• by Ray Schultz , Columnist, May 27, 2024

The California Journalism Preservation Act may be drawing most of the attention and threats to cut off news. But the big tech platforms may be even more antagonized by Senate Bill 1327, which passed the appropriations committee last week and is now headed to the full state Senate for a vote.

In effect, SB 1327 would tax one form of ad revenue to support another. The bill’s author, Sen. Steve Glazer (D-Contra Costa), is taking aim at the tech platforms that are “able to monetize the data they extract by using it to sell advertising.” 

To that end, the bill would create a “data extraction mitigation fee” based on the value that the largest online platforms derive when they extract personal and economic data on consumers. 

How will it work? The bill would take the statewide sales and use the tax rate of 7.25% and apply it to total advertising revenue above $2.5 billion.

The money would go toward funding tax credits for local news organizations, both print and broadcast, that employ full-time journalists. The total would be $500,000 per year.  

Publishers could claim a tax credit of 25% for wages paid to full-time reporters, more if they offer health and retirement benefits, and more if they employ minority staffs. 

In a recent press conference, Glazer noted that while “the platforms’ advertising revenue soared, the advertising revenue for journalism, especially for print publications, cratered.”

Since 2005, the number of journalists employed in California has decreased by 68%. And ad revenue has plummeted by 66% in the last 10 years, Glazer said.

Local journalism has been “hallowed out by these online data extraction platforms,” Glazer charged. 

He emphasized that the government will not influence content. 

However, Glazer’s bill will face fierce opposition. The California Chamber of Commerce is against it. And Google is already blocking some news links in response to the CJPA – surely it will not sit still for SB 1327.