Correction: An earlier version of this article omitted the co-author of a 2012 report on publicly funded campaigns in New York City. This version has been corrected to include the Campaign Finance Institute.
Publicly funded elections will be a game-changer for politics in Montgomery County, proponents predict. Candidates will be able to run and win without big money from real estate developers or public employee unions. Small individual donors will see the power of their contributions enhanced by a proposed system of matching funds.
But elsewhere in the country, such systems have compiled a record that is mixed at best, falling short of the promises that advocates are making in advance of next week’s County Council vote on a public finance plan.
If there is a rough consensus, it is that certain kinds of public financing systems can change how candidates spend their time, freeing them from fundraising and creating more opportunities for retail politicking with voters. But public funding does not seriously disrupt the traditional advantages enjoyed by incumbents. While races tend to be more competitive, officeholders still win reelection as much as ever.
“The people who propose these systems often oversell them,” said University of Wisconsin political scientist Kenneth Mayer, who has spent a decade studying public campaign finance. “From what we’ve observed in places that have various types of public funding, the impacts are actually a lot more marginal.”
Public funding has been in place at the presidential level since 1976. Nearly half of the 50states, including Maryland, and a handful of cities have some form of taxpayer subsidy for campaigns. Montgomery’s plan, sponsored by council member Phil Andrews (D-Rockville-Gaithersburg), will come before the council on Tuesday and is likely to pass.
Some localities have tried the idea and discarded it. In Portland, Ore., voters scrapped their system in 2010 after five years. Over three election cycles, just two of nine publicly funded candidates won their races. A scandal involving a city council candidate who used the money for personal expenses also soured residents.
Public finance systems have also suffered from unfriendly court decisions. The U.S. Supreme Court ruled in the 2010 Citizens United case that corporations and unions had the right to spend unlimited sums independently to influence elections. A year later, the court invalidated part of Arizona’s campaign law, ruling that its “trigger” provision — which funneled extra public money to candidates being outspent by traditionally financed opponents — was unfair to privately financed candidates. The ruling has had repercussions for similar systems in other states.
Maryland lawmakers included a public funding option for counties as part of the campaign finance reform bill they passed in 2013. Montgomery is the first to give it serious consideration.
Andrews said his proposal, built around small donations and matching funds, can withstand legal challenge. It differs from many earlier subsidies that involved lump sums awarded to eligible candidates based on the number of registered voters or other measures.
To qualify, candidates for county executive or council must demonstrate viability by raising a specific number of small individual contributions between $5 and $150. Contenders for executive would need at least 500 contributions totaling $40,000. An at-large council candidate would have to collect 250 donations worth $20,000.
Those who qualify would have subsequent donations matched with public money. The first $50 from each donor would be matched at the highest ratio: 6-to-1 for an executive candidate and 4-to-1 for a council contender.
The bill caps public contributions to county executive candidates at $1.5 million — $750,000 each for primary and general elections. At-large council hopefuls are limited to $250,000 and district council contenders to $125,000 — sums large enough to run sustainable campaigns in Montgomery, Andrews said.
Candidates who participate in the voluntary system would be barred from accepting corporate or political action committee (PAC) donations. They could continue raising unlimited amounts of unmatched money — but individual donations would be limited to $150 each.
The Andrews proposal most closely resembles the system in New York City, which offers a 6-to-1 match for individual contributions of up to $175.
A 2012 study by the Brennan Center for Justice at NYU School of Law and the Campaign Finance Institute showed that the system has dramatically broadened the demographic profile of campaign contributors. In the 2009 election, small resident donors to city council candidates came from nearly 90 percent of the city’s census group blocks. By contrast, small donors to state assembly races, where there is no public financing, resided in just 30 percent of census blocks. The trend continued in the 2013 campaign.
But New York’s small donor trend was accompanied by a surge of spending by independent committees, allowed to invest unlimited amounts to get their message across. In some 2013 council races, candidates were outspent as much as 3-to-1 by outside groups, according to a study by the New York City Campaign Finance Board.
Real estate interests were the biggest driver. Jobs for New York, an industry-funded committee, accounted for 78 percent of the $15.8 million in total independent expenditures, according to the finance board.
It concluded that the torrent of special interest money creates “a special dilemma for any public campaign finance program.”
Andrews said there’s no stopping independent committees from raising big money. The point, he said, is to provide a potential counterweight.
Andrews has accepted virtually no corporate or PAC contributions during his four council terms and did not do so in his unsuccessful Democratic primary bid this year for county executive.
In that race, he was heavily outspent by two candidates who did: incumbent Isiah Leggett and former executive Doug Duncan.
Andrews relied instead on the small donors at the heart of his proposal. An analysis by Common Cause Maryland, the organization he once headed, shows that if the system were in place this year, he would have received $450,000 in matching funds, nearly twice the total of $289,000 he raised under the existing law.
It would not have given him the advantage over Leggett, who would have received $626,000 in matching dollars. But it would have closed the margin.
Montgomery’s business leadership has been quiet — at least publicly — about the proposal, even though it would bar qualifying candidates from accepting PAC donations. MD-RPAC, the political arm of the Maryland Association of Realtors, contributed nearly $40,000 to Montgomery County candidates this year, including $6,000 each to Leggett, council members Nancy Floreen (D-At Large) and George Leventhal (D-At Large), and council member-elect Sidney Katz.
Mark Feinroth, director of regulatory affairs for the Association of Realtors, said the group has no position on the bill. “We’re not especially concerned about the limitations on PAC contributions,” he said, citing independent expenditure committees as one tool. One such entity, Maryland Realtors for Independent Political Action, was active in Montgomery during the primary.
Union leaders also downplayed the bill’s impact, saying that relative to the developer sector, most of their resources go elsewhere. The Montgomery County Education Association, which represents 12,000 public school teachers, spends heavily to produce its “Apple Ballot” of endorsed candidates mailed to registered Democrats and distributed at the polls.
The council is likely to pass the proposal, although not without some ambivalence.
Floreen said politics is replete with examples of well-funded challengers who falter.
“I don’t know what problem this is solving, frankly,” said Floreen, who has close ties to the business community as chair of the committee that reviews land-use plans.
Others are concerned about the system’s cost. The Common Cause study of the 2014 cycle placed it at $2.5 million, but it would be higher depending on the number of eligible candidates.
“People choke on the price tag a little,” said council member Hans Riemer (D-At Large), who backs the bill. “But it’s a business expense for having a good government. It makes sense to pay for government this way.”