A new report released Wednesday found that a lack of robust news sources was costing American taxpayers an estimated $1.1 billion a year in added fees and interest penalties to local governments, with Texans shouldering a full $132 million of that burden alone.
Texas ranked second in the nationwide survey behind New York ($152 million), with Alabama ($104 million), Georgia ($49 million) and Maryland ($48 million) rounding out the Top 5 nationally.
On a per household basis, Texas still ranked tops nationally at No. 5 ($62 annually), trailing New Hampshire’s costs at $85 per household per year, Alabama at $84, New York at $76 and Wisconsin $70.
The study was released June 10, and headed by Matthew Baker, research director with Rebuild Local News, a nonprofit focused on advancing public policies to counter the collapse of local news and revitalize community journalism, and an entire team of the nation’s top economics scholars headed by Dermot Murphy, a finance professor at the University of Illinois in Chicago.
The current study builds on another comprehensive research project completed in 2020 led primarily by those in the finance sector, who investigated what impact local news markets played on things like bond ratings and interest rates in comparable towns and cities across the United States.
Those bond ratings and interest rates impact how local governments — everything from cities, counties and schools to hospitals, law enforcement and public utilities, which in turn affects costs of everything from health care to transportation, even the very water we use daily — borrow money for major projects.
In 2020, researchers found that borrowing costs could increase by as much as 5 to 11 basis points, or an average of $650,000 per loan, all based on the strength of the borrowing entity’s local news market.
In other words, after comparing hundreds of like-sized communities, demographics and project scopes, researchers found that areas with strong, robust news markets saved money over places with weak or no coverage at all, something they now refer to as a “news desert.”
The reason for the discrepancy in numbers is that financial lenders view news entities as an accountability safeguard for how those lent dollars are ultimately spent.
The study found that lenders are more likely to seek higher interest rates as compensation for the risk of lending to unmonitored local governments because a lack of news coverage opens the opportunity for such places to engage in wasteful spending, left unchecked.
The newly released 2026 study helped to better monetize those earlier findings into numbers that were far simpler to digest.
“When viewed through a fiscal lens, public investment in local journalism can lead to significant cost savings for local governments and taxpayers,” Baker wrote in the conclusion of his report. “Stabilizing local watchdog reporting can produce measurable public benefits by reducing borrowing costs and recovering dollars otherwise lost to higher borrowing costs.”
The question for state policymakers, he continued, is not whether journalism investment pays off — this report shows it does, most clearly in the form of borrowing costs for local governments and likely across other areas of public spending as well — but whether states are willing to pay more for costs embedded in a system where some residents get less accountability coverage than those in other communities.
“The costs associated with the loss of local news are real and measurable, and ones that states cannot afford to ignore,” Baker said.
Check out the latest study findings at https://www.rebuildlocalnews. org/ local-news-shortage- leads-to-1-1billion-in-extraborrowing-cost sfor- local-governments- and-taxpayers/
