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A proposed new law, called “Supporting Local News,” (HB 22-1121) has changed drastically since it was first introduced in the Colorado Legislature last month. While it got approval from a legislative business committee, it appears that it no longer appears to directly benefit news organizations.

The mural on the wall of the Twitchell Building, on First and F Street is enjoyed by visitors and residents alike. AVV has an office on the building’s second floor. AVV file photo

The fact that it was introduced at all is a testament to the exceeding difficult years experienced by small, local, and regional news organizations statewide; with print media already shifting to digital formats, it was hit with pandemic realities that cut into advertising revenue, and subscriptions and donations to newsgroups declined.

According to the bill’s sponsor, Littleton Democratic Rep. Lisa Cutter, Colorado lost 33 newspapers between 2004 and 2019, and the number of reporters here has declined by nearly half in recent years. She said 81 percent of Coloradans read a local print or digital newspaper each month. She pointed out that 83 percent of newspaper readers are under 65.

The original version of the bill carried a sweeping mandate focused on support of local news: it required all Colorado agencies and departments to spend at least half of their advertising budgets with local news organizations.

Another feature created an income tax credit of up to $250 for individuals who subscribe to local newspapers or donate to local nonprofit news sources.

Since one of the primary directives of local news is to hold government accountable to its citizens, it was an exceedingly brave bill to sponsor, as government is not always as transparent as it could be.

But this week when the bill passed out of a business committee the legislation was more of a “Scrooge” than a “Bill”: Legislators had whittled it down in a process that could be mistaken for the way that hedge-fund owners of news organizations have chopped staff in newsrooms.  Now, the bill may or may not actually benefit small newsrooms.

The current version would offer a 50 percent tax credit for small businesses that advertise with local media, capped at $2,500. So newsrooms may get the revenue, but no tax benefit, even though most of them (us) are small businesses too.

Colorado journalists and small newsrooms, as well as the Colorado Media Project (to which Ark Valley Voice is connected) are mostly choosing to remain positive. According to Corey Hutchins, who writes a weekly behind-the-scenes newsletter on journalism, and listened in the three-hour hearing on the hearings Thursday, there were some interesting legislator comments concerning hedge-fund-owned news organizations versus truly local and independent news organizations:

“We’re looking at hedge funds,” said Democrat Kyle Mullica, who voted for the bill, “and we’re looking at wealthy entities that would be reaping the rewards from this.” (The Denver Post and about a dozen other newspapers in Colorado are financially controlled by a hedge fund, which has gutted its newsrooms. 9News in Denver was recently purchased by private equity firms, and a billionaire owns The Gazette in Colorado Springs and Denver along with Colorado Politics.)

Mullica said he was concerned that this bill intended to help small independent newsrooms, would end up benefiting entities that might not particularly deserve it.

Cutter said it would be hard to exempt some local news organizations from the bill, adding that only about 15 percent of newspapers in Colorado are controlled by hedge funds. She gave no figures for all-digital news organizations.

The legislative panel voted eight to three with two excused and others abstaining, to pass the bill out of the panel.  HB22-1121 will now head to another committee for more debate. Until it is actually sent to the finance committee, which would assign funding, it is an idea waiting for real support.