Newspaper Stack

Education has the three R’s — reading, ‘riting and ‘rithmetic.

In community journalism we have four R’s — recognition, recreation, right to know and responsibility.

Basically they are the four categories we try to cover in reporting on a community. If every story or photograph we do can relate to at least one of these categories, then we have done our job. If a story can touch upon all four, then we’ve hit the jackpot

Recognition has to do with stories related to someone accomplishing something. This can range from a feature story on a war hero to a photograph of a high school honor student. Because we still have a gatekeeper mentality, the accomplishments we report on are recognized as more than just padded resume fillers.

Recreation is advance coverage of entertainment, such as concerts and art shows, as well as outdoor activities. These can involve features on the latest school play or outdoor trend. It is meant to help our audience plan their activities.

Right to know is exactly what it says. You have a right to know who has been arrested in your neighborhood and for what charges. You have a right to know what your local government is doing and how much it is paying to do it. And you have a right to know how many accidents occur on the freeway you drive every day to and from work.

Responsibility is the coverage we are obligated to do out of our role as watchdog. This may mean sitting through many boring city council or school board meetings. But we do it out of our definition of what it means to be a community newspaper. Besides, who knows what government will do if we didn’t regularly go to these meetings?

Well, a new study shows what government does do when reporters aren’t at their meetings — they raise your taxes.

According to new research, cities where newspapers closed down saw increases in government costs as a result of the lack of scrutiny over local deals.

College researchers who tracked the decline of local news outlets between 1996 and 2015 found that the loss of local news coverage in communities was followed by higher long-term government borrowing costs.

Kriston Capps, a staff writer for CityLab, which covers architecture and politics, wrote an in-depth article on the study, which was done by economists, not journalists.

Paul Gao, an associate professor of finance at the University of Notre Dame and one of the paper’s authors, told Capps he was inspired to look into the issue after an episode of “Last Week Tonight with John Oliver” about the news industry.

The research covers 1,596 newspapers serving 1,266 counties in the U.S. over the study period.

By examining local municipal bond data, the researchers were able to draw a correlation between local newspaper closures and public finance outcomes. In the three years following a newspaper closure, the costs for municipal bonds and revenue bonds increased for these cities.

“There are already papers that show that there are political consequences, or political outcomes, when local newspapers close,” says co-author Chang Lee, assistant professor of finance at the University of Illinois at Chicago. “But that’s not really a direct impact on local residents. We wanted to show that, if you look at the municipal bond market, you can actually see the financial consequences that have to be borne by local citizens as a result of newspaper closures.”

The research showed that three years after a newspaper closes, that city or county’s municipal bond offering yields increased on average by 5.5 basis points, while bond yields in the secondary market increased by 6.4 basis points — statistically significant effects.

As a result, the communities paid higher taxes.

Capps reported that a local newspaper provides an ideal monitoring agent, as mismanaged projects can be exposed by investigative reporters. When a newspaper closes, this monitoring mechanism also ceases to exist, leading to a greater risk that the cash flows generated by these projects will be mismanaged.

The team presented its findings at the Society for Financial Studies Cavalcade at Yale University in May.

“Our analysis suggests that newspaper companies, or the information they provide, is a public good and it’s worth providing,” Lee says. “But if we don’t finance it, no one will produce it.”

In other words, Americans can pay for a subscription now for a few dollars a month, or spend thousands in higher taxes later.

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Andy Howell can be reached at ahowell@pinalcentral.com.

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