BY JIM DOOLEY – State spending on legal advertisements will top $1 million annually by 2013 under new rates imposed by the Honolulu Star Advertiser since it became only daily newspaper on Oahu, according to state purchasing records.
The new ad rates will be three to five times higher than what was charged before the Honolulu Advertiser closed its doors
last year.
But the charges are substantially lower than what the Star Advertiser first proposed collecting last year and are far below what the newspaper assesses the general public.
The state said last year it was considering proposing changes to state law to allow electronic/online publication of legal ads but Gov. Neil Abercrombie’s administration did not introduce such a bill.
State Sen. Sam Slom, the sole Republican in the Senate, did offer such a measure but it did not receive a hearing during the past legislative session. Slom is a supporter of, and contributor to, Hawaii Reporter.
According to paperwork posted on the State Office of Procurement’s website, the state has tentatively agreed to new Star Advertiser legal ad rates which will bump costs from $757,000 now to $1,052,600 by June 30, 2012, a 39 per cent increase.
And the $757,000 current expense figure used in that calculation is based on interim price increases charged by the newspaper since last year after it became the only newspaper in town.
National media analyst Rick Edmonds told Hawaii Reporter last year that increased ad rates are expected after newspaper closures or mergers.
“A consolidation of previously competing papers almost always brings rate increases,” said Edmonds, an analyst for the Poynter Institute in Florida.
Some states have tried to reduce their legal advertising costs by “allowing electronic alternatives” to print publications, Edmonds said.
But newspapers “typically lobby for protection” against such alternatives, said Edmonds.
The new schedule of advertising charges has been proposed by state Comptroller Bruce Coppa to Chief Procurement Officer Aaron Fujioka under a section of law which allows contracting without competition.
“It has been determined that it would not be practical to rebid this service as Oahu Publications (owner of the Star Advertiser) is the only daily newspaper for Oahu, Molokai and Lanai,” Coppa said in the proposal.
The state has other contracts in force for publication of legal ads on Maui, Kauai and the Big Island.
The proposed new basic rate of $22 for a legal ad, which would increase to $26.43 next year, is far higher than the $9.75 charged in mid-2010, Coppa acknowledged.
“But that was when we had two newspapers competing with each other,” he said.
Coppa said the state may propose changes to the law in the future to allow for electronic publication of legal ads.
“We’re always looking for ways to save some money,” he said.
The issue is complicated because online legal ads can’t be read by residents who don’t have computers, said Coppa.
But he noted that many of the legal ads refer readers to other websites for additional information.
Oahu Publications president and publisher Dennis Francis said last year that planned increases in legal ad rates still left prices lower than they were in the 1990’s when the two daily newspapers were separately owned but operated in partnership and charged common ad rates.
Since the two papers merged last year, “our circulation and costs changed, thus the new price(s),” said Francis.
He pointed out that advertising rates charged to government customers “are still substantially less” than what the general public pays.