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Analysis

A Win for Public Financing at the Supreme Court

With a Seattle case, the Court continues to affirm that public financing programs are constitutional, writes Brennan Center Fellow Ciara Torres-Spelliscy.

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Robert Alexander/Getty

In some good news for reformers work­ing to combat polit­ical corrup­tion and empower small donors, the Supreme Court has rejec­ted a chal­lenge to Seattle’s “demo­cracy voucher” program provid­ing public finan­cing for local elec­tions.

Most Amer­ican elec­tions are entirely privately funded. Public finan­cing offers an altern­at­ive source of fund­ing for polit­ical candid­ates, offer­ing the soci­etal bene­fit of help­ing to fight crony capit­al­ism where elec­ted offi­cials dole out govern­mental bene­fits to polit­ic­ally connec­ted firms.

Crony capit­al­ism is a real risk in a demo­cracy that relies on private funds for elec­tions. For instance, a recent study found a troub­ling link between corpor­ate support for candid­ates and govern­mental incent­ives for those same firms. This study found that in the United States, economic incent­ives are dispro­por­tion­ately awar­ded to polit­ic­ally-connec­ted compan­ies, even though these awards appear to be a less effect­ive use of taxpayer-provided funds.” In other words, instead of award­ing the best compan­ies, firms with the best polit­ical ties were the bene­fi­ciar­ies.

There are differ­ent types of public finan­cing for elec­tions, but the basic idea is that public dollars are used to replace private dollars in elec­tions. New York City has one of the largest and oldest public finan­cing systems in the coun­try for its city coun­cil and city­wide offices. Mean­while, three states — Maine, Connecti­cut, and Arizona — have “clean” finan­cing for elec­tions for their governors and legis­latures.

Seattle is a relat­ive newcomer to public finan­cing. In 2015, the city’s voters passed an initi­at­ive called Honest Elec­tions Seattle, which includes a reform that provides $100 in “demo­cracy vouch­ers” (four vouch­ers of $25 each) to eligible resid­ents, who can then direct those funds to their preferred parti­cip­at­ing candid­ates. 

Public finan­cing programs like Seattle’s can demo­crat­ize polit­ical campaign contri­bu­tions. In Seattle, for example, 84 percent of elec­tion donors in 2017 were new donors, accord­ing to a study by the organ­iz­a­tion Every Voice. Simil­arly, the Bren­nan Center has found that New York City’s public finan­cing system has led to a more diverse pool of campaign donors compared to New York State’s privately funded elec­tions.

Seattle’s $3 million demo­cracy voucher program is funded through taxes on commer­cial and resid­en­tial prop­er­ties. Repres­en­ted by the right-lean­ing Pacific Legal Found­a­tion, prop­erty owners Mark Elster and Sarah Pynchon filed a lawsuit chal­len­ging the program, claim­ing that it was uncon­sti­tu­tional for the city to use their tax dollars to indir­ectly support candid­ates they disagreed with.

Elster and Pynchon lost at the trial court in 2017. In the opin­ion, Judge Beth Andrus wrote, “The City has artic­u­lated a reas­on­able justi­fic­a­tion for the Demo­cracy Voucher Program. It seeks an increase in voter parti­cip­a­tion in the elect­oral process. This goal was recog­nized by [the U.S. Supreme Court] to be [a] ‘goal[] vital to a self-govern­ing people.’”

The plaintiffs also lost in the Wash­ing­ton State Supreme Court in 2019. The justices wrote, “The Demo­cracy Voucher Program does not alter, abridge, restrict, censor, or burden speech. Nor does it force asso­ci­ation between taxpay­ers and any message conveyed by the program. Thus, the program does not viol­ate First Amend­ment rights.”

In March, the U.S. Supreme Court declined to hear the case, leav­ing the Wash­ing­ton Supreme Court’s ruling in place.

The Court has repeatedly upheld the consti­tu­tion­al­ity of publicly financed elec­tions. For example, in the 1976 Buckley v. Valeo ruling, it upheld the Pres­id­en­tial Public Finan­cing System, which provided match­ing funds in the primar­ies and grants in the general elec­tion for pres­id­en­tial candid­ates. In 2011, the Court upheld most of Arizon­a’s state public finan­cing program. And by leav­ing the Wash­ing­ton State Supreme Court’s ruling intact, the U.S. Supreme Court contin­ues to allow public finan­cing as a viable response to the prob­lem of big money in elec­tions.

This year marks the 10th anniversary of Citizens United v. FEC, in which the Supreme Court ruled that corpor­a­tions have a First Amend­ment right to spend unlim­ited money in elec­tions. The decision soured many campaign finance reformers’ view of the Supreme Court. But reformers should take comfort in the fact the Supreme Court still allows for public finan­cing systems like Seattle’s innov­at­ive demo­cracy voucher program. Other cities and states should follow Seattle’s lead. And once a new Congress is seated, the public finan­cing provi­sions in the demo­cracy reform bill H.R.1 should be enacted into law as well.

The views expressed are the author’s own and not neces­sar­ily those of the Bren­nan Center