Legal Advertising Reformer

Page Four - Summer 2006

Legal Advertising Reformer

Providing Local Govt. With Consumers’ Rights:

Monopoly Bites Twice, - continued -

sales in a publication with over twice the audited circulation for nearly half the price of his current “legal” option, he is reminded that the current law strips his rights as a consumer. To better illustrate, consider that a local auctioneer conducting business in the free market economy can, and does, choose to deliver a similar announcement to 19,040 Adams County homes using the Gettysburg Area Merchandiser. Meanwhile, same day, same county, the official notice of legal auction, legally advertised in the best legal print option, The Gettysburg Times, will receive only 8,850 in-county circulation at almost

the public notice advertising that their local government paid for to inform them by law, must repurchase that information from each newspaper that sold the advertising to their local governments. Which paper? What day of the week? To be sure to find all of those notices, a taxpayer may need to buy and read each paper generally circulating in their community, on a daily basis. This legals treasure hunt is more than cumbersome, it can be downright costly. When the layers of puzzle-pieced municipal districts and authorities are met with the converging coverage of paid print, regardless of how small that might be, many citizens are forced to purchase two or more papers to gather all of their public notice. For many, the financial burden of two yearly subscriptions runs over $350. It’s akin to an open government surcharge, but the proceeds don’t go to Treasury. Simply because public notice advertising is prohibited by law from being placed in qualified free papers. Fortunately, the remedy is simple, and the bills are in committee. Amend Title 45 to read that a qualified publication that is delivered to the community for free is now allowed as an option for legal advertising.

The Legal Option to Choose Public Notice Vendors. ANYTOWN, PA - When the Tax Claim Bureaus of Berks and Lebanon Counties want to ensure that their Tax Sale Notice is truly reaching the entire community, they turn to Kapp Advertising’s weekly Merchandisers. When Highmark Blue Shield needed to share information this Spring about Medicare Part D coverage, and reach the largest possible audience in Adams, Berks, Cumberland, Dauphin, Lancaster, Lebanon and York Counties, they relied on the audited members of the Mid-Atlantic Community Papers Association. But when the Adams County Sheriff seeks to legally advertise

twice the price. This is the common plight of local government in Pennsylvania, as they remain handcuffed to outdated advertising options, and the burden to a home-grown publishing industry that is ready and able to deliver more for less. In Berks alone, the Greater Reading Area Merchandisers deliver to 97,830 county residents, 39,015 more than the Reading Eagle, the county’s largest paid daily. As the story repeats itself, county by county, the disparities are compounded on the most local levels, but a Borough Manager can only hope of legally using the Main Street merchant’s paper of choice.

Title 45: Are 1976 Standards Relevant, Enforceable? EVERYWHERE, PA - To be eligible to publish notice in 21st Century Pennsylvania, a product must be fixed in print, dated by edition, appear to be purchased by some, and contain a nominal amount of information beyond paid advertising. The presence of a price tag was the preoccupation of those last amending Title 45 three decades ago. At that time, the measures for non-advertising content, as well as all theoretical enforcement were passed off to the United States Postal Service, under the requirements for 2nd Class Mail, now Periodicals Mail. Ironically, a publication need not actually maintain Periodicals Mailing Privileges. By law, it only needs to determine itself “entitled to be entered,” or otherwise not have been “denied entry,” to Periodicals Mail Privileges. And any practical oversight is further diminished by the fact that the USPS does not actually maintain a database of publications currently qualified for Periodicals Mail. When Title 45 is distilled to postal standards, publications accepting notice must have a fixed price, distribute at least half of its copies at half-price or more, and have no more than 75% of its content devoted to advertising in more than half of the editions it publishes each year. Or, better yet, the publisher may determine the paper to be in theo-

retical compliance. With its ink spilled on “definite price or consideration,” “fixed price for each copy,” and “gratuitously, is not,” there was little left to fulfill the function of notice, which is to notify the public. The scope of the audience to be reached, those citizens with a vested interest in the notice, were dismissed with the language, “without regard to number....” It’s worth noting that municipal codes offer little more to the public. Township, County and School Codes, generally speaking, qualify a publication as a vendor if it appears to be a Title 45 “newspaper,” and is “generally circulating” within stipulated boundaries. While those to be notified were given short shrift, the reason for non-advertising content was never addressed before its measurement was punted to the federal government. The condition, itself, seems at odds with the purpose and placement of notice. Public notice is contracted, paid advertising, printed in classified advertising sections, positioned with articles for sale, services for hire, and general announcements paid for by members of the community to be delivered to members of the community. Then as now, legal advertising is far removed from narrative content in the final product offered to the public. And the 1980 decision in Bensalem Twp. School Dist. v. Gi-

gliotti Corp. made it loud and clear that news is absolutely not legal notification. No receipt? No notice! There is no known quantifiable correlation between existence of news in a product and the likelihood a paid announcement will be read. But there is common sense: A classified advertising section filled with paid submissions from local citizens is probably better read, as it is certainly better used, than a similar section containing mostly government mandated advertising. Even the paid paper industry recognizes that advertising is a separate and distinct component, with its own audience. To make this point, the Newspaper Association of America is currently spending $50 million, telling the world that “advertising” is “a destination” for most people. As part of the 30th Birthday Celebration for the Newspaper Advertising Act of 1976, a gift from the new millennium is in order. It’s a definition to supplement, not replace, the classic newspaper. A companion that brings new standards for accountability with audits, makes possible the delivery of notice to all stakeholders free of charge, and fulfills the intention that legal advertising is, in fact, advertising. And it’s use is only an option. We offer to Title 45, “community paper of mass dissemination.”

