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The Legislature passed a bill to establish tax credits for local news organizations Monday, sending the measure to Newsom’s desk.
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Assembly Bill 2222, also called the Community Newsroom Employment and Workforce Sustainability Act, would credit “operators of local news outlets” with refundable tax cuts for each journalist they employ.
Assemblymember Christopher Ward, D-San Diego, said in an April 13 Assembly committee hearing that he authored the bill as a “targeted response to the ongoing collapse of local journalism.”
“Across California, newsrooms are shrinking, reporters are being laid off and too many communities are becoming news deserts,” Ward said. “When local news disappears, we see declines in civic engagement, voter participation and government accountability.”
The measure would provide for tax credits totaling $20,000 per journalist for up to five positions, plus $15,000 for each additional journalist. Each part-time journalist would accrue a credit of $7,500. The legislation would also reward local newsrooms for expanding their staffs, crediting $15,000 for each new hire.
The state’s fiscal estimates show that the bill would generate in revenue for local newsrooms. According to Matt Pearce, the director of policy for Rebuild Local News, the funding would buoy a faltering local news environment — California has been among the bottom 10 U.S. states in journalists per capita in recent years. Rebuild Local News is a co-sponsor of the bill.
“AB 2222 — because it’s a five-year program, because it’s substantial — creates a more attractive economic environment for more investment in local news,” Pearce said. “What we’d really hope for is a flywheel effect from this policy to not just stabilize local news production, output and employment, but to actually create jobs and expand the amount and quality of local news that’s available.”
The California Chamber of Commerce, California Business Roundtable, California Taxpayers Association and other business-oriented advocacy groups have registered their opposition to the bill.
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In a written letter of opposition to the bill, CalTax argued that it would unfairly burden publicly traded companies with new taxes, which are then transferred to consumers. Support for local journalism should come from a direct appropriation rather than a corporate tax increase, the letter argues.
“Financing an industry-specific tax credit with a tax increase on an unrelated group of taxpayers is an unsound way to budget,” the letter said. “It ties an ongoing program to a narrow and volatile revenue source that fluctuates with executive compensation decisions, and bypasses the scrutiny that would accompany a direct appropriation.”
However, supporters of the bill say the bill would conform California law with federal tax code, which removed tax deductibility for executive compensation above $1 million. According to Pearce, this shifts the burden of the proposed tax credits to high-paid executives rather than taxpayers at large.
“AB 2222 is effectively a bill that says we’re going to shift the tax code so it’s a little bit less generous for extremely high-paid CEOs and more conducive to supporting local news production in particular,” Pearce said.
The measure passed by a 29-10 vote in the Senate Sunday and a 54-14 vote in the Assembly Monday.
This story was originally published September 1, 2026 at 12:07 AM with the headline “To buoy local journalism, Legislature passes bill to create newsroom tax credits.”
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