California’s Journalism Law Leaves Important Work for Philanthropy

California’s new journalism law gives philanthropy an opportunity to help public investment reach community news outlets that might otherwise miss out. 

It’s a step toward stabilizing parts of the state’s ecosystem, but other areas still need to be shored up, and that’s where funders can take the lead. 

On Sept. 30, Gov. Gavin Newsom signed AB 2222, the Community NEWS Act. Beginning with the 2027 tax year, qualifying outlets can receive refundable employment tax credits. Eligible organizations, including nonprofit newsrooms, can get money back even when they owe little or no income tax. 

The law’s goal is to “provide financial relief to local news media outlets that are struggling to maintain or grow local journalist employment.” 

That’s a worthwhile goal. Keeping a reporter working can mean continued coverage of a school board, housing conditions, or decisions affecting an immigrant community. 

But journalism jobs do not automatically ensure that communities get the civic news and information they need. 

The law offers $20,000 for each of the first five eligible full-time journalists an outlet retains, $15,000 for each additional one, and $7,500 for eligible part-time journalists. It also offers $15,000 for net new full-time journalism positions, subject to the program’s rules. 

Small newsrooms receive a higher credit per full-time position. Eligible sole proprietors can qualify. Freelancers hired as independent contractors do not count toward an outlet’s credit. 

For funders, the access problem deserves attention: publishers need resources before they can receive support. 

Full-time qualification requires at least 30 hours of work weekly for more than 26 weeks, at an annual pay rate—or qualifying owner income—of at least $35,000. Part-time qualification requires at least 20 but fewer than 30 hours weekly for more than 26 weeks, at an annual pay rate of at least $25,000. 

Consider a founder who reports, edits, sells advertising, and answers community questions, then pays herself whatever remains. Her community may depend on her work. Her income may still fall below the threshold. 

Then there is the wait. Rebuild Local News, which lobbied for the law, expects many first payments in 2028 for employment in 2027. Publishers must sustain payroll until that money

arrives. For some independent publishers, that may be too late. A future refund cannot keep a newsroom open today. 

Outlets also need media liability insurance throughout the tax year, public ownership or board information, a public corrections policy, and at least 12 months of California organization or registration before the tax year begins. These requirements take administrative capacity and, in some cases, money. 

The insurance requirement deserves particular attention. It offers important protection, but requiring publishers to buy coverage before accessing public support can create a financial barrier. In that sense, I worry it could function like a modern-day poll tax: publishers have to pay to participate. 

Think about someone who has built a hyperlocal Facebook page or YouTube channel with a strong, loyal audience. That publisher may be delivering useful local news without media liability insurance or the administrative support of a traditional newsroom. Audience trust alone will not make the outlet eligible. 

Many small publishers may fall outside the program’s requirements. That is where philanthropy can put more attention—and resources—into the community providers being left behind. 

My concern is that outlets with stronger finances and administrative support will be better positioned to benefit, while trusted community providers struggle to reach the same help. 

Founders of color and outlets serving immigrant communities can qualify. But the law sets aside no funding specifically for them and gives them no priority. Corporate-owned outlets can benefit, including those owned by hedge funds and billionaires—a concern Newsom acknowledged. 

Philanthropy can help close these gaps. 

Start by asking community publishers what stands between them and eligibility. Flexible grants could help pay founders fairly, maintain payroll while they await refunds, cover insurance, and secure accounting support. Any plan built around a future refund should first confirm eligibility, timing, and the hiring-credit rules. 

But helping publishers qualify should be only part of the response. Keep funding the work that falls outside the program. An outlet relying on freelancers, a founder earning below the threshold, or a community news provider publishing through Facebook or YouTube may still be meeting essential information needs. Failing to qualify does not make that work less valuable. 

And resist treating a possible tax credit as a reason to reduce a grant. Used together, philanthropic and public funding could help an outlet build stability and expand its service to residents.

Funders should also ask who actually benefits. Are founders of color receiving support? Are immigrant communities gaining useful coverage in the languages they speak? Are residents finding trusted answers to the questions affecting their lives? 

The law’s required reporting tracks recipients and credit dollars. Understanding its community impact will require looking further. 

I welcome California’s investment. Philanthropy now has a chance to help make it accessible—and to keep investing in the trusted information networks that communities need, whether or not their providers qualify for a tax credit. 

Tracie Powell is the CEO of The Pivot Fund, which invests in hyperlocal civic news and information infrastructure.