(The Center Square) – A Washington state bill filed last year and reintroduced this session would levy a tax on certain social media platforms and search engines to fund state Department of Commerce journalism grants.
It’s a proposal that garnered support from several news organizations during its public hearing that indicated they will apply for funding, but the bill also drew criticism from tech sector advocates who say the tax could face legal challenges.
Under Senate Bill 5400, sponsored by Sen. Marko Liias, D-Edmonds, a 1.22% local journalism investment surcharge would be imposed on social media platforms and search engines. The money would be used to fund the Local News Sustainability Program through Commerce, which would then distribute the grant funds for media outlets to hire reporters that meet the program’s requirements and media definition.
Among those to testify in favor of the bill at its Thursday public hearing in the Senate Ways & Means Committee was Alan Fisko, president and CEO of the Seattle Times Company.
“We have to do everything we can to protect our journalism jobs that remain and provide incentives to grow the number of journalists in our state,” Fisko said. “The modest surcharge and some tech companies that we talked about would be a drop in the bucket compared to the billions that they’ve made, many of which from our news content that they have used without any compensation. Many news organizations would benefit from the package of this bill, from the passage, including The Seattle Times.”
Also testifying in support was Carrie Radcliff, the publisher of the Daily Herald.
“Like many news organizations the herald is faced significant economic pressures over the past 25 years including staff reductions even as we continue to provide essential coverage of our community,” she said. “That’s why SB 5400 presents such an important opportunity.”
However, Washington Technology Industry Association Government Relations Director Amy Harris said SB 5400 is “built on a flawed premise … that a small number of technology companies cause the decline of local news, and that those same companies should be responsible for fixing it. Singling them out through a targeted tax will not solve those challenges.”
Harris also noted that Maryland enacted a similar tax that has been since legally challenged and could result in the state having to refund companies subject to it.
“We’ve already seen this approach plays out,” she said.
The Washington Newspaper Association is also in support of the bill, arguing in a statement that “the bill has the capacity to make a difference, especially in the smallest of newsrooms that are scattered across the state, in communities big and small. Without a local newspaper, there would be a vacuum of information. Without their local newspapers, communities on the whole would not know what their city council was doing, or how their school board was spending their money.”
No further action is scheduled for SB 5400.
