New Policy Kit: Local News Dollars 📰

Today, DPN has released our Local News Dollars policy kit, an open resource for legislators, advocates, journalists, and citizens to learn how states can establish “Local News Dollars” systems — in which residents are issued vouchers to donate to journalism outlets of their choice — to expand and revitalize local journalism.

Strong journalism is an essential part of a strong democracy. Citizens must have access to information about their society and government to make informed decisions about how they wish to be governed.

The importance of local news for democracy is confirmed by dozens of academic studies. Local news increases participation in elections. It also slows polarization by de-nationalizing local politics, by increasing voters’ focus on local issues and by reducing the significance of partisan identity and national political conflicts. Further, investments in local news bring financial returns to the public. Studies have found that every dollar spent on local news can bring hundreds of dollars in public benefit by reducing corruption, increasing public oversight and improving government function. Studies also show that local news is associated with a shared sense of community. That is especially important today, as people are increasingly driven apart by social media algorithms favoring divisive, emotional content, and by a commercial media universe where rage and argument can be profitable. In a time of growing division, there is great societal value in the ability of local news to increase social trust and build community.

Despite the importance of journalism for society, the pressure on the American news industry is by now a familiar and sad story. Since 2005, more than one-fourth of America’s local newspapers have shuttered and newsroom employment has fallen by a similar amount.

The decline in the American news industry is rooted in the problem of supporting journalism by market mechanisms alone. Journalism is an “information good”, and information goods are not priced properly by typical market mechanisms. As economist Kenneth Arrow put it, “[I]nformation’s value for the purchaser is not known until [they have] the information, but then [they have] in effect acquired it without cost.”

States have an opportunity to fix this problem of journalism funding — and in doing so, to strengthen our democracy — by directly investing in journalism. However, efforts to publicly fund journalism face a major challenge: government funding must not influence journalists’ decision-making. In the US, the First Amendment prevents government from restricting expression based on the content of that expression. Therefore, government funding of news must ensure that this public funding does not distort the content of the journalism it funds.

DPN’s Local News Dollars state policy kit describes how states can tackle this challenge and publicly fund journalism, while at the same time putting decision-making power in individuals' hands. In a Local News Dollars system, individual residents receive vouchers that they can assign to qualifying news outlets. The outlets, in turn, collect money from the state government for each voucher they receive. The state government sets up light eligibility criteria for outlets, but beyond that, government does not make decisions about which outlets receive funds—each resident does, and journalists, in turn, retain their independence from the government.

Local News Dollars builds on recent programs that provide experience and insight into program design. In 2017, Seattle implemented a public campaign finance system called “Democracy Vouchers” which gives vouchers worth a total of $100 to Seattle residents. Seattleites give democracy vouchers to candidates, who redeem them for money from the Seattle government to fund their campaigns. This system has boosted diverse candidates and reduced the influence of money in politics.

A News Dollars system can strengthen the production of high-quality news, increase the number and diversity of news outlets, and connect people more closely with politics, events, and other subscribers in their communities. Democracies depend on an informed population and a robust public debate. States that implement News Dollars to strengthen news will deepen democracy.

If you are a legislator, activist, expert, or journalist looking to help promote this policy in your state, check out (and share) our kit — and please get in touch!