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Report: Newspaper closures increase size, cost of local government

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When a newspaper closes, local governments in the area tend to borrow more, spend more, hire more workers and raise taxes, according to a study on the matter.

The study by professors from Notre Dame and the University of Illinois at Chicago found a pattern of government growth shortly after a newspaper closes. The study is in the process of being peer reviewed and hasn’t been published in a journal. The authors analyzed 204 counties with a single newspaper that closed between 1996 and 2015. They found local borrowing costs rose by up to 11 basis points more than they otherwise would. Government efficiency diminished as well.

“Wage rates, government employees per capita, tax dollars per capita, and the likelihoods of costly advance re-fundings and negotiated sales all increase following a newspaper closure,” according to the report.

Courtesy of Pew Research Center

The report said local leaders may feel like they can do things differently without the scrutiny of a local newspaper there to report on local government actions.

“If local governments are no longer being watched as closely, then they’re more likely to engage in bad behavior and more likely to become inefficient,” said Dermot Murphy, assistant professor at the University of Illinois at Chicago and one of the authors of the paper.

Even the presence of an investigative reporter would likely give public officials pause before they did something that could become next Sunday’s headline.

“There is more temptation for government leaders to just do what they want without feeling like there would be any consequences or anybody paying attention,” said Doug Haddix, executive director of Investigative Reporters and Editors.

Cash-strapped newsrooms have cut back on investigative reporting amid layoffs and other cutbacks. In some cases newspapers do less digging, but publish more shorter stories.

“Investigative reporting has always taken more time and expertise,” Haddix said. “With fewer reporters on the ground, there are unfortunately fewer opportunities for this kind of journalism in most cities around the country.”

A June report on newspapers from the Pew Charitable Trusts found that the total number of employees working in the newspaper industry has dropped from more than 71,000 in 2007 to a little more than 39,000 in 2017.

The effect is also seen in states where the capital is removed from the state’s population center, referred to in the paper as “high isolation states.”

“The marginal effect of external monitoring on governance quality is likely to be stronger in states with low quality governance,” according to the report. “Thus, we hypothesize that the effect of a newspaper closure on borrowing costs will be higher in high isolation states compared to low isolation states.”

Article by Cole Lauterbach with Illinois News Network. For more INN News visit ILnews.org

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Illinois News Network, publisher of ILNews.org, is a nonpartisan, nonprofit media company dedicated to the principles of transparency, accountability, and fiscal responsibility in the state of Illinois. INN is Illinois’ pioneering non-profit news brand, offering content from the statehouse and beyond to Illinoisans through their local media of choice and from their digital hub at ILNews.org. Springfield Daily was granted republishing permission by INN.

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Washington Street redevelopment gets TIF support

Thomas Clatterbuck

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A new downtown hotel development took a big step forward at the Springfield City Council Meeting. DK Collection SPI received $7.65 million in TIF funding to incentivize their $56 million project. These funds will offset property taxes once the project is completed. Unlike some TIF projects, the hotel will only get the TIF benefit after the construction is completed and it starts to owe taxes. However, the developers said that this support was key to making the project a viable investment.

The development will be more than just a hotel, and will include both luxury apartments and various entertainment venues. During construction, it should create between 400 to 600 jobs, including 15 to 30 summer jobs for local youths. The site itself will employ 130 to 150 full and part time positions.

The council was very supportive of the new development. In addition to the initial jobs and investment, there are hopes that it will draw more conventions and visitors to Springfield. Although there were some concerns about adding competition, the extended-stay style of the new hotel was seen as filling a different niche in the tourism scene.

Parking was the only serious concern for the development. Springfield may have more downtown parking than many cities, but adding several hundred new jobs and visitors creates a logistical challenge. Existing parking companies downtown expressed their concerns about the potential displacement of people who currently park in the areas that will be redeveloped. Alderman Joe McMenamin echoed these concerns, and suggested that the council was moving too quickly to approve the project. McMenamin referenced the Hy-Vee TIF project, where he said taking more time led to better outcomes for both the developer and the city.