www.cvcaudit.com

www.macpa.net Prepared by Jim Haigh, Consultant to MACPA 610.965.4032 • [email protected] Data Sources: Audit Bureau of Circulations, Certified Audit of Circulations, Circulation Verification Council, Local Government Comission/LORL, Standard Rate & Data Service

Legal Advertising Reformer Promoting Cost-Effective Public Notice Through Market Competition

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Summer 2006

Local Govt. forced to spend $26 Million:

New study shows outdated provisions protect monopoly, increase costs! Most comprehensive analysis to date of PA’s local government legal advertising expenditures called “shocking!” HARRISBURG - The eye-popping costs, combined with the ever-shrinking paid circulation of newspapers, provide conclusive evidence that legal advertising reform is needed now. Current eligibility standards, as well as the process itself of notifying the public, has remained unchanged for three decades. The new report is entitled, “Cost Savings on Mandatory Legal Advertising by Local Government Entities.” This collaborative effort between the Local Government

Newspaper Pay Raise:

Is Title 45 a License to Print Money? HARRISBURG - The dusty provisions, last amended during the Ford Administration, which grant an exclusive monopoly to paid newspapers and force citizens to purchase those papers, also encourages charging government as much as possible. By law, the Commonwealth “... shall not prohibit the fixing of definite prices or sums for publishing official and legal advertising...regardless of rates established, fixed, charged or received for commercial, general or other advertising. The purpose of this subsection is to enable newspapers to take into consideration, as elements, when fixing advertising rates or charges, location of the advertisement in the newspaper, the purpose to be served, the character of the advertising, and that a newspaper is entitled to compensation for its readiness at all times to render an advertising service.” It’s no surprise that papers in Pennsylvania, like the Harrisburg Patriot, have gladly accepted this

invitation, charging government more than double its own going rate for car dealers. Keep in mind, this is for the same amount of ink on the same amount of paper. Economics 101 dictates that in a free market, such gouging should be thwarted by competition. But when over 3.3 million bona fide circulation is arbitrarily restricted from the legal advertising marketplace, the highest possible costs to government are preserved by law. Unless the monopoly is tackled, local governments will likely see their bills for legals climb beyond $26.2 million annually.

Commission, the Pennsylvania House of Representatives Legislative Office for Research Liaison (LORL) and the School of Public Affairs at PSU Harrisburg, is the most comprehensive and authoritative study to date on legals spending in Pennsylvania. With 2,608 completed surveys by local government, it calculates a staggering $26,259,325.00 are now spent annually by local governments, alone - this does not include Sheriffs, State Government, private enterprise and citizens. If the total tab reflected a legal notice process that reaches the largest audience possible at the most competitive price, critics would be compelled to swallow the inherent costs of open government. But the $26.2 million reflects neither, and also doesn’t account for the price citizens have paid to repurchase all that notice, by way of subscriptions and single copy sales. Notice is far from universally received, and with so many of the best local print options prevented from competing, the price is anything but competitive. The debate on internet notice is just beginning, but the full consideration of “community paper of mass dissemination,” is not complete. Reform is ready today.

Citizens hit not once, but twice, by legals monopoly! The $26+ Million legal advertising price tag is only half of the story. After taxpayers have paid to have their official notice published, they have to pay again to look for it in print. It could be called a doubletoll bridge to open government, where wallets and pocketbooks are

tapped twice over the same span. The same statute that protects paid newspapers from bona fide competition also guarantees that they will bill twice for disseminating the same public information. As a result, citizens hoping to find See Monopoly Bites Twice

HB 2834, SB 447

provide solution of competition:

lower costs, bigger audience, improved standards, ready now! HARRISBURG - Qualified free community papers deliver the promise of the internet today, fixed in print, dated by edition, delivering near universal access in the communities they serve, at no charge to the public, often at the lowest price to government. They bring new standards, with 100% audited circulation, along with their history of proven results on Main Street. Adding them as an option for those mandated to purchase notice could save local government as much as $13 million, according to some estimates. HB 2834 and SB 447 recognize the tremendous potential. The bills simply insert the definition of this bona fide alternative, “community paper of mass dissemination,” into the existing framework of Title 45. No new mandates, only new legal options for those seeking a larger audience or competitive prices for legal and public notices. Those seeking both could now find their new legal publication. For years, numerous measures have tried to nibble at the edges of the costly, outdated legal notice delivery process, all stalling without addressing the root cause of high prices and weak delivery: The paid print monopoly. The untapped resource of qualified, audited publications, or for their millions of readers, free community bulletin boards, is ready and waiting. Turn the spigot, and let the competition flow. Reform is only waiting on the votes.