The Washington state Senate Ways and Means Committee held a public hearing Tuesday, March 18, and listened to testimony for and against a proposed bill that would help fund local journalism across the state of Washington.
Senate Bill 5400 would create the Washington Local News Sustainability Program under the state Department of Commerce. The grant program would accept applications from local news publishers and broadcasters in Washington and award grant money to any that are eligible based on the number of hours worked by their staff journalists.
Instead of taking money from the general fund, the program would be funded by a new surcharge tax on social media and search engine platforms operated by for-profit businesses — Facebook and Google, for instance — that made $5 million or more before taxes last year. The tax amount paid per business is capped at $6 million per year.
It would take the form of a 1.22% tax.
If passed by the Legislature, the state Office of Financial Management estimates the tax would bring in more than $24 million by 2027. An additional $102 million would be raised between 2028 and 2031. The grants would be based on the number of journalists employed at each business, with more funding the more journalists there are on staff.
The bill still has to be pushed through the committee process before being considered by the Senate and then survive the same process in the House before arriving at the governor's desk. It’s a long journey for the legislation to make before the end of the session on April 27.
But, since the bill creates a new tax, it is exempt from a deadline that killed a host of bills last week.
The public hearing inspired testimony both for and against the bill.
Karen Keiser, a former Democratic Washington state senator, was one of the first to testify in support of the new bill. Kaiser said that her experience in state government made her aware of shrinking political engagement, which she said was the reason she testified in support of the bill.
“Over the years, I've had time in the Senate and the Legislature to see the reduction in constituent information and constituent engagement, and it’s alarming,” Keiser said. “People just don't know what's going on in their legislatures or their city councils or their school boards. It’s very dangerous for our democracy.”
Others in favor of the proposed legislation were representatives of news organizations and local groups concerned about the survival of local news and its impact on political engagement, voter participation and growing “news deserts,” geographic areas without a dedicated producer of local news.
“The decline in local news has severe impacts on reduced voter participation,” said Dee Anne Finken, a volunteer lobbyist for the League of Women Voters of Washington. “Fewer candidates running for office, higher government costs, less civic engagement, more difficulty conducting public health campaigns.”
Alan Fisco, president and chief financial officer of The Seattle Times, shared his concerns over the increasing production costs of print newspapers due to new tariffs and frustrations with media companies that sell ads on content repackaged from local news media.
“We are now faced with impending tariffs on media and newsprint that many of us are dependent on, as well as tariffs on aluminum, which we use for our printing plates,” Fisco said. “I can assure you that the number of closures will escalate quickly among small newspapers who are particularly vulnerable. The modest surcharge on some tech companies will be a drop in the bucket compared to the billions of dollars that they have made over the years using our content.”
Testimony from Rose Feliciano, executive director at TechNet, a national network of tech companies, countered Fisco’s point, arguing that the news media benefits from distribution by search engines and social media, but pays nothing to the platforms for the service.
“TechNet believes this bill is based on a false premise that a handful of social media companies and search engines are responsible for causing and solving the financial problems of local news journalism,” Feliciano said. “News businesses voluntarily share content on social media to expand their audiences and help grow their brand and bylines free of charge.”
The Association of Washington Business also testified against the bill, citing a concern over the new surcharge and a lack of oversight over the grant program.
“In a different budget cycle, in a different year, we would typically be here in support of a grant program that helps businesses … with the caveat that we would ask that that program be funded like other grant programs are out of the general fund and not through a new tax surcharge,” Emily Wittman, government affairs director for the Association of Washington Business, said. “This is one of several tax surcharges for the tech industry that's being considered for new revenue this year.”
Sen. Marko Liias, D-Mukilteo, is the bill’s sponsor.
