The state of California has passed a bill that could generate as much as $40 million for California newsrooms each year.
Assembly Bill 2222, known as the Community Newsroom Employment and Workforce Sustainability Act, creates refundable tax credits for the state’s news outlets based on the number of journalists they employ. After passing the State Senate on Sunday night, it passed on the assembly floor with a supermajority of at least 54 votes and will be sent to Gov. Gavin Newsom to be signed into law. The program will be funded by limiting California’s corporate tax deductions for executive compensation above $1 million and redirecting a portion of the revenue to local journalism.
Rebuild Local News, the nonprofit sponsoring the bill, explains the bill:
The Community NEWS Act creates refundable tax credits for employing full-time and part-time journalists and sole-proprietor local news providers. (“Refundable” means that credits in excess of an organization’s tax liability are paid in cash, like a grant.) The job retention credit is worth $20,000 per journalist for up to five positions, plus $15,000 per every additional journalist. Part-time journalist positions would be supported with $7,500 credits. A $15,000 “new hire” credit would be awarded to news organizations that expand journalist headcount, which can be stacked on top of the retention credits.
For example: A nonprofit community news website with three full-time news staffers covering the Central Valley would be eligible for $60,000 a year under this program. If the publication hired one more reporter — or converted a freelancer or part-time staffer into a full-time editorial employee — the publication would earn $95,000 in benefits.
In other words, “if you hire more people, you get more money,” Matt Pearce, Rebuild Local News’s director of policy, said on Monday. “If you lay people off, you get less money. If you don’t employ anyone, you don’t get anything.”
“California has, in recent years, been enacting several policies to support local news outlets — [like] the Berkeley Local News Fellowship program and the Propel Initiative AB 1511, which directs more advertising to community and ethnic media,” Pearce said. “The exciting thing about AB 2222 is that if it’s enacted, it becomes a bedrock for those other policies to multiply their benefits.”
AB 2222 follows the Illinois Local Journalism Sustainability Tax Incentive Program, which was enacted in 2025 to support local journalism in the state. In its first year, Illinois news outlets claimed $4 million in tax credits. New York allocated $90 million of its 2025 budget to local news payroll tax credits. Earlier this year, New Mexico enacted the Local Journalist Employment Tax Credit, through which qualifying news outlets can claim up to 30% of a journalist’s wages in tax credits.
“Policymakers like the journalist employment subsidy partially because it’s very clear, and has a basic sound economic principle behind it: If there’s not enough local news, you can have more of it if you make it cheaper to produce local news by employing journalists,” Pearce told Sophie Culpepper in July. “Simultaneously, it is a policy that can reach across many different types of media outlets and business models in a transparent and broad way.”
