Lawmakers consider tax break for news publishers, state-sponsored journalism scholarships

[May 17, 2024]  By ALEX ABBEDUTO
& ANDREW ADAMS
Capitol News Illinois
[e-mail]

SPRINGFIELD – A new measure being debated in the Illinois General Assembly would create a tax credit for certain news publishers based on the number of reporters they employ.

The proposal from Sen. Steve Stadelman, D-Rockford, is part of a package of policies that he has been working to pass since early this year – although some worry about potential conflicts that could arise from creating new financial relationships between the government and journalists who cover it.

Under Stadelman’s proposal, contained in Senate Bill 3953, the state would offer a tax credit of up to $25,000 for each journalist on a media company’s payroll and up to $30,000 for journalists hired into newly created roles. The credit would only be available to “independently owned” media outlets – making subsidiaries of larger or publicly traded companies ineligible for the credit.

Advocates say it's a way to prop up an industry that faces existential financial and logistical challenges. In 2022, the General Assembly created a task force to research the state of journalism in Illinois. Their report included research from Northwestern University’s Medill School of Journalism that showed one-third of local outlets have closed since 2005, creating an 86 percent decline in newspaper jobs over that span.

The likelihood of the bill passing this spring is unclear, as lawmakers face the final sprint to the end of session. The bill was heard in a subject matter hearing, so no vote was taken, but it could be introduced as an amendment to a larger bill – a maneuver that lawmakers often employ in the lead-up to their May adjournment.

Stadelman said on Thursday he hopes to include the tax credit in the General Assembly's broader budget package.

The proposal for more state involvement in the media industry has made some of those who work in both fields uneasy.

Dan Haley, a self-described “old newspaper guy” and the long-time publisher of several community newspapers in Chicago’s western suburbs, said he was initially surprised by the idea. Despite that, he supported the pitch Wednesday evening.

“I believe that local news needs investment from state government if we are to fulfill our part of the American bargain – to report fairly with context, some empathy and some grit about what goes on in our towns,” Haley told lawmakers.

On the state side of the equation, some share the concern about the government and media becoming too intertwined. Sen. Rob Martwick, D-Chicago, who said he sees the value of a “robust, independent Fourth Estate,” wondered if subsidizing the industry would weaken that independence.

“What happens when we are giving tax credits to publications that both report on what's going on and publish opinions?” Martwick asked in Wednesday’s committee hearing. “We give it, we can taketh away. What if we don't like the opinions that are being published by the certain newspapers?”

Stadelman countered that the state was providing a “foundational tax break,” adding, “we’re not telling them what to report.”

Sen. Steve Stadelman, D-Rockford, is pictured in a file photo from 2023. (Capitol News Illinois photo by Jerry Nowicki)

Many news outlets currently receive federal funding through the Corporation for Public Broadcasting, notably NPR, PBS and the two media giants’ many affiliate stations – but that usually makes up a small portion of these groups’ budgets.

At the state level, the Illinois Arts Council, a state agency, regularly gives grants to public broadcast stations like WSIU, WILL, WTTW and others – but they must meet Corporation for Public Broadcasting standards in order to qualify. Earlier this year, Stadelman proposed giving the Council $5 million specifically for public broadcasters.

A separate measure, also proposed by Stadelman, would direct funding toward future journalists by creating a state-sponsored scholarship program and require certain disclosures if local media is sold, with the intent to keep media ownership local.

Senate Bill 3592, would allow the Illinois Student Assistance Commission to grant scholarships to journalism students planning to work in Illinois for at least two years after they graduate. The measure would be subject to appropriations, meaning if it passes, funding would have to be provided in the state budget for it to become effective.

The measure would also require a news publisher, if it’s being bought, to disclose details of the sale to its employees, the Department of Commerce and Economic Opportunity, its county government, and any Illinois nonprofit “in the business of buying local news organizations” 120 days’ notice of a potential sale.

The state’s journalism task force specifically highlighted the experience of the Southern Illinoisan newspaper. After Lee Enterprises sold the paper to Paxton Media Group in 2023, PMG laid off the paper’s unionized staff.

The House Labor and Commerce Committee advanced the measure after adding an amendment that would begin the scholarship program in 2025-2026 instead of 2024-2025. Although there was no debate, the bill passed along party lines 19-10.

Because it has been amended since originally passing the Senate, it still needs approval from both chambers before it can head to the governor for a signature.

Earlier this year, Stadelman introduced Senate Bill 3591, which would require large online platforms to share advertising revenue with journalism outlets whose work is hosted on those platforms.

Stadelman on Thursday said that he viewed that proposal as “more of a longer-term play,” although he hoped to possibly move it through a committee before the end of this legislative session.

Editor’s note: Two members of the Local Journalism Task Force – Sam Fisher and Jason Piscia – are also members of the Illinois Press Foundation board. The Press Foundation operates Capitol News Illinois and provides it funding.  

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.