A Colorado Senate bill aims to help connect news outlets and small businesses in hopes of reconnecting a mutually beneficial relationship after the negative impacts of COVID-19.
Earlier this year, the vision came to fruition in the form of Colorado Senate Bill 1121, or the Supporting Local Media Bill, which, if passed, will allow small businesses to receive a tax credit of 50% of the money they spend on advertising in local news outlets, up to a maximum of $2,500 per year, according to the Colorado General Assembly website. The proposed program would go into effect for five years, beginning on January 1, 2023.
On March 21, the Colorado Senate’s House of Finance approved Senate Bill 1121, which now moves on to the House of Appropriations. The House of Appropriations expects to vote on the bill in a meeting later this month, the Colorado General Assembly website states, although the meeting has yet to be scheduled.
The bill’s provisions state that businesses with less than 50 employees are eligible to receive a tax break from advertising in local media.
Local new organizations are defined in the bill as any local newspaper, including online newspapers, and local broadcasters in radio or television. “Local news and broadcasters must primarily serve the needs of Colorado or a local region or community within Colorado, employ at least one journalist who resides in Colorado and who regularly gathers, collects, photographs, writes or reports news or information that concerns local events or other matters of public interest; be covered by media liability insurance and disclose its ownership to the public,” the Colorado Press Association Network’s description of the bill states.
“The idea for the bill was to help local news outlets that have been struggling after the pandemic, to help small businesses get back into advertising in local newspapers, show that it works and help these outlets be more sustainable in the long term,” said CEO of the Colorado Press Association Tim Regan-Porter, who has worked on the bill since its beginnings last year.
Colorado Representative Lisa Cutter, whose professional background is rooted in communications — specifically, in public relations consulting and providing media literacy training — has a healthy appreciation for the field of journalism, she said, and is passionate about fostering strong media communities in Colorado.
Cutter, a sponsor of the bill, worked with Regan-Porter to create it.
“If we don’t have good journalists reporting on our city councils, how will we know what’s going on?” Cutter said. “Journalism is such an integral part of democracy and I just want people to recognize that.”
Although local news outlets would not receive a direct monetary benefit, Cutter’s hope is that small businesses would find out that advertising in local media is effective, she said. If that happened, local news outlets would benefit from an increase in businesses paying for advertising — which ultimately helps the news organization’s bottom line.
“The bill would be meaningful to small businesses, local news and democracy as a whole” Regan-Porter said. “A lot of studies have shown that when local news outlets shrink or disappear, the cost of government borrowing and corruption go up and voting goes down. Maintaining these local outlets, especially in small communities, is really important.”
When Regan-Porter and Cutter began working together on the new bill last year, they looked at several other states’ bills with provisions that were similar to what they wanted to provide for Coloradans — specifically, for small businesses who advertise with local news organizations.
Mostly, they drew inspiration for Colorado Senate Bill 1211 from the Local Journalism Sustainability Act, a bill introduced in the United States Senate in July 2021 that would allow “certain small businesses a tax credit for amounts paid for advertising in a local newspaper or through a broadcast of a radio or television station serving a local community,” according to a description of the bill on Congress.gov. Although this bill wasn’t passed at a federal level, Regan-Porter and Cutter recognized how its provisions would accomplish their goals for a local economy.
One of the concerns about the bill, according to Regan-Porter, stems from journalists who feel uneasy about having the government have any kind of financial stake in their reporting. Mostly, this concern is an issue at the federal level, Regan-Porter said, although even local journalists have struggled with the idea of compromising their independence in this way.
However, “within the (state) process, while there is a bit of governmental entanglement, it’s sort of isolated,” Regan-Porter said. “The government isn’t picking who qualifies (for the bill’s benefits) and there are rules around the bill to make sure (its recipients) are legit.”
Moreover, the bill would benefit local news outlets by connecting them with small businesses and it would benefit small businesses by reducing advertising costs by 50%, according to Regan-Porter.
“Local news outlets can go to the restaurant or the car dealership down the street and say ‘advertising is basically half off now with this tax credit, give advertising in our paper a try,’” Regan-Porter said. “It’ll get new advertisers through the door and really help long term.”
According to Courtney Michelle, owner of CocoMichelle Salon and Spa in Longmont, it can be difficult to decide where to spend the salon’s advertising dollars, and advertising in general can be spendy, she said.
However, “(Senate Bill 1211) would definitely create an incentive for businesses like mine to advertise locally,” the salon owner said. “A 50% tax credit would definitely encourage me to advertise in local news outlets, and I’d like to support those businesses as well.”
