Newspapers would get tax cut in Wash. House bill

With one of the state's largest daily newspapers seemingly on the brink of printing its last edition and others furiously cutting costs, the state House has approved a temporary tax break for newspapers.

Supporters said they were hoping to both protect jobs and bolster an independent press, citing newspapers as an important watchdog of government and other powerful interests.

"We are starting to lose the ears and the eyes on government, on all kinds of things in our society," said the bill's prime sponsor, House Majority Leader Lynn Kessler, D-Hoquiam.

The House endorsed the bill Tuesday night by a vote of 91-5. It now moves on for consideration by the state Senate.

The bill would give newspapers and businesses that print newspapers a 40 percent cut in their state business tax through 2015. The discounted rate mirrors breaks given in years past to the Boeing Co. and the timber industry.

Newspapers have seen ad revenue fall steeply in recent years as advertisers take their business to Internet-based entities, particularly sites offering free or low-cost alternatives to classified ads. Starting last summer, the recession intensified the decline in advertising revenue in all categories.

The House vote came on the same day that Hearst Corp.'s deadline for finding a buyer for the Seattle Post-Intelligencer apparently passed. The P-I, the state's oldest newspaper, could announce within days whether to close or continue as an online-only publication with a greatly reduced staff.

Kessler said the newspaper bailout could cost the state about $1.5 million a year in lost tax revenue. The estimated cost had been higher, but officials recently recalculated a lower number to account for the presumed shutdown of the P-I, she said.

Among the bill's few opponents were lawmakers who said the state should give tax breaks to even more industries around the state amid the lingering recession.

Rep. Ed Orcutt, R-Carrolls, said he found it ironic that newspaper editorials in his area have encouraged voters to support increased tax levies, but might now get their own special tax break.

Orcutt also questioned why newspapers aren't charging for online content as readers and advertisers migrate to online sources.

"I don't think passage of this bill is going to be the difference between maintaining our democracy and losing it," Orcutt said. "Really, it won't."

But Rep. Ross Hunter, D-Medina, said newspapers provide such a public good that they should get some help as leaders sort through a seismic shift in the business model.

"I cannot imagine our government without the press to investigate," Hunter said.

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The newspaper tax break is House Bill 2122.

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Legislature: http://www.leg.wa.gov