Written by John Szozda
March 07, 2013
“I’ll give you my newspaper when you pry it from my cold, dead hands.”
The above paraphrase of a quote from the National Rifle Association should generate more passion than its more famous version which starts “I’ll give you my gun…”
If you value democracy, you should be concerned about Gov. John Kasich’s latest move to stifle the watchdog that warns you of attempts to increase your taxes and curb your Constitutional rights.
This latest attempt comes in the guise of balancing the state budget by taxing services to replace diminishing revenues from other sources. Gov. Kasich proposes a new tax on 81 services including hair care, funerals, cable-television, movie rentals, billiards, bowling, sports tickets and advertising.
Advertising—the life blood of a newspaper, your watchdog.
The Governor says this new revenue will allow him to cut the state sales tax from 5.5 percent to 5 percent and reduce income taxes. Most experts say the plan will benefit the rich and give little relief to the poor. According to Policy Matters Ohio, the top one percent of Ohioans will receive an average tax cut of $10,369, but those making between $33,000 and $51,000 will see an annual average increase of $8.
Most of you know about the plan. The news media has covered it extensively. You have until June to contact your state representative, write letters to the editor or protest in the streets in an effort to change this. That’s democracy, a dialog between the people and those who govern them.
But, what if you didn’t know?
What if that connection between you and government didn’t exist?
History shows people in power sometimes abuse it, or they just make mistakes. Here are three examples: Councilmen in Bell, California paid themselves $100,000 for part-time work before the media scrutinized their salary structure; The Chicago Tribune exposed faulty governmental regulation of toys, car seats and cribs which led to numerous recalls; and, closer to home, The Press examined the reasons why it took a life squad 28 minutes to respond to a man having difficulty breathing. The man died and the city changed its procedures to better protect its citizens.
The media provides that connection between you and government. While a newspaper is a business, it also is obligated by the United States Constitution to be your watchdog on government. As such, the press occasionally makes people angry.
Making people angry is not exactly a good business model and some advertisers leave when they don’t like what the press reports, reducing our revenue. Fulfilling our First Amendment obligation is what makes us different from other businesses and bolsters the case to keep our current sales tax exemption.
This is Gov. Kasich’s second attempt to constrain a newspaper’s ability to do its job for you. Two years ago, he wanted to change the requirements for legal notices. He proposed governments could meet their obligation by simply uploading legal notices on their websites and bypassing newspapers.
When is the last time you surfed a government website?
While this measure was supposed to save local governments money and the sales tax measure is designed to increase government revenue, both impact a newspaper’s ability to do its job.
The Great Recession had a negative impact on all business, including newspapers. The Governor now wants us to either absorb the sales tax increase in our costs, or pass it on to our advertisers. A five percent rate increase to our clients would be unprecedented in such tough times. Most would respond by cutting advertising, services, or jobs.
If newspapers absorb the increase, we would cut jobs, many of them in the newsroom. That’s good news for some politicians who want to do your business in the shadows, but bad news for you. According to a survey of 58 Ohio newspapers conducted by the Ohio Newspaper Association (ONA), some 600 newspaper jobs would be lost.
There are other troubling issues. Dennis Hetzel, executive director of the ONA, said, “It’s going to be a nightmare for national ad agencies to do business in a state as big and complicated as Ohio. Internet companies like Google and Amazon who don’t have a physical presence in Ohio will not be required to pay the tax. It’s a huge unlevel playing field with our Internet competitors.”
Hetzel also said the additional cost for local business would have a negative effect on the social fabric of the community. “When was the last time Google sponsored a little league team in your community,” he asks.
Three states—Arizona, Florida and Iowa—passed and then repealed advertising taxes after experiencing the negative impact on the local economy and the administrative nightmare it created. The Governor changed his position on public notices, even increasing the public’s right to know by extending the right to carry public notices to free newspapers, like The Press. He should find another way to balance the budget while protecting your right to public information.