Yes, it’s not easy to do hard local journalism, but it’s necessary. I know many important local news stories that were broken in the last few months. There was the Bell city council corruption scandal in Southern California, for example. More recently, a Santa Clara County supervisor just resigned when the local paper discovered he was using taxpayer money for thousands of dollars of personal expenses, including gambling trips.
There are still lots of journalism majors coming through the pipeline and most of them get their starts in small locals of varying frequency. Some of those kids are pretty ambitious and not the least bit afraid of local government nor advertisers – they’re planning to be movin’ on up to the east side before too long.
Most small town publishers are also less afraid of local government shutting them out than they are of losing customers who perceive that they’re all too chummy with the powers that be. So a juicy corruption story that pisses off the Licensing and Permits Department is well worth doing. Unless some of the biggest advertisers are also government officials (which unfortunately happens occasionally), advertisers just want eyeballs.
I half-disagree. There are a lot of puff pieces, but that’s just because a paper that reports on goings-on in a small town or city is going to have less items of cosmic significance to report on. Hence a greater reliance on “fire-fighters rescue cat stuck in tree” type stuff.
But I disagree there aren’t hard-hitting investigative pieces in local news. There are plenty. And if anything, there’s probably more of an incentive to find them for local reporters since many of them either are reporting as a side-job and aren’t super attached to it as a career or they want to work their way up the food-chain and get noticed by bigger media outlets. Those same reporters don’t really have to worry about pissing off local leaders, since if they manage to break out into national or big-city reporting, the opinion of the Mayor of Podunk isn’t really going to hurt them much.
Plus, it’s not like the only alternatives are puff-pieces and hard-hitting scandal investigations. Much of the service that local news provides is reporting on the fairly hum-drum, boring but important business of the town. Proposals for spending bills, municipal elections, local problems with spats of minor crimes, performance of local schools, etc.
This American Life had an interesting piece last summer about a company called Journatic, which basically allows major newspapers to outsource local news to cheaper overseas labor.
This NPR write-up summarizes the practice; whatever the future of what we call “local news”, Journatic is likely to be a large part of it.
Yes.
But there’s still the US Attorney, so any corrupt politicians lurking here shouldn’t rest too easy 
I really think it depends where you are. If you’re in a big city, there’s already likely a big Metro paper that covers anything “hard”, leaving the local/community paper with the less spectacular (but still relevant to local readers) stuff.
Of course, if you’re in a smaller town then yes, it’s important to have a local paper to keep officials accountable - but there’s also only so much journalists can do if no-one will talk to them, too.
There are always moles in local government, which usually can’t form a solid block on any issue. There’s always one councilperson who hates another councilperson more than he hates the local press. And some people simply can’t help themselves; part of the reason they went into politics in the first place was for the attention. A little sweet talk from a sympathetic reporter gets them singing.
I wasn’t necessarily thinking local government as such (as you say, there’s always going to be someone in any level of government who will talk to the media) but one of the issues local journalists run into is trying to deal with local branches of large companies - most businesses have a strict policy of not letting individual stores/branches/offices talk to the media without approval from HQ, and what HQ will approve and the information the story needs are often two completely different (or at least unmeeting) things.
My WAG is that it WILL happen but it has to fight over the current common belief that “stuff over the Internet should be free”. Once people start realizing you get what you pay for (and I think it will happen 
) then local news may have some upsurge.