Gotham Gazette

The Place for New York Policy and politics

Putting Public Money into Politics

Photo by Dennis Mojado
An individual can contribute as much as $56,000
towards a NY gubernatorial candidate.

In March, Barack Obama raised $40 million for his presidential campaign. Hillary Clinton brought in over one million dollars from a single Elton John concert in April. Mayor Michael Bloomberg spent more than $70 million of his own money on his reelection campaign in 2005.

Candidates today are raising and spending more than ever to run competitive campaigns and win elections. Some argue this campaign spending spree and steroidal growth of campaign fundraising detracts from the meat of campaigns, as candidates spend less time talking about issues and more time soliciting contributions.

The issue is particularly pressing in New York State. While contributions for campaigns for president of the United States are capped at $4,600 for both the primary and general election, individuals can contribute up to $15,500 to New York State Senate candidates and $7,600 to candidates running for State Assembly. A person can give someone running for governor $56,000.

Some advocates want governments to take more responsibility for financing election campaigns, and an increasing number of states and cities are adopting systems that allow public dollars to be dedicated to campaigns. Here in New York, reformers are seeking changes that would establish public financing, but there is not yet consensus about what form that might take. Public matching and full public financing are the most notable systems being pursued, but what do these terms mean and what system would best serve the voters?

Where Things Stand

In spring 2007, many good government organizations, including the New York Public Interest Group (NYPIRG), Citizens Union (whose sister organization publishes Gotham Gazette), Common Cause/NY and the League of Women Voters, were preparing for then Gov. Eliot Spitzer to make a deal that would bring about sweeping campaign finance reform. The package was set to lower campaign contribution limits, close loopholes, strengthen enforcement and provide more disclosure of contributions for public scrutiny. An agreement was outlined in a press release but legislation was never introduced as tensions increased between the governor and legislators in Albany due to the "Troopergate" scandal.

Today many of these same organizations continue to push for stricter regulations of campaign financing and greater transparency for contributors and their links to the candidates they donate to. The advocates want limits to so-called soft money contributions -- or funds intended to support the organizational activities of the political parties and their housekeeping accounts, but which are often used to support the individual candidates. They want to close loopholes that allow corporate subsidiaries to make additional contributions and require that campaign contributors and "bundlers" -— individuals who gather donations from others and deliver them to campaigns as a bulk contribution -— disclose their names. These changes, however, are only part of the package to reform campaign finance. Many groups are also advocating that public money be made available to state candidates for campaigns.

Matching Funds or Partial Funding

New York City and a number of other places use a public matching fund system that gives candidates a certain amount of public money to use for their campaign. In order to receive the funds, candidates must agree to a spending cap and in many cases must meet threshold requirements for individual contributions to demonstrate their viability. The money must come from a certain number of contributors, not just a couple of wealthy individuals.

Public matching ratios range from small to generous. Here in New York City, the public matching system provides candidates with $6 of public money for a significant portion of the private money they raise. If there is a self-financed opponent (such as Michael Bloomberg), there are additional spending triggers that provide challengers that participate in the public financing program a higher match ratio or increased expenditure limits to level the playing field.

The presidential primary system also employs a public matching system. After candidates meet a number of fundraising goals, they are eligible to receive a dollar for dollar match of the first $250 dollars a contributor donates. Candidates have to adhere to spending caps both in total spending and state-by-state limits. In 1999, George W. Bush became one of the first presidential candidates since 1976 to refuse public matching funds in the primaries.

Full Public Financing—"Clean Money"

Full public financing also know as "Clean Money, Clean Elections," provides candidates that meet an initial fundraising requirement a grant of public money for their campaigns. Unlike public matching funds, after candidates raise a specific benchmark of private money raised, they will receive one block sum of funds to support their campaign. Once a candidate qualifies and receives full public financing funds, they cannot raise any additional private money. Candidates must also pledge to a spending cap, as with public matching funds, and are not allowed to accept any private money after they receive public funds. Many systems also have trigger provisions that provide additional funds to participants in the program when outside groups run ads against them or when they face a non-participating candidate that spends more than the public grant.

Some states, including Arizona, Maine, New Mexico, North Carolina and Vermont, have already enacted legislation providing candidates with full public financing. It is set to begin in Connecticut for statewide races this year.

Participating in the Program

At the federal level, presidential candidates running in the general election automatically qualify for a campaign grant. The money comes from the Presidential Election Campaign Fund, and includes funding from taxpayers who contribute when filing their tax returns. In 1992, President Bill Clinton and his opponents Bob Dole and Ross Perot received $29 million each. In 2004 general election nominees were eligible to receive $74.62 million in public funds for the general elections. Each presidential cycle the grant totals are adjusted for increases in the cost of living. This year, grants to candidates will be approximately $85 million. As candidates fundraise almost half that amount per month, rumors are spreading that candidates are shying away from full public financing in the general elections.

With both public matching funds and full public financing, participation is voluntary. Candidates can choose to fund their campaigns through private donations, or if personally wealthy, they can fund their own campaigns. The internet has provided candidates with a new fundraising tool that allows them to reach large audiences of people quickly and cost efficiently. If Barack Obama wins the Democratic nomination, there is some speculation that his fundraising success may sway him against using public funds in the general election, especially if his presumed opponent, John McCain, chooses to also fund his campaign through private contributions.

Why Do We Need Public Financing, Anyway?

For some, the notion of government funding campaigns just doesn't sit well. Some critics of using public money to finance campaigns argue that they should not be forced to contribute their tax dollars to fund the campaign of candidates they do not support. In addition, there is some disagreement about the role government should play in financing campaigns at a philosophical level, with some believing it is an inappropriate use of tax payer money and government resources. Other critics believe campaign finance laws in general restrict the public's ability to exercise their first amendment rights.

Supporters argue that public financing is a concrete way to break the link between large contributors and special interests and candidates by making it possible for candidates to run without their support. Advocates argue that money plays too big a role in elections now, swaying politicians and forcing them to spend enormous amounts of time raising funds. If candidates were not under so much pressure to raise tens of millions of dollars in one month, as is the case for the presidential candidates, they could spend more time developing the positions on the issues and communicating with voters.

Supporters of public funding of elections also argue it will level the playing field by enabling people who are not wealthy or do not have the ability to raise funds from large donors to run for office. They believe that this will increase the diversity of the candidates and allow voters more choices on Election Day. And when those candidates make it into office, they can spend more time on their public duties and less time fundraising for the next election. There are many organizations that support Clean Money, but also support public matching funds as a step in the direction towards full public financing.

Other advocates disagree, however, about the merits of full versus partial public financing. Proponents of full public financing argue it is the best way to free public officials and candidates from the influence of special interest money and large donors. Candidates would compete on an equal level with campaign spending tamped down by spending limits put in place. This would further empower citizens in the elections process.

Those who support public matching funds argue that by not allowing voters to contribute to the campaign of their choice throughout a campaign, full public financing limits a voter's right to free speech. This, in turn, could alienate voters from the democratic process. In addition, critics of Clean Money also worry that if contribution limits for qualifying requirements are set too low, such as $5 or $10 dollars, contributors may not take their donations seriously.

In any case, supporters of both systems agree something needs to change in New York State. Gov. David Paterson sponsored the Clean Money bill in the Senate when he served as Minority Leader. Advocates of public funding of campaigns are working to make reforms; how far these changes will go toward providing public dollars to campaigns is still uncertain. Until then candidates continue to rake in donations, hoping to out-raise and possibly out-spend their competitors to victory.


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