Other aldermen disagreed. Alderman Andrew Proctor said that he had received no complains or messages about the potential parking issue. Mayor Langfelder said that parking patterns shift over the course of the day, and that lots that are under-utilized at night could be looked at to alleviate any shortage. The developer also said that since the last meeting, they had negotiated with other property owners downtown and changed some of their designed, and had added a significant amount of parking to their plan.

After calling the question to end debate, the Council voted 9-1 in favor of approving the TIF funds. Despite voting against the measure tonight, McMenamin later said that he was fully in favor of the project, but not how the council had moved the issue forward.

You can watch the final discussion in the player above, or the developer’s initial presentation in the player below.

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Illinois launches veteran-owned small business logo program

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Finding veteran-owned local businesses will soon be easier.

The Illinois Department of Veterans’ Affairs is offering a sticker to qualifying veteran-owned businesses. Veteran-owned businesses that are registered with the state, and in good standing, can display the logo in their place of business.

The stickers will be released as part of their annual program that sets aside $300 million in state contracts that only veteran-owned businesses can bid on, Illinois Department of Veterans’ Affairs spokesman Dave MacDonna said.

“We want to raise public awareness about small businesses that are veteran-owned or large businesses that are veteran-owned,” he said.

MacDonna said that there are many small business owners across the state and this is a way for consumers to have confidence that they’re spending their money with one.

“We want the consumer to realize that they are a trusted and valuable part of the community,” he said.

The program will run in concurrence to the state’s annual Veterans’ Business program, which gives qualified veteran-owned businesses in the state access to more than $300 million in contracts.

For information about the program, visit www2.illinois.gov/cms/business.

Article by Cole Lauterbach with Illinois News Network. For more INN News visit ILnews.org

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America’s newspapers are vanishing, with Illinois losing more than most

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When a newspaper closes or stops providing local content, it’s bad news for the local community, according to an updated report.

Since 2004, hundreds of local newspapers have closed up shop. The author of a report on this trend said areas without a local paper suffer in a variety of ways.

A study by the Center for Innovation and Sustainability in Media at the University of North Carolina says newspapers have shuttered at a high rate since 2004, many of which happened shortly after the recession in 2008.

“In total, the United States has lost almost 1,800 papers since 2004, including more than 60 dailies and 1,700 weeklies,” the report found. “Roughly half of the remaining 7,112 papers in the country – 1,283 dailies and 5,829 weeklies – are located in small and rural communities. The vast majority – around 5,500 – have circulations under 15,000.”

Illinois lost 157 weekly papers since 2004, most located in suburban Chicago as many merged with larger daily publications like the Chicago Tribune. This is among the highest number of closings in the country.

“Illinois has lost a tremendous number of newspapers,” said professor Penelope Muse-Abernathy, Knight Chair in Journalism and Digital Media Economics at the University of North Carolina and author of the study. “Newspapers have been the prime, if not sole, source of grassroots coverage of events that affect the quality of life for people in a community.”

The study was updated recently from an initial publication in 2016.

Behind a lack of revenue to support the local publications are decades of declining readership. According to the Pew Research Center, U.S. daily newspaper readership fell by 11 percent in 2017.

Muse-Abernathy said local newspapers have three main benefits to the area they serve: Coverage and oversight of local government; encouragement of regional economic growth and development; and social cohesion.

Often, smaller newspapers will merge with a larger one nearby and then reduce coverage of the area to cut costs, something the report dubs “ghost papers.” Ghost papers offer little to no local content.

“What you have is a paper that was a standalone newspaper in 2004 that has been gradually merged with a parent, usually a large metro daily,” she said. “They first become zoned editions and then tend to morph into an online-only presence with greatly-diminished resources.”

Studies have shown cities without local investigative journalists are more likely to raise taxes and become more inefficient.

The “news deserts” can be found in urban, rural and suburban areas across the nation, but most have one common trait: Poverty.

The report found that locations that had no local newspaper presence had a poverty rate of 18 percent, higher than the 13 percent average nationwide. Residents were also typically older and less educated.

The reason, according to Stanford University economist James Hamilton, is that residents of low-income areas tend to be overlooked by advertisers because they’re less likely to buy subscriptions and have less access to digital media offerings.

Article by Cole Lauterbach with Illinois News Network. For more INN News visit ILnews.org

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