Professional journalists are essential to democracy.

localnewsProfessional journalists are essential to democracy.

But if you’re like the average person and spend your time worrying about the rising cost of living and making ends meet at home, is the closure of local newspapers and shrinking local newsrooms for somebody else to worry about?

What if I told you that your local journalism was worth $100 a year in your pocket?

Those of us who have lived in Kingston for a while have seen our local paper, the Kingston Whig-Standard, shrink in size over the last 20 years. Recently, it stopped publishing a print edition on Mondays. More dramatic has been the unseen decrease in the size of the news staff: a ten-fold decrease in their number since the Whig’s heyday.

Kingston is not unique. This is a global phenomenon as the Internet has found ways to deliver advertising and free content much more cheaply than traditional media. The largest newspapers have refocused on national content for a national audience and have been able to charge for online access. Unfortunately, local news and local newspapers in smaller communities, like Kingston, have suffered. There is no larger market the local news can be sold to in order to gain economies of scale.

So what?

Local investigative journalism in print or broadcast media has played a fundamental role in our society to hold governments accountable. How else can we easily follow what local officials are doing, which new bylaws are being debated, or who to look at for praise or punishment? It is all too easy to find stories of local government officials misbehaving when nobody was watching.

Can we actually see and measure the effect of local newspaper closures on the average person, instead of just relying on anecdotes? Can we feel it outside of political outcomes? The answer is yes and it comes from researchers in a field called Municipal Finance.

One group of researchers has been looking at the interest rates that U.S. municipalities have to pay to borrow money. Investors have a choice of which cities to lend money to. Municipalities are carefully studied. Cities which are well managed can borrow at lower interest rates because investors are willing to accept less interest in return for more safety. Conversely, municipalities who are less well managed are more risky and have to pay more interest to attract investors.

Last year these researchers from the University of Notre Dame and the University of Illinois Chicago reported that closures of local newspapers resulted in measurable increases in interest rates, after controlling for underlying economic conditions. They found that interest rates increased between 0.05% and 0.11% in the long run. These may seem like small numbers, but if you borrow $100 million for ten years to build a bridge or a hospital, that’s $500,000 to $1.1 million extra in interest payments!

Furthermore, lower government efficiency was correlated with local newspaper closures: government wage rates, employees per capita, tax dollars per capita and the use of non-competitive financing or costly re-financing tools. The increased tax dollars per person per year was about $100 (the researchers reported US$85, but the precise amount is not important).

So, what exactly goes on when a local newspaper closes? Well, it means fewer experienced reporters working full time, looking over the shoulder of government, following up on tips, sifting through and making important information public. It means it’s harder for the public to keep tabs on their city government, or even that the public cares less because they are less informed. It means that problems in government are easier to overlook or even hide. Ultimately, it means that it’s more risky for any investor (for example, pension funds) to lend to these cities. Investors will demand higher interest rates and, in the end, somebody has to pay that higher interest rate to get that bridge built or that hospital renovated. Guess who? Higher taxes and fees end up being paid by the residents.

Better democracy as a result of the free press is not just a warm, feel-good notion. It’s as real and valuable as a new pair of shoes for your child, groceries for the week, or gas for the month!

Looking at municipal finance is a clear way to illustrate that we must fight to defend local journalism.

But what about online news. Is that adequately replacing print news? Perhaps on a national level where economies of scale seem to be supporting journalism. But locally it does not appear that online news is replacing what the print news used to be. The municipal finance researchers provided a bit of indirect evidence. They found that the effect of local newspaper closures on municipal borrowing costs was about the same in states with high or low internet usage. Borrowing costs increased, even in the long run, which suggests that online news is not a sufficient substitute.

There is a more subtle aspect of online news replacing print news. Local government (the City, the police) can now communicate their news directly through social media. They used to be covered by specialized journalists. Communicating directly with the public is fine but that is competing with newspapers and undercutting the economic viability of a professional, independent source of information about our municipal government.

Changing technology is inevitable, but the need for a robust democracy will endure. Perhaps it is not news papers which should be defended but the journalists who uncover and report the news. How news is delivered to citizens will inevitably change. But professional local journalism should not be allowed to perish.

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