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Public Financing Lives in New York City

Campaign finance reform opponents will crow about the death of public financing. But don’t believe the hype. Public financing is alive and well…and living in New York City.

  • Mark Ladov
July 14, 2011

Crossposted at ThinkProgress.

Public financing of elections can curb the corrupting influence of large campaign contributions. But has the Supreme Court doomed this important political reform?

Certainly, by striking down a piece of Arizona’s public financing law (in yet another divisive 5–4 campaign finance opinion), the Roberts Court set back one particular model of public financing. But the Arizona ruling was limited to a narrow question: whether states can award additional funding to publicly financed candidates who face a high-spending opponent or unexpectedly expensive outside attack ads. The Court expressly refused to cast doubt on the constitutionality of public financing generally. Nor did the Court question its long-standing belief (from the 1976 case of Buckley v. Valeo) that public financing helps “to facilitate and enlarge public discussion and participation in the electoral process, goals vital to a self-governing people.”

Based on this narrow victory, some opponents of campaign finance reform will crow about the death of public financing. But don’t believe the hype. Public financing is alive and well…and living in New York City.

For more than two decades, New York City candidates have participated in a voluntary public financing program. As is too often the case, this reform was born out of scandal and tragedy — including the 1986 suicide of former Queens Borough President Donald Manes following revelations about extortion and bribery among contractors and city officials. The City Council overwhelmingly passed a voluntary public financing program as part of the ensuing political reforms. New York City has been at the forefront of public financing ever since.

The City’s most notable innovation is its use of multiple matching funds to encourage small donor outreach.

Under current rules, the City gives participating candidates a $6 to $1 match in public financing for the first $175 they raise from New York City voters. A voter’s $175 donation to her local City Council candidate is now worth as much as a $1,225 contribution from a special-interest lobbyist. This encourages candidates to target average New Yorkers — and allows candidates with grassroots support to run viable campaigns, even without the backing of big money.

New York City’s pioneering experiment has been a resounding success. The program has enjoyed robust participation by serious, credible candidates. It has promoted voter choice by increasing diversity and competition in City elections. It has dramatically expanded the number of New Yorkers who participate in electoral campaigns. And it is a powerful weapon against the corrupting influence of special interest money; research suggests that large donors, unions and PACs exert less influence on publicly-financed candidates who depend heavily on small donors.

Crucially, the small donor matching fund model used by New York City matches public funding to a candidate’s own fundraising. This avoids the constitutional problems raised in the Arizona case, by ensuring that a candidate’s public financing rises or falls based on her own success at campaigning.

Some have suggested that the Supreme Court’s ruling raises questions about New York City’s “bonus” funds. This rarely-triggered provision increases the matching ratio when a participating candidate faces a really high-spending opponent. Importantly, under this scheme, any additional public funds received by the participant are pegged to her own campaign fundraising. Moreover, the bonus funds are largely irrelevant to the success of New York’s program. In Arizona, all participating candidates received the same lump sum grant and had no access to additional money without the triggered funds – and so, seriously risked being overwhelmed by a high-spending opponent. Under the small donor matching fund model, on the other hand, candidates can continue to fundraise on their own when facing vigorous opposition. So, unlike in Arizona, New York’s program would remain strong even without the bonus funds.

New York City’s program has deep roots. But it is a particularly important model for reform in the Internet age. President Obama’s groundbreaking 2008 presidential run showed how a candidate could use digital media and social network tools to reach a broader base of supporters than ever before. These small donors provide important political balance, particularly in our post-Citizens United world of unchecked political spending. When a candidate must rely entirely on wealthy donors to run for office, it’s only natural that those donors will dictate our laws and policies. But when a candidate can run for office with the support of small donors, he can remain responsive to the voters at large — and not just a handful of special interests.

So the next time someone says the Supreme Court has closed the book on public financing, you can tell them we’re just opening a new chapter. And you read it first in New York City.