What's behind the bill to pull legal ads from newspapers?

By Matt Arco | NJ Advance Media for NJ.com
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on December 14, 2016

A bill that would pull legal ads from newspapers could be voted on by the Assembly and Senate on Monday.

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TRENTON -- A bill that's being pushed by Gov. Chris Christie and that could cost New Jersey's newspaper industry 200 to 300 jobs is on the fast track in the New Jersey Legislature.

The legislation -- which would dismantle a state law that requires governments, businesses, and individuals to publish legal notices in printed newspapers -- is slated for committee votes in both chambers on Thursday and hit the floors of the Senate and Assembly on Monday.

Here's what to know about the issue:

What is a legal ad?

A notice that is required by law to be advertised in a local newspapers to meet public disclosure rules. Legal ads can be municipalities announcing government actions or disclosing delinquent taxpayer notices. They are not just placed by municipalities or government entities, businesses and individuals are sometimes required to place public notices.

Officials at NJ Advance Media, which provides content for NJ.com, The Star-Ledger and other affiliated newspapers, said 7 percent of total company revenue now comes from legal advertising. Of that amount, almost 80 percent is private sources. The rest comes from public sources -- municipal, county and state government agencies.

What does the bill do?

The legislation (S2855/A4429) would give municipalities the option to publish legal notices on government websites instead of in newspapers.

What's at stake?

The New Jersey Press Association estimates 200 to 300 jobs could be cut from the newspaper industry that's already reeling from a record decline in ad revenue if it loses public notice advertising.

George White, NJPA's executive director, says news coverage in the state could dwindle and the bill could shutter small weekly newspapers. He also argues the bill "destroys core principles of government transparency and openness" by giving municipalities the authority to police themselves. Online-only ads could be subject to change or deletion, he said.

The NJPA late Wednesday offered a compromise that would reduce fees for government notices by half and increase fees for privately paid notices. 

Are backroom deals being made between Christie and lawmakers?

Some lawmakers have questioned the timing and circumstances surrounding the bill's introduction, and have suggested deals are being made. 

"I have heard that there's conversations about linking staff salary increases to the legal ads bill. It's disturbing and the legislative leadership should be doing everything possible to get that genie back in the bottle," Assemblyman Jack Ciattarelli (R-Somerset) said. "It's the worst kind of horse trading and I want nothing of it."

He referred to a bill that would let Christie profit from a book is tied to a proposal to increase lawmakers' staff salaries.

"What does any of it has to do with no longer putting legal ads in newspapers? The way it's done is already suspect," said Sen. Loretta Weinberg (D-Bergen).

What do advocates say?

The bill has been floated in the past and is not a new issue.

Proponents argue posting notices online would save municipalities money because they wouldn't have to pay newspapers fees to place the ads. Some advocates have likened the requirement for legal ads in newspapers as a subsidy for the industry.

Plus, the bill gives the municipality the option to pull from newspapers or continue sending them its ads, Michael Darcy, executive director of the New Jersey State League of Municipalities, which supports the bill, said.

"The League appreciates the larger goal of making more efficient methods available for municipal operations," Darcy said.

"This legislation offers that and we support that goal," he said. "We also particularly support the permissive nature of the bill. If a community finds this method is not achieving the goals, they can opt out."

Are legal ads already online?

Yes, the NJPA maintains a searchable database of all legal ads placed in New Jersey newspapers at www.njpublicnotices.com.

Would pulling legal ads from newspapers save municipalities money?

That depends who you ask.

Advocates say it would because municipalities could post notices online and wouldn't need to spend anything on advertising. However, the municipality would have to create a "notice website," that would have to be secure and searchable. The NJPA association argues that would cost money to establish and maintain.

Neither the bill's backers or the state's league of municipality have estimates for what that could cost.

In 2011, the state's Office of Legislative Services said it "would have an indeterminate cost" to local governments, according to the NJPA.

How much do municipalities spend?

In 2015, 147 municipalities in the state paid a total of $1,051,085 in legal ad costs, averaging $7,150 per town, according to the state's league of municipalities.

The league didn't have full figures because not all of the state's 565 municipalities responded to its survey, the group said. It conducted a survey that year at the request of Gov. Chris Christie.

The governor's office said on Tuesday more than $80 million is paid annually by taxpayers and private businesses to publish legal notices. It based its figure off of "an internal tally of a sampling for daily newspapers," but didn't say which newspapers, how many it sample nor did they provide any additional documents to support the figure.

The governor's office also hasn't given a public-private breakdown of its figure. (The state's league of municipalities doesn't keep a public-private breakdown.)

NJ Advance Media officials said nearly 80 percent of its legal ad revenue is from private sources and the remaining comes from municipalities and governments. Seven percent of the company's revenue comes from legal ads, but officials haven't tied a dollar amount to the 7 percent figure.

What about private legal ads?

The bill would allow businesses to place the ads for free.

But the the NJPA calls the move "dumfounding" since it doesn't take into account the infrastructure, personnel and technology requirements to post legally required public notifications.

"It's not just uploading something to your Facebook page," White said. "They have not studied it."

Earlier this week, the state league of municipalities said the issue had not been hashed out.

"With regard to municipalities keeping fees from private legal ads, that is a question we are parsing the sponsors," Darcy said. "How would the fee be established, etc."

Who is pushing the legislation?

The bill in both the Assembly and Senate have two prime sponsors from lawmakers representing both political parties. Sens. Mike Doherty (R-Hunterdon) and Jim Whelan (D-Atlantic) are sponsoring it in the Senate and Assembly Speaker Vincent Prieto (D-Hudson) and Assemblyman Jon Bramnick (R-Union) are backing it in the lower chamber. With the exception of Prieto, all of the backers have sponsored similar legislation in the past.

But the driving force behind the legislation that has been fast tracked through the Legislature at the end of the year is Christie, lawmakers and local officials confirmed.

Christie has had a rocky relationship with the state's press.

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