A bill that would have saved local newsroom jobs in Washington was killed by legislators, who prioritized spending billions more to keep growing state government.

Senate Bill 5400 would have collected around $25 million a year from online search and social media companies through a business tax surcharge. Proceeds would have gone to print, digital and broadcast news outlets to help sustain local journalism.

The approach makes sense because search and social media companies benefit from news content. Google has been found guilty of harming publishers through illegal conduct.

Despite strong support from the public and bipartisan sponsorship, SB 5400 died at the finish line in the Senate Ways & Means Committee.

Legislators still raised taxes on tech companies, and thousands of small businesses that advertise via their platforms, through a separate bill rushed through before the session ended Sunday.

Senate Bill 5814 is a hodgepodge. It extends sales taxes to services including custom software, tech services and advertising.

The opening paragraph of SB 5814 said it’s about “funding public schools, health care, social services, and other programs and services to benefit Washingtonians.” But really it was a way to continue growing overall government after Gov. Bob Ferguson ruled out a wealth tax.

SB 5814 will collect $2.9 billion for the general fund over the next two years, none earmarked specifically for education, health care or social services, according to its fiscal note.

That covers half the $6 billion in additional spending, over the previous two years, in the Legislature’s new biennial budget. It will also provide roughly half the $9 billion in additional spending (not counting transportation) budgeted over the next four years.

Yet SB 5814 may create uncertainty for the budget because parts will likely be challenged in court.

Maryland is a cautionary tale. It passed the first gross-revenues tax on advertising in 2021 and the policy is still being litigated.

Washington’s new ad tax opens that door wider than a 747 hangar.

“I’ll look forward to the lawsuit,” Steve Kranz, a Washington, D.C., lawyer specializing in state taxation, told me Tuesday. “If states follow Maryland legislatively, they’re following them to the courthouse as well.”

Kranz represents tech companies and regularly speaks to the National Conference on State Legislatures’ taxation task force. He’s also representing plaintiffs fighting Maryland’s ad tax.

Several other states are considering ad taxes but Kranz suggests they all wait to see whether Maryland’s survives. If Maryland loses in court, it will have to repay millions, plus interest, to payers of the tax, he noted.

Washington legislators exempted newspapers and broadcasters from the ad tax, which is appreciated.

Still, taxing advertising reduces the pool of what’s available to support local journalism, because the state’s taking a roughly 10% cut of small businesses’ ad spending.

I’m opposed to ad taxes on First Amendment grounds. Advertising is a form of speech, and it’s wrong to tax speech. That was the position Ohio’s Supreme Court took in 2021, when it barred Cincinnati from taxing billboard advertising.

A federal judge last year decided Maryland’s tax didn’t violate the First Amendment but her decision was appealed. Separately, more than a dozen state suits against the tax begin hearings this summer.

One issue is whether Maryland can bar companies from listing the cost of the tax. I’m with the companies here; government shouldn’t tell them what they can or cannot say.

This issue surfaced in the White House on Tuesday when Amazon was accused of a “hostile” act because it was reportedly going to note tariff costs in product listings.

It turns out Amazon isn’t going there, and Jeff Bezos and President Donald Trump talked it out. I hope Bezos and Amazon defend their right to publish what they want and not be bullied by politicians who want to obscure the impact of policy decisions.

Washington’s new ad tax has a different problem. Legislators may have teed up a lawsuit by exempting some forms of advertising.

“The bottom line,” Kranz said, “is that any state that taxes digital advertising without taxing similar things that exist in the physical world — like newspapers, magazines, etc. — they face a challenge under a federal law called the Internet Tax Freedom Act.”

So the state could end up spending millions, for years, to defend SB 5814.

Imagine what that kind of money could do to help save what’s left of Washington’s local news ecosystem. Or if legislators spared 0.8% of their new spending to fully fund SB 5400.

Backers of SB 5400 may try again next year.

But it will be harder now that the state is heavily tapping tech companies to fund its own growth, and prompting a battle royale over how it taxes them.

New advocacy group: It’s too late for this year’s Legislature but a new coalition was just formed to advocate for local newspapers at the state and national levels.

The coalition was announced Friday by America’s Newspapers, a group representing mostly independent, family-owned publishers of about 1,800 newspapers in the U.S. and Canada.

ANSAC (America’s Newspapers State Advocacy Coalition) includes 14 state press associations to start but more expressed interest since the announcement, according to Dean Ridings, America’s Newspapers CEO.

The coalition is partly a response to nonprofit news advocates being increasingly dismissive of for-profit news outlets, even though for-profits do most local reporting.

Ridings said he welcomes “emerging players in the journalism ecosystem” and they bring great value.

“But I have also seen a trend in the last couple of years where for-profit newspapers have been demonized and frankly, the incredible work that they are doing has been negated to a certain extent,” he said. “I felt like for-profit newspapers, your legacy newspapers, where really 90% of the journalists are based, they needed a little louder voice, just to come together and tell the great work they are doing.”

This is excerpted from the free, weekly Voices for a Free Press newsletter. Sign up to receive it at the Save the Free Press website, st.news/SavetheFreePress. Seattle Times’ Brier Dudley is the editor of the Free Press Initiative, which aims to inform the public about issues facing newspapers, local news coverage, and a free press. You can learn more about the Free Press Initiative, or sign up for a newsletter, at https://company.seattletimes.com/save-the-free-press/.