GAO report on economic viability of local journalism ignores state-based issue of public-notice advertising in newspapers

Chart from Government Accountability Office report shows some revenue options for local journalism. 

By Al Cross
Director and Professor, Institute for Rural Journalism and Community Issues, University of Kentucky

Thursday's Government Accountability Office report on local journalism is a welcome document. It is a recognition by the nonpartisan investigative arm of Congress that threats to the economic viability of local journalism are a collective threat to local democracy in the United States. The 88-page report is a valuable compilation of the issues and potential solutions, such as philanthropy, tax incentives, direct public funding and federal advertising. It should raise the issue on policymakers' radar and help guide their responses.

But the report misses a key point, especially for rural newspapers. Perhaps because it is from one federal agency to another, the Federal Communications Commission, which requested the report, it does not mention an increasingly important revenue source that is under threat in most states: public-notice advertising by local and state governments.

GAO is not unaware of the issue. I mentioned it as one of the 40 participants in a two-day workshop that the agency held last February to explore the threats to the viability of local journalism. I pointed out that as goods-and-services advertising has moved from local newspapers to digital platforms, public notices (which many still call "the legal ads") have become a much more important part of newspaper revenue, especially in rural areas, where retail display advertising has largely disappeared. Some publisher say they account for more than 20 percent of revenue, the difference in profiit and loss.

As newspapers increasingly depend on government advertising that is required by law, that revenue is in jeopardy in most state legislatures, where local officials and their lobbyists argue that public notices would be better placed on government websites. Some states, most notably Florida, have given local governments that option. It saves a very small share of a local budget, but makes for great reduction in the reach of the notices. Surveys have shown that citizens are highly unlikely to look for notices on government websites and would prefer to kepe them in local newspapers. Most states already require papers to post public notices on freely accessible websites, usually run by state newspaper associations.

Beyond newspaper revenue, public notices are increasingly important for public information, because newspapers are less able to cover government activities. Even journalists sometimes forget that public-notice ads are one leg of the three-legged stool of open government, along with open-records and open-meetings laws. "The legals" are often sources for stories; the Public Notice Resource Center gives an annual award for the best story that sprang from a public-notice ad.

In some states, public-notice laws lack objective standards, letting local officials play favorites with their advertising, as writer Susan Chandler reported a few months ago in a story for the Local News Initiative at Northwestern University's Medill School of Journalism. But state newspaper associations are often reluctant to ask legislators for better standards, for fear that any public-notice legislation would become a vehicle for damaging measures.

This is largely a state-by-state fight, but it has become an existential one for newspapers, especially those in rural America. It needs to be remembered in the national discussion about the sustainability of local journalism.