Public Financing of Elections

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Seattle Democracy Vouchers

Big donors and special interests have come to dominate the financing of American elections.

Candidates rely on donations from a handful of wealthy donors, while super PACs increasingly exert an outsized influence on our elections. As a result, elected officials are more responsive to large donors than to their constituents. 

Public financing is a promising way to amplify the voices of all citizens in a democracy of, by, and for the people.  

A well-designed program can create an incentive for candidates to fundraise and connect with the people they seek to represent. And this translates to a donor base that looks more like the fabric of the community, rather than a handful of wealthy elites, because we deserve a real democracy. 

Public financing refers to government programs that provide limited public funds to candidates for campaign expenses. To receive public funds, candidates often must agree to certain restrictions like accepting only small-dollar private contributions, limiting campaign expenditures, and participating in public debates. 

The first public financing programs were enacted following the Watergate scandal of the 1970s. Since then more than thirty jurisdictions have adopted some form of public financing, including states like Arizona, Connecticut, Maine, and Michigan, and local governments like New York City, Seattle, Albuquerque, and Montgomery County, Maryland, among many others. 

Different public financing programs leverage public money in different ways. Some states and localities make lump-sum grants to candidates; others provide tax benefits to citizens to incentivize political giving.

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How does it work? 

In a matching funds program, a jurisdiction “matches” certain small-dollar donations that a candidate earns with public funds at a set rate. Most jurisdictions match only small-dollar contributions (e.g., $250 or less) and do not match contributions from certain sources (e.g., government contractors).  

Until the late 1990’s, most jurisdictions matched private contributions at a rate of 1-to-1, or at most 2-to-1. More recently, however, jurisdictions are opting for larger match rates. For example, New York City now matches private contributions 8-to-1 so that all New Yorkers can participate meaningfully in the campaign process. 

Of course, matching funds still require candidates to fundraise from private sources, but the burden of fundraising—and especially the dependence on big donors—is substantially reduced. In these jurisdictions, anyone with broad-based support can run a campaign, without spending all of their time chasing big donors. 

Success Stories 

In 1988, the New York City council enacted a matching funds program providing for a 1-to-1 match. In 2021, the city will match contributions 8-to-1. Nearly all candidates participate in the program during primary elections and a majority participate in general elections. The program has enabled more residents to run for office without relying on money from special interests. The city has also seen increased participation by voters in the political process. 

Other jurisdictions have followed suit. For example, in September 2014, Montgomery County, Maryland created a program to provide matching funds at tiered rates for contributions from county residents. In exchange for receiving public funds, participating candidates agreed to lower contribution limits and to forgo fundraising from corporations, PACs, and labor unions. In 2018, 60 percent of County Council candidates and half of all candidates for County Executive participated in the program. 

To learn more about matching fund programs or any other form of public financing, please email [email protected]

How does it work? 

In a voucher program, a jurisdiction distributes “vouchers” representing a small amount of public funds to every eligible resident, which can then be donated to a participating candidate. Once residents have donated their vouchers to a candidate, the candidate can redeem the voucher for public funds to use in their campaign.  

Vouchers enable all eligible residents to donate funds to their preferred candidates. This is a significant shift from privately financed campaigns, where only a small handful of residents contribute in a given election. Vouchers give everyone in a jurisdiction the ability to engage in this important form of civic participation. 

Success stories 

In 2015, voters in the City of Seattle successfully enacted the first “Democracy Voucher” program in the country. Every election year, all eligible Seattle residents receive four $25 vouchers, worth $100 in total. Eligible resident may donate any or all of their vouchers to any participating candidate. Participating candidates, in turn, agree to limit campaign spending and participate in at least three public debates. 

Seattle’s voucher program has dramatically increased the number and diversity of people involved in local democracy. During the program’s first year of implementation in 2017, over five times as many Seattle residents contributed in city council races compared to 2015. Eighty-eight percent of voucher users had never contributed to a local election campaign in Seattle. 

Vouchers are an innovative and still evolving form of publicly funded elections. But the idea is catching on.  

To learn more about vouchers or any other form of public financing, please email [email protected].

 

If you have questions about this policy proposal, we'd love to hear from you! Just e-mail us. 

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