Newspapers retain revenue as towns lose fight for legal ad ‘mandate’ relief

On an issue pitting struggling newspapers against financially-strapped towns, the General Assembly has come down on the side of the press–at least for this year.

The state’s newspapers held on to an important source of revenue as the legislature rejected pleas from municipalities to relax the rules on legal advertising and allow them to post official notices on their websites rather than in print.

Municipal officials say the state laws requiring them to advertise meetings, bid solicitations and other official actions in newspapers constitute an unfunded mandate that they can’t afford, and that is unnecessary in the Internet age.

“Should we really be paying all this money when we have our own financial problems? I don’t think so,” said Melody Curry, the mayor of East Hartford. She estimates her town spends up to $100,000 a year on legal advertisements.

Statewide, the Connecticut Conference of Municipalities estimates, it costs towns at least $2 million each year to post notices in newspaper classified sections.

Two proposals — one by Gov. M. Jodi Rell and the other by the Government Administration and Elections Committee — would have allowed towns to post all notices on their Web sites rather than buying legal ads.

However, last week the Planning and Development Committee rejected Rell’s proposal, and the GAE committee approved a measure that would only allow bid solicitations to be posted on line.

Leaders of the two committees said the fact that newspapers are suffering from eroding readership and advertising was not a factor for continuing the requirement for towns.

Rep. J. Brendan Sharkey, co-chair of the Planning and Development Committee, said few people would actually go searching online for legal notices.

“The problem is not whether we should do away with the mandate but whether there is a feasible alternative,” the Hamden Democrat said. “Until we have one we cannot change this.”

“The driving issue is the public’s right to this information. Clearly newspapers are struggling, but this was not based on their financial stability,” said Rep. James F. Spallone, the co-chairman of the GAE Committee from Essex.

But the financial realities clearly were a concern for newspaper publishers, who said the loss of legal advertising revenue could be fatal for their papers.

“It is a meaningful revenue source, said Chet Valiante, publisher if The Norwalk Hour and president of the Connecticut Daily Newspaper Association. “We know a significant number of full-time jobs would be eliminated if they were no longer required.”

Jim Leahy, executive director of CDNA, said The Hartford Courant told him elimination of legal ads would result in layoffs, and the New Britain Herald and Bristol Press might be forced to close.

The publisher of The Chronicle in Willimantic, Kevin Crosby, said about 10 percent of his daily newspaper’s advertising revenue comes from legal ads, and loss of that income would make it hard to keep operating.

But Leahy–and the full-page ads newspapers have been running to oppose change in the legal notices law–emphasized the right to know rather than the revenue.

“We are very willing to admit it does impact our bottom line. But we shouldn’t be doing a cost-benefit analysis when we are talking about the erosion of the public’s right to know,” said Leahy.

The in-paper ads convey the same message.

“Public notices are an important tool in assuring an informed citizenry,” one advertisement reads. “Newspapers are easily verifiable, fully transparent and represent a secure third party who has nothing to gain from any notice. Connecticut’s recent ethical lapses shed a glaring light on the full meaning of this problem.”

Connecticut Conference of Municipalities’ executive director, James Finley, said he is not surprised legislators decided not to approve the bills.

“We went up against a very powerful lobby, and lost. I did not expect to find the traction when going head to head with newspapers,” he said last Thursday following the vote.