Newspapers facing headwinds from Austin to D.C.
While some lawmakers in Austin are trying to remove public notices from newspapers, our industry is also facing strong headwinds in Washington, D.C., where Congress is taking up the idea of tax reform. One proposal that seems to be gaining traction would involve limiting tax deductions for advertising expense.
Publishers from across the country gathered in D.C. on March 18-19 for the National Newspaper Association “We Believe in Newspapers” Leadership Summit with the goal of confronting that proposal and others while at the same time promoting measures that would benefit our industry. I was pleased to make the trip and was joined in Washington D.C. by Randy Keck, TPA’s second vice president and publisher of the Community News in Aledo.
As crazy as it may sound, there is an idea floating around Capitol Hill that considers advertising to be a tangible asset, similar to a piece of equipment. And, just like buying a piece of machinery with a predictable life-span, only a portion of the expense could be written off in the first year, with the remainder being amortized over a 5-10 year period.
Consider a automobile dealer who advertises a 2015 model car for sale. Under the proposal that is currently before the House Ways and Means Committee, only half of that expense could be deducted in the first year, with the remaining 50 percent being deducted over the following nine years. That means the car would be 10 years old before the advertisement that helped to sell it was fully deducted.
The idea is nothing short of a tax on advertising and is being offered as a way to pay for the repatriation of large corporations’ overseas earnings. I see it as robbing from Main Street and giving to Wall Street. Although some bills would exempt companies spending under $1 million a year on advertising, local communities today are filled with franchise and chain retailers and even smaller businesses that rely on co-op advertising that easily surpasses the $1 million threshold.
Also discussed at the summit was the need to strengthen the Freedom of Information Act. The act, passed in 1966, created a framework for the public’s right to know but it did little to convince those who work in Washington of the importance of transparency. Too often reporters seeking government records were confronted by apathy, or worse, intransigence.
Until 2007, a reporter’s only recourse was to sue the federal government. That changed with the creation of the Office of Government Information Services, which is housed within the National Archives and Records Administration, to give journalists an ombudsman to advocate on behalf of open records.
But, as it is now, the OGIS is an imperfect solution. It lacks the funding to take on other government agencies, particularly the U.S. Department of Justice, which sees the OGIS as interfering in its business.
This year, a pair of companion bills, S 337 and HR 653, would strengthen OGIS by requiring it to set up a mediation service. The bills would also deprive agencies of fees, and require them to consider all records open unless specific harms would result from release. The bills further discourage withholding information on technicalities and would prohibit agencies from holding back information merely because it might embarrass an agency.
Newly minted Postmaster General Megan Brennan was on hand for the NNA Leadership Summit where she heard a from a number of us about delivery problems. She promised to work with periodical mailers to improve the visibility of our mail in an effort to make it more easily identifiable in the mail stream. She also promised visits to rural facilities where many of the delays are being reported.
Brennan then spoke to the requirement that the Postal Service pre-pay its retiree health benefits. The requirement, which she said is borne by no other federal agency, costs the USPS about $5.5 billion annually and keeps the service from running in the black.
The problems at USPS were created by Congress and only Congress can solve them. To that end we should encourage our representatives to relax the prepayment requirement for health benefits, and let USPS employees take advantage of Medicare. Today, mailers are required pay higher rates in order to fund two health systems for postal retirees — Medicare and the retiree health benefits plan — when retirees are able to take benefits of only one. That is an abuse of mailers’ funds and should be ended.
Further, our lawmakers should be reminded that the Postal Service was created by the founding fathers to help bind this country together. Universal service, even to the most remote areas, should not be sacrificed for expediency or profit. Neither should the Postal Services seek to balance its books by reducing service, particularly Saturday delivery.
On the Hill
Following the meeting with Postmaster General Brennan, the publishers headed to Capitol Hill to meet with their senators and representatives. I had the pleasure of meeting with my newly elected congressman, Representative Will Hurd of San Antonio. He and his staff were still settling in to their new office, which, from 1947 - 1953, served as the office of Representative John F. Kennedy from the 11th District of Massachusetts. Still, Rep. Hurd took the time to meet with me and listen to my concerns.
That evening we were treated to dinner at the National Press Club where we heard CNN Senior Washington Correspondent Jeff Zeleny reminisce about his days growing up in Exeter, Nebraska. Zeleny went to work on the print side first, joining the staff of The Des Moines Register before working at the Chicago Tribune and The New York Times.
The flight home from Washington gave me a chance to reflect on the experience there as well as the assault on public notices here in Texas. If I were less of an optimist I might have held a pity party there in the plane. But, by nature I do tend to see the glass as being half-full and seek opportunities when faced with challenges. At least, I thought to myself, when I get home I get to work at a newspaper when I could be doing something much worse, like digging ditches or trying to sell Yellow Page ads.
“Just because you’re paranoid doesn’t mean they aren’t after you.”
-- Joseph Heller, Catch-22