State Legislatures Magazine: September 2000

Editor's Note: This article appeared in the September 2000 issue of NCSL's magazine, State Legislatures. To order copies or to subscribe, contact the marketing department at (303) 364-7700.

Do Campaign Finance Laws make a Difference?

So Do Limits Work?
Getting the Information Out
Public Election Financing

Do Campaign Finance Laws Make a Difference?

States' experiments with campaign finance reform do affect elections, although no one seems to agree on how much and whether the effects are positive.

By Jennifer Drage
The role of money in politics is always controversial, but lately the debate has been hotter than ever. Over the past decade, states have experimented extensively with reforming the laws that govern the role of money in campaigns. Contribution limits, electronic filing and disclosure, and public financing all have been touted as cures for what their proponents believe ails the American electoral system: a lack of competition in many races, the voters' disgust with high-spending, negative campaigns, the fear of corruption that lurks in the public's mind when candidates rely on large contributions from a few individuals or from large corporations, and the apathy and cynicism that seem to result from all of this. Are any of these reforms working as they are intended to? Have they increased competition, reinvigorated the public's interest and faith in government, and removed the threat of corruption? In other words, to what extent have campaign finance laws really affected state elections?

In the mid-1990s, low contribution limits were all the rage. Between 1994 and 1996, a number of states, including Arkansas, California, Colorado, Missouri, Montana and Oregon, passed laws via the citizen initiative that set low limits on the amounts that could be contributed to candidates. Because most of these laws failed to withstand judicial scrutiny, they never had the chance to affect elections.

The limits in Arkansas, California and Oregon never went into effect during an election before they were tossed out by the courts. Colorado's limits, passed by Amendment 15 in 1996, stayed in effect long enough to be tested through the 1998 elections (although they've since been invalidated by a federal court and replaced by the legislature with more generous amounts). Montana's, while currently under challenge, were in effect for both the 1996 and 1998 elections. An appeal of California's limits is currently pending, but a decision isn't likely to come in time to affect the 2000 elections. Missouri's limits, ranging from $250 to $1,000 per election plus adjustments for inflation, were passed in 1994 and immediately challenged. The case is finally coming to a close, however, thanks to a U.S. Supreme Court ruling in January 2000 that upheld most of the limits. Litigation is still pending on limiting contributions to candidates by corporations, but most other contributions are limited for the 2000 elections.

SO DO LIMITS WORK?
So do contribution limits have an effect on statewide and legislative races? Pete Maysmith, program director of Colorado Common Cause, says they did in Colorado in 1998. Common Cause and the League of Women Voters, as the sponsors of Amendment 15, firmly believe that strong campaign finance reform is necessary to help restore citizen confidence in the electoral system because massive, unregulated contributions have the potential to corrupt. And "potential" is an important word here: Even if actual corruption never takes place, they say, the perception among citizens is that candidates and lawmakers are beholden to their large contributors. The appearance of corruption is just as dangerous to the integrity of our electoral system as actual corruption, Common Cause contends.

Colorado's Amendment 15 established contribution limits ranging from $100 per primary or general election for individual contributions to a legislative candidate to $500 per primary or general election to a gubernatorial candidate (amounts doubled if a candidate was in a contested primary). Maysmith says these limits worked in the 1998 elections because they stopped large contributions and involved more people in politics as candidates were forced to reach out to a broader group of supporters.

Colorado House Speaker Russell George agrees that Amendment 15's limits had an effect on Colorado state races in 1998, but maybe not the one its proponents were hoping for. He says Amendment 15 violated a cardinal rule of campaigning: A candidate must always be in charge of his own campaign and his own message. Amendment 15 failed to recognize a basic reality of the electoral process: If you squeeze money out of one arena, it will ooze into another. In Colorado, George says, Amendment 15 squeezed money out of candidates' hands and into the hands of so-called educational groups such as Shape the Debate, Centennial Spirit and Invest in Our Families with narrow agendas and obscure memberships. That meant candidates didn't have the money to get their message out, and left these special interest groups speaking on behalf of candidates.

