A small newspaper says it’ll go out of business if Cooper doesn’t veto this bill

The Jamestown News used its front page this week to fight a bill that could move legal notices out of newspapers and onto government websites.

“Trudy Wade’s bill will close Jamestown News,” the headline says, calling on readers to lobby the governor. “Governor’s veto is our last hope.”

The newspaper, which has covered the small Guilford County town since 1978, worries the potential loss of legal ad revenue could force it to lay off five staffers and cease publication.

“I’d like to think the community would be devastated,” publisher Charles Womack said, noting that larger papers don’t have the resources to cover Jamestown, which has a population of about 3,800.

The final version of the bill, tacked onto a worker’s compensation bill and passed in the final hours of this year’s legislative session, would let local governments place legal notices on their own websites.

Supporters argue that the online system would save taxpayer dollars spent on newspaper ads that they say few people actually read, while opponents said the change would imperil “the public’s right to know” by burying information on government websites.

The city of Greensboro spent about $69,000 on legal ads in the past fiscal year to advertise public hearings, government contract bidding, and other matters. That’s about 0.014 percent of the city’s annual budget of nearly $500 million.

Guilford County did not respond to an inquiry about how much it spends on legal ads.

Womack estimates that about half of legal advertising in the county comes from governments, while the other half is from attorneys and individuals who are required to run ads about foreclosures, estate sales, and other legal proceedings. Most of the legal ads in the Jamestown News are in the latter category, he said.

Under the bill, a county government could sell legal ads on its website, fulfilling the public notice requirement. Half of the money raised would go to fund teacher salary supplements, while the county government could use the rest for other purposes. Womack said it’s unfair for government to take business from newspapers, which he argues contradicts the small-government views expressed by Republicans like Sen. Trudy Wade.

“In each county, there’s competition amongst newspapers to price these things in a conservative way,” Womack said, adding that he worries that county government – without a print newspaper to produce – could undercut newspapers’ rates, drive them out of business and create a monopoly for counties.

Rep. David Lewis, a Harnett County Republican, worked on the compromise version of the bill with Wade. He said he’s skeptical of Womack’s claims that the change would drive newspapers out of business because most have other revenue sources.

“I think it’s a little bit of a stretch to say that the governor’s pen on a paper spells doom for this Jamestown newspaper,” Lewis said.

Lewis said House legislators successfully softened Wade’s original proposal to make the change statewide. “In a more rural county like Harnett, I would be concerned that not all of the citizens have access to internet” to read online notices, Lewis said. “I have to believe that more urban counties may in fact not have that drawback. Frankly, this will be an experiment to see how well or how badly this works.”

The bill would also change the requirements governing which newspapers can publish legal notices, prompting concerns from the N.C. Press Association. The new requirements appear to allow local governments to use a statewide newspaper, such as the North State Journal, instead of local newspapers, by eliminating a requirement that the newspaper have its postal permit in the county where the local government is located. The postal requirement ensures that newspapers are based in the counties where they accept legal ads.

The North State Journal is published by Neal Robbins, a former staffer in Gov. Pat McCrory’s administration. Rep. Justin Burr, a Stanly County Republican, is an investor in the paper’s parent company, according to Burr’s ethics filings.

Asked if the change will allow the North State Journal to run more legal ads, Robbins said in an email that “we will take any advertising that comes our way.” Robbins did not respond to a follow-up email asking if he, Burr or any other investors in his paper provided input to lawmakers on the change.

Another provision in the bill addresses how newspaper delivery workers are classified as independent contractors for worker's compensation issues and other purposes. The final version weakened an initial Senate proposal to require that newspapers include carriers in workers’ compensation insurance, unemployment and payroll tax payments. But the bill still ends what's known as a “rebuttable presumption” in legal proceedings that newspaper carriers are typically considered independent contractors. That means it could become easier for a newspaper carrier to claim they should be considered an employee.

Rep. Allen McNeill, a Randolph County Republican and sponsor of the original worker’s compensation bill, said current law gives newspapers “a special exemption that nobody else in the state has.”

Michael Zinser, an attorney who represents newspaper companies in independent contractor matters, said the change would open the door to lawsuits by newspaper carriers challenging their contractor status. “If challenged, most publishing companies will be able to prevail on the issue,” he said in a letter to N.C. newspapers. “The bad news is they will have to go through the expensive process of litigation.”

Zinser urged publishers to make sure their independent contractor agreements “have been drafted to put their best foot forward,” with language that makes clear that carriers provide their own supplies and transportation, and have the “right of substitution” to send another contractor to fill in and do their work. Cooper hasn’t said if he plans to veto the bill, and he has until the end of the month to take action.

This story was originally published July 14, 2017 at 10:55 AM with the headline "A small newspaper says it’ll go out of business if Cooper doesn’t veto this bill."