Saying that a free press is essential to holding government accountable, Gov. Gavin Newsom on Wednesday signed a bill providing tax credits to newspapers, local broadcast stations and digital media companies that retain and hire journalists in California.

The measure, AB 2222, by Assemblymembers Buffy Wicks, D-Oakland and Chris Ward, D-San Diego, with credits valued at roughly $55 million a year over five years, is intended to slow the loss reporters and the closure of newspapers across the state, particularly in small communities, who cover city council meetings, court trials, high school sports and other community events.

Because of economic pressures and consolidation, California has lost 41% of its local newspapers since 2005, according to a study from Northwestern University, amid a similar 39% decline nationwide, due in large part to loss of advertising to large tech companies like Google and Meta, and the loss of classified ads to websites like craigslist, eBay and others.

At ag ceremony in his Sacramento office on Wednesday, Newsom contrasted California’s moves to shore up journalism with Trump’s decisions to slash funding for PBS and NPR, sue news organizations who have published stories critical of him, and ban media outlets such as CNN in recent weeks from White House events.

“We think this is nation-leading and could not have come at a more important time,” Newsom said of the new law. “Darkness in Washington D.C., and daylight here in California. The contrast could not be more acute.”Starting in 2027 and continuing for five years, the law Newsom signed Wednesday will provide tax credits of $20,000 per full-time journalist at a newsroom for the first five positions and $15,000 for each additional journalist. Part-time journalist jobs would receive $7,500 credits. A $15,000 “new hire” credit would be awarded to news organizations that expand their newsroom’s headcount of journalists.

The bill was supported by media organizations like the California Broadcasters Association, California Independent News Alliance, and California News Publishers Association, of which the Bay Area News Group is a member.

“I’m delighted that he agreed to sign it,” said Chuck Champion, president of the California News Publishers Association. “It was a long hard fight. He explained why he had concerns. I’m glad we have the bill that will begin to solve the problem. But we are a long way away of the problem being completely rectified.”

“This is a step in the right direction. But we are going to have to do a lot more.”The industry needs stronger laws to stop artificial intelligence software from stealing copyrighted material, Champion said, and to require companies like Google and Meta to pay news companies when they link to news stories and sell advertising around them.

The bill was opposed by the California Taxpayers Association and the California Chamber of Commerce. They object to its funding source — eliminating the ability of corporations in California to deduct executive compensation above $1 million. Much of that cost would fall on large tech companies.

“Cal Chamber has no concerns with the development of the journalism tax credit provisions,” said John Myers, a spokesman for the Chamber of Commerce, after the bill was approved by the Legislature. “But there are significant concerns with increasing businesses’ tax liabilities to fund the new tax credit.”Meanwhile, a second effort aimed at helping media companies, particularly small newspapers, is also underway from the state. The $20 million annual California Civic Media Fund is a program Newsom announced in July. Google will pay half and California will pay the other half.

The fund grew out of a $250 million plan announced two years ago by Google and Newsom after an effort by Wicks and other legislators to drop antitrust rules to allow publishers to jointly negotiate with the tech giants for linking to their news stories and selling advertising around them failed amid intense lobbying by Google, Meta and others. Newsom backed out of that compromise in January, saying the state couldn’t afford it. After an outcry from state lawmakers and publishers, the new Civic Media Fund was announced.

The money is being overseen by the Governor’s Office of Business and Economic Development. Awards of up to $250,000 per newsroom, chosen with the help of the non-profit James B. McClatchy Foundation, founded by the former publisher of the Sacramento Bee, are expected to be announced in October.

Newsom noted Wednesday that the next tax credit bill he signed, AB 2222, is open to media companies that cover local news, regardless of whether they are conservative, liberal or nonpartisan. He said he has concerns that hedge funds and large corporations will apply for the money, along with smaller mom-and-pop newspapers, ethnic publications and broadcast stations. He asked lawmakers to track how the funds are spent and make changes to the program in the coming years if necessary.

“We should not be subsidizing hedge funds,” the governor said. “We should be focusing where the need is the greatest.”Overall, however, he said, state tax credits to retain and hire journalists covering local news are something other states should copy. Illinois and New York have similar, albeit smaller, programs.

“We’ve seen what happens in the void when you lose local journalism,” Newsom said. “Partisan organizations step in. More mistrust. More division. More anger. More bias that’s expressed. We’ve seen it in California.”