Who Should Benefit - Newspapers or Taxpayers?

Tucked in the recently passed 2013 California State budget is an item that might make Otis Chandler turn in his grave and cause every California newspaper publisher from Dean Singleton to Roy Herburger to look over their back.

The item inserted in the budget would essential allow CalTrans to bypass publication of bid notices in newspapers of general circulation. CalTrans argues that the bid notices placed on their website are widely available and that by eliminating the placement of these notices in the legal notices classified section of newspapers would save taxpayers $700,000 annually.

Naturally newspaper publishers are crying foul. Leading the charge on the behalf of newspapers is their trade association, the California Newspapers Publishers Association (CNPA).

The CNPA and its member are undoubtedly correctly perceive that losing CalTrans public notices could open the gate and lead to the elimination of other notices. Currently there is legislation being considered that would eliminate the so-called bulk sale notices.

Call it the domino theory of legal notices - one notice type falls and the pretty soon they all fall. It is already happening in Arizona, New Jersey and Utah.

For major daily's such as the Sacramento Bee or the LA Times, while any loss of advertising revenues continues their long slide down, this particular loss of revenue type is not a death knell. For smaller communities papers like our own hometown newspaper the Elk Grove Citizen, the possibility of losing public notice advertising is problematic.

Consider one type of notice that has ironically been a bonanza for several publishers in California - trustee sales notice. These are the notices that are published as part of a non-judicial foreclosure.

Currently the Elk Grove citizen charges $11 a column inch for a trustee sales notice and each notice has to be published three times. If you examine a typical copy of the Citizen you will find it has about 1,000 inches of foreclosure sales notices and other types of public notices.

Using the number of public notices column inches from the two most recent editions of the Citizen, the overwhelming majority of which are foreclosures notices, we find they had a total of 1,873 legal notice inches. Taking the Citizen's price of $11 per column inch for foreclosure notices and multiplying it by 1,873 we find that Ol' Roy generated about $20,603 in legal notices revenue for the week.

If we consider this a typical week, Ol' Roy looks to generate about $1,071,356 annually from government mandated advertising - not a bad haul at all! Ironically, Ol' Roy has repeatedly decried the socialism of the Obama administration while he gorges at the trough of government mandated advertising which looks and smells like a form of socialism.

For any publication, this is significant revenue. Now you can see why the CNPA, which the Herburger family has been active in, is howling.

The prospect of losing CalTrans revenues, which is essentially a government sponsored newspaper subsidy, could easily lead to other public notice advertising requirement going by the wayside.

So as the state budget moves across Gov. Brown's desk, it will be interesting to see if the CNPA prevails and convinces the Governor to use his line item veto power and pull this out. The question Brown will need to ask is what is more important - newspapers bottom lines or taxpayers wallets?