Public Financing: Time to Recalibrate?

As another New York state legislative session ticks down to the inevitable deal-making climax, campaign finance reform advocates may once again begin to echo that old Brooklyn Dodgers refrain: “wait until next year!” Despite earlier high hopes, inaction seems likely as has been true for decades. But things may soon be different in New York City. While the Campaign Finance Board (CFB) currently has its hands full in crafting rules to implement independent expenditure disclosure requirements, another clock has been ticking. The Supreme Court will soon rule on the matching funds trigger under Arizona law. And while not likely on every New Yorker’s mind, the question being asked is whether the holding will be broad enough to undercut the bonus matching funds trigger provisions in New York City’s law. For speculation sake, let’s posit that the Supreme Court holding casts serious doubt on the constitutionality of NYC’s bonus provisions. The additional public funding the law currently provides for participating candidates opposed by high-spending nonparticipants would evaporate. The remaining triggers for and levels of public financing would then need to be reexamined and potentially recalibrated. An overarching question looms: how to ensure that the NYC program remains effective and cost-effective. No proposals have been made in specific anticipation of this possible problem. Rather, current legislative proposals would curb the cost of public financing more generally. Seven City Council members are currently sponsoring a bill to reduce the matching rate from 6:1 (up to $1,050 in public funds per contributor) to 2:1 (up to $350 in public funds per contributor), in election years in which the Mayor’s office has projected a budget deficit of $2 billion or more. In its September 2010 report, the CFB made four different legislative proposals for adjusting public financing payouts, three of which would reduce payments: • Making it more difficult for a candidate to qualify for maximum public funding against a “nominal” opponent • Decreasing the maximum public funds payable in special elections • Increasing the amount a non-participating candidate must raise or spend before a publicly financed opponent may qualify for an increased (“bonus”) matching rate (modifying the kind of provision now at issue now before the Supreme Court). The fourth CFB proposal, potentially resulting in increased payments, would reduce the threshold of contributions candidates for mayor and other citywide offices would need to raise to be eligible for public funds. A recalibration of payment formulas is only one element of changes that may be desirable to enhance cost-effectiveness. Attention also must be paid to provisions and administrative safeguards supporting the City’s recovery of matching funds. We’ll have more to say on that topic in the coming days.