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SACRAMENTO — On Thursday, the California state Senate passed SB 1327, which would impose a “data extraction mitigation fee” on major tech platforms to help subsidize local journalism. The revenue this fee would generate, estimated to be roughly $500 million, would provide outlets with an employment tax credit to cover a portion of employees’ wages. It would also support UC Berkeley’s California Local News Fellowship program, creating an important path to sustainability for a vital initiative in the state.

The bill would spur the hiring and retention of journalists at a time when newsroom job losses are reaching crisis levels. In addition, the legislation would provide support to pay freelancers, a category of workers that smaller and ethnic media publications rely on. SB 1327's passage in the state Senate is a testament to the tireless efforts led by local journalists, community publishers, public-interest groups, labor unions and grassroots advocates in California.

Free Press Action has long supported a tax on advertising revenue as a means to support the sort of local journalism that serves communities and has been decimated by the changing economics of news production. Sen. Steve Glazer’s legislation offers a similarly promising funding approach. For it to reach its full potential, the legislation must ensure that support is directed to outlets most in need, especially those community publishers, nonprofit newsrooms and ethnic-media outlets that serve populations that traditional media have long neglected.

Now that the legislation has gained much-needed momentum, Free Press Action is calling on lawmakers to amend SB 1327 so that the bill can best serve California residents and effectively support local news. This includes placing a revenue or profit cap on the firms eligible to receive funding from SB 1327, including those sizable outlets that are based out of state or that record large profits. Without this cap, the lion’s share of funding from the fee would go to large commercial outlets like ABC, CBS, Fox, NBC and Sinclair, leaving less for the small publishers, ethnic media and community-rooted outlets that are most in need of support.

Alex Frandsen, Free Press Action’s journalism campaign manager, said:

“We’re immensely grateful to Senator Glazer and the bill’s other sponsors who’ve carried this important legislation this far. The passage of SB 1327 in the Senate is a direct result of tireless efforts led by local journalists, community publishers, public-interest groups, labor unions and grassroots advocates in California.

“This bill has immense potential to bolster local news at a time when California desperately needs bold action. Since 2004, the state has lost 25 percent of its newspapers, total news circulation has dropped more than 50 percent, and many ethnic media outlets and nonprofit newsrooms have had to scratch and claw for financial survival.

“With two-thirds of the Senate voting to pass the bill, lawmakers are showing us that right now SB 1327 is the state’s best path forward to support local news and help meet the information needs of people across the state.

“But there’s more work to do to ensure that ethnic media, nonprofit newsrooms, small publishers and community-based outlets are prioritized over media giants. As SB 1327 moves to the Assembly, we urge lawmakers to place a revenue or profit cap on the firms eligible to receive funding from the bill. As currently written, a significant portion of the revenues this bill would generate would pad the pockets of profitable corporate broadcasters. These companies already are doing just fine financially; a cap would help guarantee that as much money as possible benefits the community-rooted outlets that are most adept at providing impactful and locally focused public-interest journalism across the state.

“Local journalism that helps people understand what’s happening in their communities and holds the powerful accountable is a public good. And right now, it’s abundantly clear that our prevailing commercial media system isn’t producing enough of this public good. Public policy to ensure our communities have the news and information they need to participate in our democracy is more critical than ever. To correct this failure, legislative solutions must focus on the local independent, ethnic and nonprofit newsrooms that put the people they serve above profits.”

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