Paid circulation newspapers and their highly paid lobbyists are wailing and gnashing their teeth over the passage of a bill sponsored by state Sen. Trudy Wade that primarily does two things concerning newspapers.
One, it removes a state statute for newspapers that decreed that people who deliver newspapers are not employees.
Newspapers have a special exemption to the laws governing employees passed for their exclusive benefit and to the detriment of newspaper carriers. It prevents newspaper carriers from receiving the protections and benefits of employees, such as insurance and retirement plans. It also means that newspaper carriers don’t get half of their Social Security and Medicare tax paid for them by their employer but have to pay the full amount themselves as independent contractors. And it means that the newspapers don’t have to pay unemployment taxes on the newspaper carriers, so newspaper carriers, defined by law as independent contractors, cannot collect unemployment if they lost their jobs.
In short, it is a great deal for newspapers and a bad deal for newspaper carriers. The bill, HB205, was passed by the legislature last week, but has not yet been signed into law by the governor, and some expect the governor will veto the bill.
When newspapers were delivered by boys on bicycles, the special exemption may have made sense. But times have changed. Very few newspapers are delivered by boys on bicycles. They are delivered by men and women in cars who have far bigger routes than the newspaper boys ever had; and carriers don’t collect the subscription money anymore, that is mainly done by the newspaper.
But newspapers want to keep their exemption from the employment laws that apply to every other business because it saves newspapers a lot of money.
Wade said that she sponsored the legislation in part because of a series that ran in the Raleigh News & Observer and The Charlotte Observer on construction companies improperly classifying workers as independent contractors when they should have been classified as employees.
The series was critical of this abuse of workers in the construction industry, but the same newspapers don’t feel the same way about their own industry. It appears to be a bad case of hypocrisy.
While newspapers have in fact been obeying the law, it’s only because the newspaper lobby was strong enough to get a special law passed through the Democratic legislature 20 years ago that exempted newspapers, and only newspapers, from being required to comply with the laws governing employees. Because, well, because newspapers think they deserve special treatment and in the past the Democratic legislature was more than willing to give the newspapers, which routinely endorsed Democrats, that special treatment.
Now with Republicans in control of the legislature, and mainstream newspapers continuing their liberal ways, it should be a new day in Raleigh, but the newspaper lobby is still immensely powerful.
If HB205 is signed into law, newspapers will be treated like every other business – something newspapers and their lobbyists say is unfair.
It’s also worth noting that these same newspapers are highly critical of the powerful lobbyists for other industries, but as far as their own powerful lobbyists, well, they think they are just fine.
In addition, HB205 has a pilot program for Guilford County that would remove the state-mandated monopoly for paid circulation newspapers on legally required advertising, whether it is placed by the government or by an attorney.
This bill removes that state-mandated monopoly for legally required advertising in Guilford County and would allow governments and attorneys to place the ads on the Guilford County website.
The law doesn’t require advertising on the Guilford County website but allows that option if Guilford County chooses to put the infrastructure in place to accept the advertising.
It provides some competition for the advertising, something that is generally believed to be good, and results in lower prices, which is one reason monopolies are for the most part illegal.
Guilford County will charge a fee of $10 for other governments, such as Greensboro, who choose to place legally required advertising for public hearings, zoning and economic development and other matters on its website. For legal advertising, such as foreclosures, the fee is set at $450, and other legally required advertising other than by the government the fee is $100.
Greensboro could meet the legal requirement for advertising by placing an ad in the News & Record if it chose. Attorneys would have the same choice, but they would have an option that is currently not available.
Paid circulation newspapers are outraged at this proposed pilot program in Guilford County because they fear it will spread statewide, taking millions of dollars out of the pockets of newspapers and giving it back to the taxpayers.
What the new law will do in Guilford County is introduce some competition in the legal advertising world, something paid circulation newspapers are adamantly against. The bill also requires that 50 percent of the money paid for advertising on the county website be allocated to the schools for teacher supplements.
For instance, under the current law, if the City of Greensboro were holding a public hearing, which by law has to be advertised, it could place a notice in all the water bills that the city sends out each month, send a letter to every registered voter in the city, buy space on 20 billboards, advertise on all the local television and radio stations and buy full-page ads in all the free publications distributed in the city, but the public meeting would be illegal because the city had not met the legal advertising requirement. However, if it placed an advertisement in the News & Record, it would meet the legal requirement. If the idea is letting the public know – as the paid circulation newspapers are claiming – does that make any sense at all?
Paid circulation newspapers are taking hypocrisy to new heights in their opposition to this part of the new law. Paid circulation newspapers claim that their concern is informing the public as far as legal and government notices go. Paid circulation newspapers, with no statistics to back them up, are claiming that more people see the legally required advertising in paid circulation newspapers than will see them on the Guilford County website. They state that not everyone has access to the internet, which is certainly true, but not everyone subscribes to the newspaper either.
It would actually make more sense if the legal requirement could be met in free newspapers, but changing the state statute to allow that has never made it out of committee because the paid circulation newspaper lobby is so powerful.
The original bill introduced by Wade was for this change, which allows legally required advertising to be on county websites, to be statewide, but the paid circulation newspaper lobby got that stopped. The lobbyists managed to scare away enough votes that the bill was reduced to a four-county pilot program, and even that was considered too radical, so that was reduced to one county. Guilford County was chosen because the bill was sponsored by Wade, who is from Guilford County. And it makes sense for the pilot program for a bill Wade sponsored to be in her home county.
What reveals the truth about this issue is that Guilford County currently runs much of its legally required advertising, not in the News & Record with a circulation of about 40,000, but in the Jamestown News, which doesn’t publish its circulation figures. But the total population of Jamestown is about 3,400 and the number of homes in Jamestown is 1,380. If every single homeowner in Jamestown subscribes to the paper, that would give it a circulation of 1,380, and everyone in Jamestown doesn’t subscribe.
So being generous and assuming a circulation of 1,000, advertising in the Jamestown News meets the legal requirement for legally required advertising in a county of over 500,000.
Guilford County for years ran pages of advertising in the News & Record to list people who had not paid their property taxes, as is required by law and the cost was about $90,000 a year. To save money and meet the legal requirement, Guilford County a few years ago started running the list in the Jamestown News at a cost of about $5,000 a year. The idea was not to inform the people of Guilford County but to meet the legal requirement, and the state statute is so out of date that advertising in the Jamestown News met the legal requirement.
It’s all about money, as the publisher and owner of the Kernersville News, John Owensby, told the committee considering bill. He said that without this state mandated monopoly on legal and government advertising he could go out of business.
The North Carolina League of Municipalities and the North Carolina Association of County Commissioners support Wade’s bill.
When the law requiring advertising was first passed decades ago, it made sense to require newspaper advertising. Television had not yet been invented. Today, not only do we have television, we have the internet, which is where more and more people are getting their news.
Most people don’t read the foreclosure ads run by attorneys and few read the advertisements run by the governments. Those who are interested know to look for them in Guilford County in the Jamestown News or the News & Record. For most people it would be easier to simply to check the Guilford County website.