Gavin Newsom Signs Law Providing Tax Credits for Local News

Governor Gavin Newsom signed Assembly Bill 2222, the Community Newsroom Employment and Workforce Sustainability Act, on Wednesday to provide financial support to struggling local news organizations. The law establishes refundable tax credits starting in 2027, offering $20,000 per journalist for the first five positions and $15,000 for each additional journalist, with an additional $15,000 credit for each new hire. The program is expected to provide roughly $55 million annually over five years.

To fund the initiative, the state will eliminate corporate tax deductions for executive compensation exceeding $1 million. Qualifying digital, broadcast, and print organizations must maintain editorial standards, though those controlled by political or social-welfare entities are excluded. Additionally, the state is implementing the California Civic Media Fund, a $20 million annual program co-funded by Google to support small newsrooms.

Newsom framed the legislation as a contrast to the federal government's approach to the press, specifically citing Donald Trump's funding cuts to PBS and NPR. While the California News Publishers Association and Rebuild Local News supported the bill, the California Chamber of Commerce and the California Taxpayers Association opposed it due to the funding mechanism and potential tax increases. Newsom acknowledged the bill might inadvertently subsidize hedge funds and billionaire owners but argued that the benefits to democracy outweigh these liabilities.