Speaker George sponsored legislation passed in 2000 that sets higher limits on contributions in Colorado. Setting some sort of limits, he says, was necessary, not only because federal court rulings had left Colorado without limits and left candidates confused about the law, but also because state voters clearly supported limits when they passed Amendment 15 in 1996. The new limits range from $1,000 per election for contributions to a House candidate up to $5,000 per election to a gubernatorial candidate. George believes these new limits are more reasonable than the ones in Amendment 15.

"Amendment 15 was bad public policy. It drove politicians to say, 'I need your money, so what is it going to take to get it?' instead of saying, 'My money is easily gotten over here, so now let's sit down and talk about the issues,'" George says.

California voters passed Proposition 208 in 1996, a measure similar to Colorado's Amendment 15. Prop. 208 set limits of $250 per primary or general election for a legislative candidate and $500 for a statewide candidate. Those limits double if a candidate agrees to abide by voluntary spending limits that range from $350,000 for a candidate for the Assembly to $14 million for a gubernatorial candidate ($6 million in the primary and $8 million in the general). Unlike Colorado, California has never gone through an election under low contribution limits. Prop. 208 was enjoined in January 1998 by a U.S. district court judge, and the case is still pending.

On July 7, the California Legislature passed a campaign finance reform bill establishing contribution limits ranging from $3,000 to $25,000 for various candidates and voluntary spending limits as high as $16 million. The measure will appear on the November 2000 ballot. If passed by voters, the limits will take effect in January 2001 for legislative candidates and after the November 2002 election for gubernatorial candidates.

In the meantime, California candidates are not subject to any contribution or spending limits. In the 1998 elections, the two major candidates for governor spent a combined total of more than $52 million in the general election. Under the voluntary spending limits of Prop. 208, they would have been limited to $8 million each. The 191 candidates for the Legislature spent more than $56 million in the general election. Under the voluntary limits of Prop. 208, their spending would have been limited to a total of $45.8 million. Supporters of contribution limits question whether candidates who are neither independently wealthy nor politically connected can raise the kind of money they need to be competitive in California elections. Those who do not favor contribution limits counter with the question: Is access to cash really what makes a candidate competitive?

GETTING THE INFORMATION OUT
Some would argue that speedy, accurate disclosure of campaign contributions and expenditures is the answer. The California Voter Foundation, a nonprofit organization dedicated to advancing new technologies to improve democracy, monitors and evaluates state electronic campaign finance reporting and disclosure efforts. In 1999, the foundation awarded the Digital Sunlight Award to California, Hawaii, Illinois, Louisiana, Michigan, New York and Virginia, citing electronic filing programs and convenient and user-friendly access to campaign finance information. Kim Alexander, foundation president and founder, says that 35 states currently offer campaign finance information on the Internet. "The reason why it's happening," she says, "is because politicians do want to do something about the problem of money. There's genuine dissent about how to deal with special interest money in politics, but people agree that one thing we can do is provide voters with access to information."

Alexander admits that these Web sites appeal to a limited audience. The average voter is not very interested in looking at original campaign finance disclosure reports, and the data can be confusing. However, many of the states awarded the Digital Sunlight Award not only provide access to a database of information, they also provide summaries and analyses of contributions and expenditures. This helps voters condense a vast amount of complex financial information into the facts they need to evaluate the candidates. In states like California, Illinois and Virginia, where there are no limits on how much may be given to candidates, that information can be especially important.

Electronic filing has other advantages: It's inexpensive-once the software has been developed-and it's accurate. States don't have to go through a time-consuming, error-prone and expensive data entry process. Detailed, accurate and speedy disclosure can also help people understand why campaigns cost so much. Alexander points out, "If we understand why it costs a candidate so much to get a message out, we can go on to look for ways to either reduce those costs or look for other ways to finance them." Perhaps that kind of understanding could also, at a minimum, help alleviate people's cynicism about the amount of money in politics.

