The Maryland-DC-Delaware Press Association executive director’s op-ed attacking House Bill 1258 (“Preserving local journalism: Why governor must veto HB1258,” April 22), which sought to reduce multi-million-dollar government subsidies to local newspapers with substantial monopoly power, was highly misleading.
The government mandates that both private businesses and government agencies place legal notices in local (mostly monopoly) newspapers. This notice system has become the most profitable part of local newspapers, hence are as aggressively guarded by them as a female bear protecting her cubs.
From the standpoint of industrial economics, legal ads are a wildly profitable business because 1) the government mandates that its customers must find and pay the business, 2) the business is a local monopoly, so customers cannot comparison shop (in the law’s words, it has to be a newspaper of “general circulation”), and 3) the cost of the product is negligible in comparison to the revenue it generates.
HB 1258 seeks to reform this wasteful and socially harmful system for only a small fraction of legal ads — those related to publishing estate-related information for potential beneficiaries and creditors.
In this case, the legal notice tax is effectively paid by estate beneficiaries, not the government, which passes the costs on to the beneficiaries. Like the other groups that must pay for legal notices, these beneficiaries have no practical way to defend their interests, so are an easy target to fund this industry subsidy.
he author claims that the current system of legal notices has “served our communities well for decades.”
But this has as much credibility as claiming that the old system of newspaper classified advertising — which has become obsolete because of far more efficient methods of advertising jobs, homes, and other products — should be protected by government regulation.
The author contends that the current legal notice system fosters government “transparency” and “accountability,” but it has done the opposite. The system itself is incredibly opaque, with local newspapers refusing to publicly disclose their revenue from legal notices. It is so poorly designed that it effectively hides the information from the people it is intended to benefit.
Source: Snider, J.H., Legal notice system is wasteful and obsolete, Frederick News-Post, May 13, 2024.
