A new effort to help save local news, from WA AG Bob Ferguson

Washington Attorney General Bob Ferguson is leading a new effort to help save local news outlets in the state.

Ferguson’s office is drafting a bill that would extend a tax preference for news publishers that expires in July 2023.

“The primary interest from my perspective is the correlation between having a strong local media and preserving our democracy,” he said.

“There are other benefits as well — helping preserve jobs in newsrooms, the economy, there are many reasons,” he added.

Ferguson acknowledged the industry is shrinking and thousands of outlets failed in recent years. But he said that’s not a reason to give up

“We should be doing everything we can, in a responsible way, in a thoughtful way, to help make sure this critical service continues to be provided to people in the state of Washington,” he said.

Ferguson is working with state Rep. Gerry Pollet, D-Seattle, and state Sen. Mark Mullet, D-Issaquah, on a bill they could present in December.

Pollet and Mullet last year proposed extending the break or fully eliminating the tax for publishers. They are now working with Ferguson on a proposal that would reduce the tax to zero and expand the preference to include purely online, professional news outlets.

Washington provides similar tax breaks to all manner of manufacturers, and they routinely sail through the Legislature.

In 2009, the Legislature reduced publishers’ B&O tax from .484% to .2904%, making it comparable to other manufacturers. The rate is currently .35%.

Between 2016 and 2020, the break benefited 164 companies, including 109 newspapers.

The break isn’t huge, totaling around $400,000 per year. But it makes a difference at newspapers struggling to preserve jobs as advertising is siphoned off by tech giants, and high newsprint and gasoline prices consume ever more of their subscription revenue.

Ben Campbell, publisher of The Columbian in Vancouver, told me earlier that the tax preference “could be the difference between profitability and an expense reduction/layoff.”

For the state, this break is pennies under the cushion. Legislators have an expected $65.5 billion in general fund revenues to work with when they start drafting a biennial budget in January.

But because “the media” draws the ire of politicians on the right and left, efforts to extend the tax preference stalled last year.

Mullet said that if legislators don’t extend the tax preference, they will effectively be raising taxes on an essential industry that’s struggling to survive.

Pollet said he pressed colleagues who simultaneously supported a complete B&O tax exemption for the world’s largest producers of frozen French fries.

“I’m looking and saying to our committee members, ‘Where were you about preserving democracy and having our newspapers be able to survive without paying a B&O tax, who really need it, as opposed to privately held corporations with billions of dollars in revenues,’ ” he said.

Ferguson’s support will raise the bill’s profile and should increase support, at least among his fellow Democrats.

Ferguson, Mullet and Pollet each told me they want the bill to be bipartisan.

State Republicans might take inspiration from federal colleagues. The two primary bills in Congress to help sustain local news outlets are strongly bipartisan, with support from prominent Republicans in the House and Senate.

One of them, the Local Journalism Sustainability Act, was originally co-sponsored by Yakima Valley Republican U.S. Rep. Dan Newhouse. Despite his support for “the media,” Newhouse appears to be sailing toward reelection.

I’m surprised more Republicans aren’t leading this charge. The journalism crisis most hurts their strongholds in suburbs and rural areas, which need local outlets to advocate for their communities and balance news emanating from metro areas.

Having local news coverage has also been shown to lower government costs, by reducing corruption and increasing accountability, and it increases civic engagement.

Ferguson saw the value of news coverage on the Metropolitan King County Council, back when The Seattle Times and Post-Intelligencer both had reporters covering the council full-time.

“I was very much aware that there were seasoned, veteran newspaper reporters who were very good at their job who covered the work that I was doing and that my colleagues were doing,” he said. “I think it made me a better elected official, it was good for the policy the King County Council was doing.”

Ferguson fired up talking about the comparison with today’s anemic state press corps.

“That was nine of us at the King County Council, and there were two excellent reporters covering us and spending a lot of their time on it as far as I could tell. Well, the state capitol? Come on, right?” he said. “The Legislature, the House, the Senate, the governor, statewide officials … to say that’s not being adequately covered right now because of the impact on news organizations is a massive understatement.”

When the publisher tax preference was analyzed last year, one critique was that it’s saving an industry that’s dying regardless.

Ferguson, thankfully, isn’t giving up on something that’s so important.

“We as a society can do nothing and news coverage as we know it may go extinct if we do nothing, that’s possible,” he said. “I think that’s a bad outcome … so I don’t simply accept that as some inevitable thing that’s going to happen in our society, I don’t accept that.”

He continued:

“I’m not naive, we all know what’s going on with newspapers, for example, across our country,” he said. “To me that just means it’s time to do something, not to accept some inevitability as a reason to throw up our hands and look the other way.”

This advocacy is outstanding. Washingtonians should let Ferguson and their state representatives know they support the effort to sustain the local news industry.