California passes tax credit of up to $40 million a year for newsrooms

California’s lawmakers have passed a bill called the Community Newsroom Employment and Workforce Sustainability Act. It would give news organizations money back from the state for every journalist they employ. The bill, known as AB 2222, now goes to Governor Gavin Newsom. The Senate passed it on the night of August 30. The Assembly agreed to the Senate’s changes the next day, with at least fifty-four votes, according to Nieman Lab.

Assemblymember Christopher Ward of San Diego wrote the bill, and the nonprofit group Rebuild Local News backed it. It offers $20,000 a year for each of an outlet’s first five full-time journalists, $15,000 for every full-time job after that, and $7,500 for part-timers who work at least thirty hours a week. A separate credit of $15,000 goes to each newly created journalism job. Nieman Lab estimates the scheme could be worth up to $40 million a year to newsrooms in California, and it would run for the tax years 2027 to 2032.

To pay for it, the state would copy the federal rule that limits how much of a top executive’s pay above $1 million a company can deduct from its taxes. The extra money collected would fund the credits. Matt Pearce, director of policy at Rebuild Local News, put it simply: “If you hire more people, you get more money.”

Unlike the 2024 Google deal, AB 2222 needs no tech company

California made a deal funded by Google in 2024. This is different. The credit does not depend on a technology company choosing to help, and it is open to commercial firms, nonprofits and one-person businesses alike. It is refundable, which means a small outlet that owes no tax still gets a check. The Rebuild Local News explainer gives an example. A nonprofit with three reporters in the Central Valley would collect $60,000 a year, rising to $95,000 if it hires a fourth journalist.

The rules on who qualifies are meant to keep the money away from political groups and from sites that mass-produce low-quality articles. An outlet must have worked in California for at least twelve months, name its owners or board, hold media liability insurance, publish a policy on how it corrects mistakes, and pay full-time journalists at least $35,000. Organizations controlled by political action committees, or by campaign groups known as 501(c)(4)s, are excluded. Illinois and New York already run similar schemes based on jobs, so California would become the largest state to use the model.

Newsom has about a month to sign or reject AB 2222

Under California’s rules for the end of a session, Newsom has roughly a month to sign the bill or reject it. He has not said what he will do. If it becomes law, the first credits would be claimed against income earned in 2027. Publishers deciding right now whether to fill open reporting jobs therefore have a real reason to wait for his decision.