Illinois Tax Credits Offer Blueprint for Saving Local News
A new report reveals that Illinois’ innovative program providing tax credits for local journalism is showing early signs of success, offering a potential model for states nationwide grappling with the decline of local news.
A groundbreaking initiative in Illinois is injecting much-needed financial support into local newsrooms, and early data suggests it’s working. A recently released analysis from the nonprofit Rebuild Local News (RLN) details the first year of the state’s Local Journalism Sustainability Tax Incentive Program, the nation’s first refundable tax credit designed specifically to bolster local news organizations. The report, published last Thursday, identifies areas for improvement but overwhelmingly demonstrates a positive impact, with over $4 million in credits awarded to support more than 260 journalist jobs.
A Lifeline for Struggling Newsrooms
The Illinois program provides direct cash infusions to participating newsrooms, particularly benefiting “many small and non-profit outlets with limited tax liabilities but significant payroll costs.” According to one recipient, the credits represent “our second largest revenue stream for the year… about 15% more,” significantly impacting their ability to cover local communities. This structural support is crucial, as local news organizations across the U.S. are facing an existential crisis, often relying on unpredictable, one-off grants.
The Illinois model stands in stark contrast to other state-level efforts that have failed to deliver tangible financial assistance to local newsrooms or have been hampered by bureaucratic hurdles. The early success indicates that a well-designed policy structure can meaningfully support newsrooms of all sizes without compromising their editorial independence.
Program Details and Initial Results
Data shared by the Illinois Department of Commerce and Economic Opportunity (DCEO) in response to an open-records request from Northwestern University, released on December 9, reveals key details of the program. It established two types of tax credits: an “existing jobs” credit of $15,000 for each qualified journalist employed in the past year, and a “new jobs” credit of $10,000 for each new position created in the year prior to application.
The program authorized up to $25 million in funding over five years, allocating $4 million for retaining existing journalists and $1 million for new hires. As of 2025, the full $4 million for existing jobs has been allocated, while only $260,000 of the new hire funds were claimed, leaving approximately three-quarters of that allocation unused.
Addressing Challenges and Maximizing Impact
RLN’s analysis suggests the one-time hiring tax credit may not be substantial enough to incentivize long-term hiring in financially precarious newsrooms. One publisher noted that the funds “would push a decision over the edge on a new hire ‘in normal times,’ but they still face headwinds in a precarious industry and economic landscape.” Limited awareness and a restricted hiring window also contributed to the underutilization of the new hire credit. RLN proposes that the credit could function as a “complementary layer alongside philanthropy” as the program gains wider recognition.
The program’s reach has been broad, with a majority of funds going to news organizations outside the Chicago metropolitan area and over one-third awarded to non-profit organizations. Notably, two-thirds of the recipients were small news outlets with six or fewer journalists, demonstrating the program’s commitment to supporting smaller, community-focused news providers. Local newspapers received the largest share of funding, close to two-thirds of the total, with the remainder distributed between broadcast and digital outlets.
Areas for Improvement and Future Expansion
To increase participation in the new hire credit, RLN recommends increasing its value to at least $15,000 and potentially implementing a two-year tapered subsidy, offering a smaller $10,000 credit in the second year to ease the financial burden of new hires. Adjusting or removing the organizational funding cap for the new hire credit is also suggested.
Several eligibility requirements currently exclude potentially deserving organizations. University-based public media stations are ineligible because their mission statements don’t explicitly mention “news.” RLN suggests amending the statute to include State Governmental Education Agencies with public broadcasting licenses. Sole proprietors, a growing segment of the news ecosystem, are also excluded due to their lack of W-2 forms, and RLN proposes language changes to address this issue.
Furthermore, the requirement for digital organizations to publish weekly for 12 months excludes some investigative outlets with less frequent publishing schedules. RLN suggests shifting to a monthly publication frequency requirement. Improving communication, providing sample applications, and addressing filing issues for publishers using third-party payroll processors are also recommended.
While the report did not examine the direct impact of the funds on participating newsrooms due to the timing of the research, anecdotal evidence suggests a positive effect. “Payroll is our biggest expense as a small newspaper,” said a publisher from a suburban non-profit. “The credit is a lot of money to us. It will help pay our freelancers…that will help our community.” A small digital publisher in the Chicago area echoed this sentiment, stating that “any support that helps us retain journalists is meaningful.”
More information, including a complete list of credit recipients, is available in the full report [here](link to report). This Illinois program offers a valuable blueprint for states seeking to revitalize their local news ecosystems and ensure a well-informed citizenry.
