Report: Newspaper closures increase size, cost of local government

SPRINGFIELD, Illinois (Illinois News Network) — 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.

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.”