PUBLIC ELECTION FINANCING
The newest idea in campaign finance reform is "Clean Elections" public financing. The idea of using public money to finance candidate campaigns isn't new-more than one-third of the states operate some sort of public financing program. But the clean elections variation allows candidates to finance their campaigns almost entirely with public funds. Once a candidate qualifies by collecting a specified number of small contributions (often as low as $5), he or she agrees not to collect any more contributions from private sources. Instead, the candidate receives a grant from the state to finance his or her campaign. The public money comes from a variety of sources, including income tax checkoffs and add-ons, appropriations, lobbyist fees, and surcharges on civil and criminal fines. Public Campaign, a national group that promotes clean elections public financing, says that funding elections with public money solves several problems: It removes special interest money from campaigns, frees candidates from time-consuming fundraising, reins in expensive campaigns with spending limits and provides an equal financial base for all candidates.

Maine was the first state to pass clean elections, via a citizen initiative in 1996. The Vermont legislature passed a similar measure in 1997. Arizona and Massachusetts voters approved initiatives in 1998. The Massachusetts law won't go into effect until 2002, but Arizona, Maine and Vermont are using their clean elections systems for the first time this year.

Arizona and Maine don't have gubernatorial elections this year, but public funding is available to legislative candidates. In Arizona, 27 have applied for public funding, and nine have received funds. In Maine, there were 389 legislative candidates going into the primaries; 119 qualified for and received public funds. Republicans and Democrats are taking advantage of Maine's public financing in equal numbers. A candidate in a contested Senate primary received about $4,300, a contested House primary candidate got about $1,100. Amounts for uncontested primaries were about $1,800 and $500 respectively. At press time, it was unknown how many of the 119 candidates who received public funds won their primaries. In most primaries, however, either both candidates used public funds, or neither did. Therefore, it's not likely that the public funding will have much effect, if any, in the primaries. Clean elections participants who won their primaries will receive public funds for the general election as well: almost $13,000 for Senate and about $3,500 for House candidates. Minor parties also may be getting a leg up thanks to public funding. Two minor party candidates have been certified to receive public funds in the general election in Maine, and a third may qualify soon.

Senator John Nutting is running for reelection in Maine and using the clean elections public financing. "I'm just pleased to be able to run for office without asking for any money from those I'm then going to be voting to regulate," Nutting said. He also points out the time-saving factor. Besides running a campaign and taking 20 to 40 constituent calls a day, he's a dairy farmer. Using the clean elections fund frees up the countless hours he used to have to spend fundraising.

In Vermont, public funding is available only to candidates for governor and lieutenant governor. Three candidates have qualified for public funds this year: Anthony Pollina, running for governor on the Progressive Party ticket, incumbent Democratic governor Howard Dean, and incumbent Democratic lieutenant governor Douglas A. Racine. The two gubernatorial candidates will receive primary election grants for $75,000, minus the contributions they raised to qualify, and $225,000 for the general election. Racine will receive $25,000 (minus qualifying contributions) for the primary and $75,000 for the general election.

Nick Nyhart, the executive director of Public Campaign, says, "The fact that Anthony Pollina has reached the threshold required to qualify as a clean money candidate for governor of Vermont is a milestone for the movement for comprehensive campaign finance reform."

It's clear that states' experiments with campaign finance reform do affect elections, although everyone seems to disagree on how much and whether the effects are desirable or not. Most folks, regardless of their political affiliations, seem to agree that getting campaign finance information to voters in a timely and accurate manner is important. Electronic disclosure, therefore, is one of the most common and least controversial reforms states have tried. Low contribution limits, in most states, never got the chance to affect elections. In the states where they did, like Colorado, opinions are divided. Some say that the limits made elections less corruptible by big money, others say it just pushed the big money into a new arena, one more difficult to regulate. And "clean elections" public financing is simply an idea too new for us to draw any conclusions about how it might reshape state elections. It appears, in Maine at least, to be popular and widely used among candidates

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