You want to help keep your taxes down? Buy a local newspaper.
Sure, it sounds like a self-serving plug, but it’s actually the findings of what looks to be a fairly exhaustive analysis: When newspaper’s close, the cost of municipal borrowing — the interest rate your city, borough, county or school district pay when floating bonds — goes up.
The findings were detailed in a paper presented at the 2018 Municipal Finance Conference held July 16 and 17. Titled “Financing Dies in Darkness?” the paper looked at a wide range of data on newspaper closure and municipal bond rates.
It comes from Brookings, considered by many to lean left and certainly a frequent source of criticism for the Trump administration. But the findings are important in an age when more and more people dismiss anything they don’t like as “fake news,” when social media posts (usually lacking any accountability or depth) are often the primary and even sole source of “news” for many, and when the president of the United States has taken to calling the fourth estate “the enemy of the people.”
(We’re not, by the way. We are local residents, neighbors and taxpayers. What impacts you impacts us; we have no incentive to be our own enemy).
It also comes, incidentally, at a time when newspapers are facing yet another economic challenge thanks to a government tariff on Canadian newsprint.
So what did the research — done by people from the University of Notre Dame and the University of Illinois at Chicago — say? You can read the full paper at brookings.edu, but the gist is pretty straightforward.
Overall, they found that counties with newspaper closures had “significant increases in borrowing costs.” This basic fact held true when various tests were conducted to verify the finding, including looking at neighboring counties with similar populations, borrowing costs before and after closings, and closing in counties with multiple newspapers compared to those with few newspapers.
These findings come from data on local newspapers and municipal bond yields stretching from 1996 to 2015. They also come at a time when local newspaper circulation has seen years of decline, dropping nationwide by 27 percent from 2003 to 2014.
The authors also find “suggestive evidence that alternative sources of media, such as the internet, are not acting as sufficient substitutes for local papers. Local issues are often not topical enough for the national news media, they say, and many non-traditional news sources tend to disseminate content rather than produce new information.”
The reason? To the “ink-stained wretches” at this and other papers who toil away daily scrutinizing local government budgets, deliberations and actions, its hardly a surprise. The authors speculate:
“[C]losing local newspapers increase government borrowing costs because (1) less information is publicly available, and (2) local officials are no longer monitored as closely, reducing the quality of governance.”
Scrutiny and accountability keep government officials more honest, and that’s what local newspapers like this one do on a daily basis. There is proof, now, that it literally pays for our readers.