funded by limiting corporate tax deductions for executive compensation above $1 million. Corporate eligibility requirements include ownership disclosure, liability insurance and a published corrections policy, while PACs and 501(c)(4) organizations are excluded.
Context – Media companies have been pressuring their governments for nearly a decade to force Google and Meta to pay them when their content appears on the platforms. Australia and France were first movers, deploying schemes to transfer millions of dollars from the platforms to their media companies. In 2023, with Canada and the California legislature jumping into the fray, Meta and Google went separate ways. When Canada enacted legislation, Google complied and started writing checks while Meta refused to join the regime and instead blocked news on their platforms in the country. The companies brought this policy divergence to the debate in California, with Google in line to pay while Meta was prepared to block news content. In 2024, Google reached an agreement with California legislators and Governor Newsome to contribute $55 million to a five-year $125 million News Transformation Fund in exchange for dropping legislative efforts. The other $70 million would come from state coffers. But by 2026, state, and then Google, funding fell through. The latest bill appears to be the end of plans to tax a few platforms and instead creates a new general corporate levy. Australia, on the other hand, responded to Meta’s plan to stop payments and block news by enacting a new tax on large social media and search platforms that don’t pay media directly.