Gov. Gavin Newsom signed AB 2222 into law on Sept. 30. (photo courtesy of California News Publishers Association)

Gov. Gavin Newsom on Sept. 30 signed legislation creating refundable employment tax credits for local news organizations beginning in 2027.

AB 2222, known as the Community NEWS Act, will allow qualifying news outlets to receive $20,000 for each of their first five full-time journalists, $15,000 for each additional full-time journalist and $7,500 for each part-time journalist. An additional $15,000 credit will be available for each qualifying journalist hired into a newly created position.

The five-year program is expected to direct more than $40 million annually toward local journalism jobs in California. Because the credits are refundable, nonprofit and emerging news organizations with little or no tax liability may also qualify.

The program is financed by limiting the state corporate tax deduction for compensation exceeding $1 million paid to certain executives of publicly traded companies. The legislation does not restrict executive pay but reduces the amount corporations may deduct from their California taxable income.

“Gov. Newsom deserves enormous credit for recognizing that strong local journalism is essential infrastructure for a healthy democracy,” California News Publishers Association CEO Chuck Champion said. “AB 2222 makes a smart choice about California’s priorities: Instead of using the tax code to subsidize multimillion-dollar executive compensation, it directs a portion of that revenue toward journalists who inform communities and hold powerful institutions accountable.”

The measure was authored by Assemblymembers Christopher Ward (D-San Diego) and Buffy Wicks (D-Oakland), and supported by a coalition of newspaper publishers, broadcasters, digital outlets, nonprofit news organizations and labor unions.

“This legislation respects editorial independence while confronting the economic reality facing California’s newsrooms,” Champion said. “It supports journalists – not particular viewpoints or coverage decisions. That is a thoughtful, First Amendment-friendly approach, and it establishes California as a national leader in responding to the local-news crisis.”

According to supporters of the legislation, California has lost more than 12,000 journalism jobs since 2002, reducing coverage of local governments, schools, public safety agencies and other civic institutions.

“By signing AB 2222, Gov. Newsom stood up for California’s communities even when doing so meant asking some of the state’s most powerful corporations to give up a lucrative tax deduction,” Champion said. “This is a historic victory for California’s news organizations – and, more importantly, for the millions of Californians who depend on them.”

For information, visit cnpa.com.