Newsom Signed a Bill Giving California Newsrooms Tax Credits for Every Journalist They Employ. His Own Finance Office Had Opposed It.
Wednesday, September 30, 2026. Gov. Gavin Newsom (D-CA) signed AB 2222, the Community NEWS Act, which gives California news organizations refundable state tax credits based on how many journalists they employ. “A free press isn’t supposed to make government comfortable, it’s supposed to make government accountable,” the governor wrote on X.
It is a payroll-linked tax credit, not a grant, and supporters say it is paid for by closing a different tax break. Whether the state should be paying newsrooms to employ reporters, and who gets to decide which newsrooms qualify, is now a live argument in California.
- $20,000per journalistAnnual credit for each of a newsroom's first five full-time journalists (Twitchy, Rebuild Local News).
- $15,000per additional hireCredit for each additional full-time journalist, plus a stacked $15,000 for each new hire.
- $40M+a yearCost estimate cited by Governing; Twitchy cites about $55 million. Estimates, not appropriations.
- 2027–2031termFive tax years, then the Legislature must reauthorize it, per Rebuild Local News.
AB 2222 was co-authored by Assemblymembers Chris Ward (D-San Diego) and Buffy Wicks (D-Oakland). It creates refundable employment tax credits for print, digital, and broadcast outlets, whether they are for-profit companies, 501(c)(3) nonprofits, or sole proprietorships. The credits are $20,000 for each of the first five full-time journalists, $15,000 for each additional one, $7,500 for qualifying part-timers, and a stacked $15,000 for each new full-time hire.
Rebuild Local News, an advocacy group that supported the bill, gives an example: a newsroom with three full-time staffers would qualify for $60,000 in 2027, paid out in 2028, or $95,000 if it added a fourth. The program runs for tax years 2027 through 2031. Rather than appropriating new money, the bill pays for itself, supporters say, by ending a corporate deduction for executive pay above $1 million a year, which also aligns California with federal law.
I'm signing legislation to strengthen independent journalism and help qualifying local news organizations hire and retain journalists in California. A free press isn't supposed to make government comfortable, it's supposed to make government accountable.
According to Governing, the California Taxpayers Association and business groups including the California Chamber of Commerce opposed the bill because it raises taxes on employers. More notably, the governor’s own finance office issued an analysis opposing it, Governing reports, for failing to outline a cap on the credits and for subsidizing existing jobs rather than encouraging new journalism jobs. The California News Publishers Association, of which the Los Angeles Times is a member, supported it.
The price tag is an estimate and the estimates differ. Governing puts it at more than $40 million a year; Twitchy reports about $55 million; Straight Arrow News cites $121 million over three fiscal years. All are projections. Because the credits are tied to headcount and the Department of Finance flagged the absence of a cap, the actual cost depends on how many outlets claim them.
Any program that pays newsrooms from the state treasury raises the same question: independence. AB 2222’s drafters built in accountability standards for participating outlets, per Times of San Diego: disclosure of ownership or nonprofit board members, media liability insurance, a public error-correction policy, and restrictions on control by political action committees. Supporters describe the approach as nonpartisan and First Amendment-friendly.
Rebuild Local News, which sponsored the bill, calls its approach nonpartisan and First Amendment-friendly, per Times of San Diego: eligibility turns on headcount, ownership structure, and the standards above rather than on the quality or viewpoint of coverage. Critics’ concern, that any government payment creates leverage over the recipient, is a judgment about incentives rather than a documented abuse, and none has been reported under this law, which does not take effect until the 2027 tax year.
California already funds local news a second way: a Google-matched Civic Media program. In May 2025, amid a projected $12 billion budget deficit, Newsom proposed cutting the state’s planned contribution to that fund from $30 million to $10 million, per Straight Arrow News. In July 2026 his office announced $20 million in grants matched by Google. AB 2222 is separate: a tax credit administered through the tax system, not a grant program run from the governor’s office.
That distinction matters for readers following the debate. The Civic Media grants, which the R Street Institute has criticized as placing state media money under the governor’s office, are a different mechanism with a different oversight structure. Conflating the two makes it harder to evaluate either.
California will pay newsrooms through the tax code for every journalist they employ, starting with the 2027 tax year, over the objections of business groups and the governor’s own finance office. Finance officials flagged that the cost is uncapped, the eligibility rules are the real test of independence, and the first checks arrive in 2028.
