Small and mid-sized newspapers are struggling financially. That’s no secret. Competition for the public’s attention, and for advertising dollars, from a seemingly infinite variety of digital options has drained both circulation and revenue from the industry.

U.S. newspaper circulation is at its lowest level in 60 years, and that’s counting both print and digital subscriptions. In the past decade, advertising revenues have dropped more than 60%, and that was before the pandemic hit.

Newsroom employment at U.S. newspapers dropped by nearly half between 2008 and 2018, from about 71,000 workers to 38,000, though reductions here at The Day have not been as sharp due to the support of our readers and advertisers and our distinctive business model. But we are not immune from the pressures.

The pandemic has made a bad situation worse. Businesses forced to close don’t advertise. Struggling businesses have fewer resources for advertising.

We would argue that democracy needs newspapers, or their digital equivalent, with paid journalistic professionals to gather news, uncover abuses of power by government and business officials, outline the policy goals and voting records of candidates, inform the public about crime and justice, and provide communities a place to debate matters of public policy.

Local newspapers offer information about taxes and property values; the operation of schools; local achievements; the scores and stories of high school teams; schedules and reviews of movies, concerts, restaurants and books; and the offerings of local small businesses.

Too many small towns and mid-sized cities have already lost newspapers, creating news deserts. A University of North Carolina study released in January found that by last year, before the pandemic, 2,100 newspapers had disappeared, or almost 25% of the 9,000 newspapers published in 2004. That translates to 1,800 communities with no original local reporting.

Other research found that when a local newspaper closes, municipal borrowing costs — and therefore residents’ taxes — go up. Why? Losing a paper, the study said, creates a “local information vacuum.” It turns out that lenders depend on local reporting to judge the value of government projects — and the officials in charge of them. Without that information, lenders tend to charge higher rates.

And then there is corruption, petty or grand, which can happen when there is no watchdog.

Given the importance of local news gathering to democracy, we urge support for pending bipartisan legislation. The Local Journalism Sustainability Act (H.R. 7640) provides for tax credits that support the three pillars of trusted, fair and accurate journalism: people who subscribe to newspapers or other local media; businesses that advertise in local newspapers; and newspapers that staff their newsrooms with journalists who cover the community. The tax credits aren’t permanent and sunset after five years, unless extended.

There is a self-serving element in our support for such legislation, we readily admit. But this industry is important and it needs help.

The bill would provide every taxpayer tax credits up to $250 a year to spend on subscriptions to qualified local newspapers. It would give businesses with fewer than 1,000 employees tax credits of up to $5,000 the first year and up to $2,500 for the next four years for advertising in local newspapers or local media. And it would give local newspapers a tax credit of 80% of its compensation to journalists in the first year and 50% for the next four years.

These are tax credits — not a handout, not a bailout.

We would urge an amendment: a requirement that newspapers, to benefit from these incentives, must plow a stipulated amount of their revenues back into the local news product, thus prohibiting an excessive amount of revenue from being drained off for the benefit of shareholders and corporate masters.

This will not be a problem for The Day, independent and owned by a split-interest trust, which operates the company and supports the Bodenwein Public Benevolent Foundation. Revenues go back into the product, with any modest profits distributed to nonprofit organizations in our community. Since its start, the foundation has distributed more than $12 million.

Would such government support leave news organizations beholden to the politicians who backed it? That’s a fair concern. But the same potential conflict has held true for advertisers. The Day newsroom, at least, has never let advertising considerations influence following the news where it takes us. We would likewise not show any politician favor.

The House bill had 49 co-sponsors as of Thursday, but on Thursday evening Rep. Joe Courtney, D-2nd District, joined them. The public’s right to fair and trusted local news may be on the line.

Editor's note: The last paragraph contains updated information.

The Day editorial board meets with political, business and community leaders to formulate editorial viewpoints. It is composed of President and Publisher Timothy Dwyer, Executive Editor Izaskun E. Larraneta, Owen Poole, copy editor, and Lisa McGinley, retired deputy managing editor. The board operates independently from The Day newsroom.