A little-noticed move by Senator Maria Cantwell, D-WA, Senator Ron Wyden, D-OR and five other senators would boost local jobs, speed up sales and improve economies. The Local Journalism Sustainability Act, S. 2434, is designed to help local media support their news gathering missions.
One provision goes far beyond helping community newspapers, local news websites and other news collectors. This would help small businesses out of the economic slump by covering their local media advertising costs, which in turn will help publishers and broadcasters hire journalists.
This provision would allow small businesses to claim a tax credit for a portion of their advertising purchases up to $ 5,000 per year. The credits would remain, but in decreasing amounts, for five years.
The legislation, originally presented in a similar form by Representatives Ann Kirkpatrick, D-AZ, and Dan Newhouse, R-WA, would also help subscribers by offering them a refundable tax credit of up to $ 250 per year. It also provides financial support for hiring, helping news organizations with journalists’ salaries.
The unsung hero of this bill is the advertising tax credit. Like a pebble thrown into the pond of local economies, it will show the ripple effect of benefits in local jobs, increased spending, revenue to run local governments, and a boost to put American small businesses back in. the game after some very difficult years. .
Every dollar in ad spend generates $ 8.77 in sales, according to a 2010 study by IHS Global Insight, a company that periodically measures the impact of advertising on savings. Advertising is directly responsible for about 20% of the US economy by directly generating jobs in media sales, material creation, and collateral work, but it does much more by optimizing the business of other businesses.
No surprise to anyone on Main Street: After the 2008 recession, small businesses cut their advertising campaigns from their normal annual increases of 3-5% to an astonishing 6% drop in 2009. It’s too early to tell. know what the COVID -19 pandemic has done to those spending, but it wouldn’t be a big revelation to learn that the cuts have matched or surpassed those that followed the Great Recession. Spending cuts are what businesses do to stay afloat.
But when they’re ready to get back into the cockpit for another takeoff, the expense must accelerate quickly. However, cash-strapped businesses may not be able to fuel their trip. This is why a little push in the form of the Cantwell tax credit would be so timely. If the economy behaves as usual after
economic downturn, new spending will generate more sales and public coffers will fill up. The benefits of the bill end after five years, but the growth it generates will pay off for decades.
Brett Wesner is president of the National Newspaper Association, a community newspaper organization and president of Wesner Publications, Cordell, OK.