Did you know that government borrowing costs increase in the long run after a newspaper closure?

While local media in Louisville remains strong, America’s newspapers at the state and local level are collapsing across the country. That’s a great loss to democracy, but it also comes at a monetary cost for the city, according to the report “Financing Dies in Darkness? The Impact of Newspaper Closures on Public Finance.”

Towns and cities borrow money, just as you borrow money from a bank to buy a house, to fund police stations, construction, etc. Taxpayers pay off these loans over time, just as homeowners pay off their mortgages.

When a bank realizes that a loan is riskier — one of the results of not having local newspapers around anymore to hold government officials accountable — the borrowing costs increases.

Let’s say a local government gets a loan for $65 million. If the bank sees risk, the borrowing cost for governments increases by about 0.1 percent. If the cost of a loan goes up by 0.1, in the case of that $65 million loan, that’s about $65,000 more that taxpayers have to pay every year.

Louisville is extremely lucky — local media is saving our city thousands of dollars. It’s vital that local news remains vibrant.

Help our city by supporting Insider Louisville’s reporting

Insider Louisville wants to continue to be the local news source that informs and enlightens our citizens. You can help make sure we continue to hold government accountable by making a one-time donation or becoming a sustaining member. If you do it before the end of the year, NewsMatch will double individual gifts up to $25,000.

At Insider Louisville, we dig deeper, ask more questions, and seek experts to add analysis and context to the issues that our readers – Louisville’s stakeholders – care about the most. Our mission is to inform these readers with impactful, public-service journalism so that they can help shape outcomes. Our goal is to raise the level of civic engagement in our communities and to be an indispensable source of information about local business, government, education, health, and culture.


Comment

Facebook Comment
Post a comment on Facebook.