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Public Financing of Campaigns Overview

Public Financing of Campaigns:  An Overview

Updated January 23, 2013

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 14 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.

 

Table 1. Candidate Public Financing Programs

 

State

Candidates Eligible

Type of Program

Full/Partial Funding

Arizona

All statewide offices
Legislature

"Clean Elections"

Full

Connecticut

All statewide offices
Legislature

"Clean Elections"

Full

Florida

Governor
Cabinet members

Matching grants

Partial

Hawaii

Governor
Lt. Governor
Legislature
Off. Hawaiian Affairs

Matching grants

Partial

Maine

Governor
Legislature

"Clean Elections"

Full

Maryland

Governor
Lt. Governor

Matching grants

Partial

Massachusetts

All statewide offices

Matching grants

Partial

Michigan

Governor

Matching grants & fixed subsidy

Partial

Minnesota

All statewide offices
Legislature

Fixed subsidy

Partial

New Jersey

Governor

Matching grants

Partial

New Mexico

Public Regulation Commission
Statewide judicial offices

"Clean Elections"

Full

North Carolina

Judicial offices
Auditor
Superintendent of Public Instruction
Insurance Commissioner

"Clean Elections"

Full

Rhode Island

All statewide offices

Matching grants

Partial

Vermont

Governor
Lt. Governor

"Clean Elections"

Full

West Virginia

State Supreme Court (pilot program in 2012)

"Clean Elections"

Full

Source:  National Conference of State Legislatures, 2013
 

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.

 

 

Table 2.  Public Grants to Political Parties

 

State

Funding Source

Grants to

Alabama

$1 add-ona

To political party specified by taxpayer

Arizona

$2, $5, or $10 add-on

To political party specified by taxpayer

Iowa

$1.50 check-offa

To political party specified by taxpayer

Kentucky

$2 check-offa

To political party specified by taxpayer; $0.50 to county organization and $1.50 to state party

Minnesota

$5 check-offa

To political party specified by taxpayer

New Mexico

$2 add-ona

To political party specified by taxpayer

North Carolina

$3 check-offa

To political party specified by taxpayer

Ohio

$1 check-offa

Divided equally among qualified parties

Rhode Island

$5 check-off

First $2 to political party specified by taxpayer; remaining $3 to candidate fund

Utah

$2 check-off

To political party specified by taxpayer

(a)  Amount may be doubled on joint returns.

 

States Offering Public Funds through Tax Incentives to Citizens

Seven states offer tax incentives to encourage citizens to make political contributions (see Table 3).  In most 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 $100; in most states, the limit is $50.  This amount may be doubled for joint returns in most states.

 

Table 3.  Tax Refunds, Credits and Deductions for Political Contributions

 

State

Description

Arkansas

$50a credit against state income taxes allowed for contributions to candidates, PACs and parties

Minnesota

NOTE: The political contribution refund is currently unavailable. It was temporarily suspended in 2009 and is currently scheduled to be reinstated on July 1, 2013.

$50 per year refund for contributions to political parties and candidates who agree to spending limits

Montana

$100a per year income tax deduction for political contributions

Ohio

$50a credit against state income taxes owed for contributions to candidates

Oklahoma

$100 per year income tax deduction for contributions to a candidate or political party

Oregon

NOTE: The following provision is scheduled to expire; the credit may not be claimed for tax years starting on or after January 1, 2014. [2009 c.913 §34]

Income tax credit equal to the lesser of $50a or the tax liability of the taxpayer for contributions to major or minor parties, party committees, candidates who agree to spending limits, political committees organized and operated exclusively to support or oppose ballot measures or questions to be voted upon within the state

Virginia

Income tax credit equal to 50% of the amount contributed to a local or state candidate.  Maximum credit $25a

(a)  amount may be doubled for joint returns

 

 

 

Table 4.  Overview of State Public Financing Programs

 

 

Funds to Candidates

Funds to Parties

Tax Refund, Credit or Deduction to Donors

 

Partial Public Financing

Full Public Financing

(“Clean Elections”)

 

 

 

Statewide

Legislative

Statewide

Legislative

 

 

Alabama

       

X

 

Arizona

 

 

X

X

X

 

Arkansas

 

 

 

 

 

X

Connecticut

 

 

X

X

 

 

Florida

X

 

 

 

 

 

Hawaii

X

X

 

 

 

 

Iowa

 

 

 

 

X

 

Kentucky

 

 

 

 

X

 

Maine

 

 

X

X

 

 

Maryland

X

 

 

 

 

 

Mass.

X

 

 

 

 

 

Michigan

X

 

 

 

 

 

Minnesota

X

X

 

 

X

X

Montana

 

 

 

 

 

X

New Jersey

X

 

 

 

 

 

New Mexicoa

 

 

X

 

X

 

N. Carolinab

 

 

X

 

X

 

Ohio

 

 

 

 

X

X

Oklahoma

 

 

 

 

 

X

Oregon

 

 

 

 

 

X

Rhode Island

X

 

 

 

X

 

Utah

 

 

 

 

X

 

Vermont

 

 

X

 

 

 

Virginia

 

 

 

 

 

X

West Virginiac

 

 

X

 

 

 

25 TOTAL

8States

2 States

7 States

3 States

10 States

7 States

Source: National Conference of State Legislatures, January 2013

(a)    New Mexico's program is offered only for candidates for the Public Regulation Commission and statewide judicial offices

(b)    North Carolina's "Clean Elections funding 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.

(c)    West Virginia operated a pilot program offering full public financing to state supreme court candidates in 2012.


For More Information

For more information on the issue of public financing of campaigns, contact Morgan Cullen in NCSL's Denver office.

 

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