Applying for a job that's potentially a step down

And if they don't, you don't want to work there.

 

Tell them that this is home and they'll also probably low ball you, too.

In our business, you get the biggest raise when you leave one company for another. For this it sounds like you're going to accept a pay cut to go home. This also means two things to consider - can you handle the pay cut/smaller raises and, three years from now, if the hometown paper is unfulfilling or there's a management change, can you get to a better place?

However if home is home, go and perhaps start your exit strategy once you're at the new job. Volunteer. Serve on a board or two. Make those contacts for when it's time to get out for good.