Public Financing of Campaigns:  An Overview

Updated January 6, 2010

Twenty-five states have programs that provide public funds for use in election campaigns.  State public financing programs may be divided into three broad categories:  those which provide funds directly to individual candidates, those that provide funds to political parties , and those which provide tax incentive to citizens who make political contributions.  Many states operate programs which combine more than one of these categories.  Each type is briefly summarized below, and the full array of public financing programs offered by states is detailed in Table 4.

States Offering Public Financing to Candidates

A total of 16 states offer public funds to political candidates (see Table 1).  Candidate public financing programs are always voluntary, and public funds are provided to candidates on the condition that those who elect to receive public funds must limit their campaign spending.  In a few states, the campaigns of candidates who choose to participate in public financing programs are financed solely with public funds; these candidates are prohibited from raising funds from private sources.  This version of public financing is relatively new, and is commonly called "Clean Elections" public financing (a term coined by its proponents, but widely used in general to describe these programs).  In most states, public funds make up just part of a participating candidate’s expenditures, and candidates continue to raise and spend funds from private sources within the limits stipulated by law.

Source:  National Conference of State Legislatures, 2009
(a) Connecticut's public financing program took effect with the 2008 election for legislative candidates, and is scheduled to take effect with the 2010 election for gubernatorial candidates. However, the U.S. District Court, District of Connecticut, held the program unconstitutional and enjoined its operation in August 2009. A stay of the injunction was granted pending an appeal before the Second Circuit Court of Appeals, with oral arguments scheduled for January 11, 2010. 
(b)  Nebraska's public financing provides matching funds to a candidate who adheres to the voluntary spending limits only if that candidate's opponent does not.

States Offering Public Funds to Political Parties

Ten states provide grants to qualified political parties (see Table 2).  These grants are generally not large, and are often used to help finance party conventions.  The grants are funded by income tax check-offs (does not increase filer's tax liability) or add-ons (increases filer's tax liability), ranging in amounts from $1 to $25.  In most states, the amount is between $1 and $5.  In eight states, the full amount of the add-on or check-off goes to the political party designated by the taxpayer.  In most states, if the taxpayer fails to designate a political party, the amount is divided among the qualified political parties in the state according to their registration or their share of the most recent gubernatorial vote.

States Offering Public Funds through Tax Incentives to Citizens

Nine states offer tax incentives to encourage citizens to make political contributions (see Table 3).  In Arizona, an income tax credit of up to $610 or 20% of the tax amount (whichever is higher) may be claimed for contributions to the Clean Elections Fund.  Minnesota will issue a refund of up to $50 for contributions to political parties and candidates who agree to abide by spending limits.  In the other eight states, credits or deductions are available for contributions to candidates, and in some states, to political parties and/or PACs.  In some cases, the contribution must be made to a candidate who has agreed to abide by spending limits in order for the taxpayer to receive the deduction or credit.  The amount of the deduction or credit available ranges from $25 to $500; in most states, the limit is $50.  This amount may be doubled for joint returns in most states. 

 Source: National Conference of State Legislatures, March 2009

(a)    Connecticut's program took effect in 2008 for legislative offices and will take effect in 2010 for statewide offices.

(b)   New Jersey has operated a limited "Clean Elections" pilot program for candidates in selected legislative districts since 2005.  It has been temporarily suspended for 2009 due to budget constraints.

(c)    New Mexico's program is offered only for candidates for the Public Regulation Commission and statewide judicial offices. It first took effect in 2006 for PRC candidates, and was passed in 2007 for judicial candidates. 

(d)    North Carolina's "Voter-Owned Elections" public financing program was originally available to judicial candidates only. It was expanded in 2008 to include candidates for Auditor, Superintendent of Public Instruction, and Insurance Commissioner.

Featured Links

• Campaign Finance Reform:  An Overview
• Contribution Limits:  An Overview
• Database of Legislation
• Helpful Links

Multi-State Charts:

• Overview of Public Financing Programs
• Candidate Campaigns -- Full Public Financing 
• Candidate Campaigns -- Partial Public Financing 
• Sources of Funding for Candidate Public Financing Programs