Update: On May 12, 2017, Governor Mark Dayton vetoed a budget bill which included provisions that would have ended Minnesota’s public financing program and stripped the Minnesota Campaign Finance and Public Disclosure Board of its rulemaking authority. The Governor’s veto is good news for Minnesota but state lawmakers must still come up with a budget for the state. Hopefully the final version will not include provisions designed to dismantle the state’s campaign finance system.
Minnesota lawmakers are set to take a major step backward by dismantling important components of the state’s campaign finance laws. SF 605, which is currently in conference committee to resolve differences between the House and Senate versions of the bill, repeals a critical component of the state’s public financing program.
Minnesota enacted its first public financing program in 1974 in response to the Watergate scandal. The changes made to this program by SF 605—done under the cover of a larger bill to fund the state’s government—could bring to an end the state’s long and successful run with public financing. Another bill pending in the House, HF 2419, would seriously undermine the state agency charged with administering and enforcing the state’s campaign finance law. These two pieces of legislation, if enacted, would upend one of the country’s oldest and most widely used public financing programs and seriously hamper the Minnesota Campaign Finance and Public Disclosure Board.
Minnesota’s Public Subsidy Program
The current iteration of public financing in Minnesota is a hybrid system. Candidates who opt into the program must agree to a spending cap and, in turn, are provided with a lump-sum grant to partially fund their campaigns. Additionally, individuals who contribute to participating candidates are eligible to receive a refund of up to $50. The lump-sum grant to the candidate coupled with the refund encourages small donors to give to candidates and is a strong incentive for candidates to agree to a spending limit, requiring less reliance on big donors. Candidates for governor, attorney general, secretary of state, state auditor, and state legislature are eligible to participate. Throughout the more than 40 years the state has had public financing, the program has seen consistently high participation rates by both parties. In 2014, 88.5% of eligible candidates opted into the program.
SF 605 amends the public financing program by repealing the lump-sum grant given to participating candidates. Contributors giving to candidates who agree to a spending limit would still be eligible to receive a contribution refund. However, eliminating the grant eviscerates the law and makes it unlikely that many Minnesota candidates will opt into the public financing program. This appears to be a system designed to fail.
Spending limits, which would remain in place, are a common element of public financing programs. Candidates choose to accept spending limits and, as a trade-off, they receive assistance in the financing of their campaigns. SF 605 removes the financial incentive for candidates to accept spending limits. If a candidate accepts spending limits, their contributors will receive a benefit in the form of a $50 refund, but the candidate will not receive public funds to offset the disadvantage of the spending limits and will have to rely on big donors instead. It is hard to imagine candidates would opt into this type of program. Those pushing to end the lump-sum grant have the cover of saying they are leaving part of the state’s public financing program intact. But, in effect, repealing the lump-sum grant will gut Minnesota’s public financing system.
Crippling the Campaign Finance and Public Disclosure Board
Unfortunately, legislative efforts to dismantle the state’s campaign finance laws don’t stop with the public financing program. State lawmakers are also doing their best to undermine the agency charged with administering and enforcing the laws. The House is considering a bill that would seriously weaken the Minnesota Campaign Finance and Public Disclosure Board’s rulemaking authority. The agency currently has the power to adopt rules “to carry out the purposes” of the state’s campaign finance laws. HF 2419 would amend the Board’s authority to “only adopt rules that (1) incorporate specific changes set forth in applicable statutes when no interpretation of law is required, or (2) make changes to rules that do not alter the sense, meaning or effect of a rule.” This change would allow the Board to adopt rules only in response to a legislative change to the statute—and then only if “no interpretation of law is required”—or to adopt rules that don’t change the current rule. For all intents and purposes, HF 2419 would nullify the Board’s rulemaking authority. Rules are meant to clarify the law and provide guidance for the regulated community. HF 2419 would prevent the Board from doing this important work.
Finally, for the second time in the past 12 months, the six-member Campaign Finance and Public Disclosure Board is without a quorum. A vote of at least four members is required to decide any matter before the Board. Board members are appointed by the Governor and confirmed with the advice and consent of the House and Senate. Governor Mark Dayton has put forth Board nominees, but the nominees have not received sufficient support from either the House or Senate for confirmation. Without a quorum, the Board cannot fulfill its duty of administering and enforcing Minnesota’s campaign finance laws.
Taken together, all of these efforts by some lawmakers would mean significant changes in Minnesota’s campaign finance law. The gutting of the state’s campaign finance program would significantly change candidates’ campaigns and the Board would be limited in its ability to respond to changes in this new environment. It’s up to Gov. Mark Dayton to veto SF 605 and salvage public financing in Minnesota and, hopefully, lawmakers will realize the damaging impact of HF 2419 and preserve the powers of the Campaign Finance and Public Disclosure Board.