California Governor Gavin Newsom signed into law on Wednesday Assembly Bill 2222, a measure designed to provide financial support to local news organizations throughout the state. The legislation, known as the Community Newsroom Employment and Workforce Sustainability Act, offers refundable tax credits to news outlets based on the number of journalists they employ. The bill aims to address the significant decline in local journalism, which has seen thousands of positions lost in California and across the United States over the past two decades.

Under the new law, news organizations can receive a $20,000 tax credit for each journalist employed, up to five positions, with credits of $15,000 for each additional journalist afterward. Part-time employees qualify for half-credits. The legislation also includes incentives for hiring new reporters, adding an extra $15,000 tax credit per new hire. Supporters estimate the program could provide roughly $200 million to California newsrooms over the next five years.

The bill’s passage reflects growing concern about the erosion of local news coverage, amid rising reliance on social media as a primary source of information and the spread of misinformation. Governor Newsom emphasized the crucial role local journalists play in holding power to account, citing investigative work that uncovered significant local government salary abuses. He underscored the importance of protecting journalism as a pillar of democracy.

However, the bill has faced criticism from some business and taxpayer groups, who expressed worries about its financial impact. To fund the tax credits, the legislation aligns with a component of a federal tax law that eliminated certain corporate executive pay deductions, effectively raising state tax revenue. Critics argue this increases costs for employers, which could be passed on to consumers, and oppose the bill’s lack of a cap on total tax credits, warning of potentially unlimited fiscal exposure for the state.

Newsom acknowledged concerns about subsidizing news outlets owned by hedge funds or wealthy individuals who have been accused of profiting by cutting newsroom staff. He pointed out that while the law may benefit such entities, he decided to sign the bill because its overall benefits to journalism outweigh its drawbacks. The governor expressed a desire for future efforts to better target aid to outlets with the greatest need.

Supporters, including the California News Publishers Association and nonprofit groups advocating to rebuild local news, hailed the legislation as a groundbreaking step. They argue it could serve as a national model to stabilize and grow local journalism amid ongoing economic challenges. Some backers, however, dispute proposals to restrict eligibility based on ownership, emphasizing that the focus should remain on protecting reporters and editorial independence.

Assemblymember Christopher M. Ward, the bill’s author, called the measure a historic investment in local news, reinforcing California’s commitment to an informed public and a robust democratic process. The law is part of broader efforts nationwide to find sustainable solutions for shrinking local news ecosystems.