Lessons from State and Local Campaign Finance Wins

Concern about the influence of money in politics is at record highs across the political spectrum, and many voters are despondent, believing there is little that can be done to truly address the problem. This deep skepticism that things can change is driven in part by the fact that both campaign finance reformers and federal policymakers who ally with them often overly focus on the Supreme Court’s Citizens United decision as the root of all the problems in our system, implying that a constitutional amendment is the only solution. But state and local governments are currently experimenting with a variety of bold reforms that empower more people to engage in our democracy—as donors, candidates, and elected officials—and balance out power in our political system. And none of those innovations require a change to the Constitution, or the composition of the Supreme Court. The three case studies below show that progress can be made to reduce the influence of anonymous money and large donors in politics. If these experiments were replicated at the federal level, together with some changes to how we enforce our campaign finance laws and some updates to our rules to keep up with the evolution of how 21st century campaigns are run, we could take a major step toward ensuring that every American’s voice can be heard in our electoral system.

New York City

Providing a matching system for small dollar donations has long been seen as a way to empower a wider swath of people to influence candidates for office—and to encourage a wider swath of people to run for office themselves. New York City has been a leader in this vein, launching a matching program in 1988. But its 2009 updates reinvigorated that system and fitted it for the current realities of politics: offering a six-to-one match for contributions up to $175.¹ That means a contribution of $175 is now worth $1,050 to a participating candidate in New York City, which greatly incentivizes seeking out smaller donors. Candidates for city office—mayor, city council, borough president, comptroller, and city advocate—must first raise a certain amount of qualifying contributions from city residents (or from district residents, if running for city council or borough president) to show they have a broad base of support. Once they do so, those and future contributions that meet the criteria are matched by the city. The amount of money candidates need to raise to qualify ranges from $5,000 from at least 75 donors for city council races to $250,000 from at least 1,000 donors for mayoral candidates.²

Candidates hoping to qualify for this system can still raise contributions greater than $175, but only the first $175 of each contribution counts towards the totals above. Contributions from political action committees, non-residents, and those doing business with the city do not count towards qualification—and those donations are also not eligible to be matched.³ This donor matching system is voluntary, and candidates who participate must agree to limits on their total campaign spending—from between $182,000 per election for city council candidates up to just under $7 million for mayoral candidates.⁴ This means that even though participating candidates can solicit larger donations, at a certain point they will stop fundraising from those big donors because they won’t be able to spend the money. The total amount of money a candidate can receive from the matching program is limited to 55% of their overall spending limit, or between $100,000 (for city council) and $3.8 million (for mayor).

New York’s program is widely considered a success, as candidates are now seeking contributions from a much wider array of people and neighborhoods. A study of the 2009 city elections found that 89% of “census block groups” (small subsections of neighborhoods) in the city contained donors who gave $175 or less to candidates for city office, while in the 2010 State Assembly elections, only 30% of census block groups featured small donors.⁵ In the 2013 municipal elections, two-thirds of all New York contributors gave under $175, and there were nearly 39,000 first-time small-dollar donors.⁶ This shows that with the right incentives, candidates can be persuaded to focus on a broader array of voters to support their campaigns—even if raising larger dollar donations is still an option.

Maine

Maine has had a “clean elections” system (meaning funding for participating candidates comes entirely or nearly all from public sources) for state offices since 1996, when a ballot initiative put a program into place. However, subsequent court cases weakened the program, and the amount of money for which candidates could qualify was seen as too low to be competitive. Unfortunately, those changes made the system much less attractive because, similar to our current Presidential public financing system, many candidates felt that participating would tie their hands and hurt their ability to run a strong campaign. But this past year, voters in Maine decided to strengthen the program through another initiative, which passed by more than ten points.⁷ The updated program gives money to candidates who raise a certain number of contributions of $5 or more, paid to the Clean Election Fund but in support of a particular candidate, from registered voters in the district that the candidate is running. Candidates can qualify for additional pots of public money by raising additional qualifying contributions, up to a certain limit.

For example, candidates for Maine’s state House of Representatives must now raise $5 qualifying contributions from 60 individual voters, which gives them access to $2,500 for a contested primary election or $5,000 for a contested general election. If they need additional funds in a general election, they can receive a supplemental distribution of $1,250 for each 15 additional qualifying contributions, up eight times, or a total of $10,000.⁸ All told, for both primary and general elections (that are contested), State House candidates can receive a maximum of $17,500, while State Senate candidates can receive $70,000.⁹ Candidates for governor can receive up to $3.2 million.¹⁰ Candidates who participate cannot fundraise from outside sources, except for that they are allowed to raise a limited amount of seed money in donations of $100 or less to start their campaign. Under a separate law passed by the legislature, candidates in the program are also barred from maintaining leadership political action committees, which could help them circumvent the limits.¹¹

Maine’s past efforts demonstrate the promise of what this updated clean elections system could deliver. Reliance on private donors dropped drastically under the prior system when it was in its heyday, and at one point 85% of the legislature was participating in the program.¹² A 2007 report by the state found that 71% of women and 65% of first-time candidates said that the clean elections program was an important factor in their decision to run for office, and that the system led to more candidates running and more competitive races.¹³ Others have posited that the state’s commitment to clean elections may be one of the reasons Maine has the most economically diverse state legislature in the country.¹⁴

Seattle, Washington

In November 2015, voters in Seattle made the city the first jurisdiction in the nation to have a system of “democracy vouchers,” passing Initiative 122 by over 20 points.¹⁵#¹⁶ The system is relatively simple: every adult resident of Seattle who is either a citizen or a lawful permanent resident of the U.S. is able to receive four $25 vouchers.¹⁷ Seattle residents can then give some or all of their vouchers to candidates for city office—mayor, city council, and city attorney— who have agreed to participate in the voluntary program. Vouchers cannot be sold or transferred for any amount of money; they must be given freely to candidates.

Before candidates for office can redeem the vouchers, they must elect to participate and show that they qualify for the program. That means raising contributions for their campaigns of between $10 and $500 from a certain number of Seattle residents, between 150 and 600 depending on the office sought. Candidates must also agree to abide by spending limits for both the primary and general election: $400,000 per election for mayoral candidates, $150,000 for at-large council candidates, and $75,000 for both city attorney and district council candidates. To ensure that candidates who participate in the system don’t circumvent the spending limits, they are also prohibited from fundraising for political parties or any entity that is going to make independent expenditures in the race. In the event that a candidate in the program has an opponent that spends more than the limits for that race, or independent expenditures exceed those limits, candidates can be released from their own spending limits.

Because the Seattle’s vouchers are so new, we don’t yet have evidence about what effect the change will have on donor participation rates or who decides to run for office. But by rethinking the traditional public financing mechanisms and creating a voucher that voters get up front to deploy however they choose, the city is piloting a unique way to try and rebalance the system.

Conclusion

It is a maxim in our country that we want states and local governments to be laboratories of democracy, and in the context of campaign finance, it is clear those laboratories are working. As places all across America continue to experiment with bold new ways of fixing the problems around money in politics, they are illustrating that there are in fact solutions to these vexing problems. Their innovations could serve as a model for progress at the federal level.