Although the Republican candidates for governor declined public funding in 1978 and 1982, the great majority of eligible candidates have opted to accept the money and abide by the limits since the system was first implemented in 1976. In 1986, when both major party gubernatorial candidates accepted public funding, about a quarter of their campaign budgets were underwritten by subsidies (Alexander 1989, 32-33).
Along with Rhode Island, Minnesota currently has the nation’s highest tax checkoff for public funding: $5. Initially, candidates of the state’s Democratic-Farmer-Labor Party were outdistancing their Republican counterparts in receipt of public funds. But in recent years, Republicans have gained a larger share of the available subsidies (Alexander 1989, 32).
There is mixed evidence as to whether Minnesota’s extensive program has achieved a basic goal of public funding systems: to increase the degree of competition among candidates by “levelling the playing field.” On the plus side, no one has run unchallenged for statewide office since the law was enacted. All but one of the winning candidates accepted public funding and therefore were constrained by spending limits (McCoy 1987).
However, the benefits of Minnesota’s public funding for legislative candidates can be questioned. There is some evidence that candidates in non-competitive races often opt for public financing to pay for their campaigns when the expenditure limits are high enough and the money the program provides is sufficient. But in competitive districts or those in which a strong challenger seeks to unseat an incumbent, candidates may not accept public financing so they can spend as much money as they deem necessary. Generally, Republicans do not participate in public funding as readily as do Democrats.
Expenditure limits also have posed problems for the Minnesota program. In 1980, a year in which both houses of the Minnesota legislature were up for election, the rate of participation in the public funding program dropped to 66 percent from 92 percent four years earlier (Alexander 1989,table 5, 29). At the time, inflation was running in double digits, and the expenditure ceiling had not been raised to take that into account - thereby making the restrictions unattractive to many candidates. After the 1980 election, both spending limits and public funding allocations were tied to the consumer price index, and in the 1990 election the rate of candidate participation was back up to 92 percent.
New York City
Of the four municipalities with public financing, the most extensive program is in New York City. As was the case with the neighbouring state of New Jersey, the New York City program was born of scandal. In response, the City Council in February 1988 enacted public financing legislation, which was signed by Mayor Edward Koch and ratified overwhelmingly by city voters the following November. In 1989, Koch sought re-election under the first test of the new program, losing to David N. Dinkins, then Manhattan Borough president.
Those seeking public funding in New York City must agree to abide by expenditure limits and to demonstrate the viability of their candidacy by raising a relatively modest threshold amount in private donations. Public funds then match private contributions of up to $500 from New York City residents. The program covers all of the city’s elected offices: mayor, City Council president, comptroller, the presidents of New York’s five boroughs and the members of the City Council.
Candidates participating in the New York City program also must agree to limit individual contributions to $3 000. This is far more restrictive than current New York state law, which sets the individual limit at $50 000.
An assessment of the city’s first experience with the new law in 1989 found that it had sharply diminished the role of large contributors - a perennial concern in a city where the powerful real estate industry has often exercised its financial clout in election years.
In terms of candidate participation, the program had its biggest impact in the mayor’s race. Five of the six major candidates opted to participate in the program. The Democratic Party nominee, Dinkins, received about 12 percent of his total receipts from public funding; Republican nominee Rudolph Giuliani received about a fifth of his campaign budget from public funds (New York City Campaign Finance Board 1990, 5). In all, 48 candidates who appeared on the ballot in either the primary or general election participated in the program, and 36 received public funds (ibid., 29).
The program was less successful in bringing electoral competition to City Council races, which - with a few exceptions - traditionally have been low-visibility, one-sided contests. While 33 candidates for the 35 council seats opted into the program, only 25 actually received any public funding (New York City Campaign Finance Board 1990, 16). This may change in the 1991 special elections: the City Council is being expanded from 35 to 51 seats and given enhanced power.
CONCLUDING OBSERVATIONS
As noted at the outset, it is risky to draw comparisons between the United States and Canada in view of the significant differences in their political systems. However, in terms of campaign finance, there are several basic realities that underlie both systems as we enter the 1990s:
Professionalized campaigns are here to stay. The host of professional campaign services relied upon by competitive candidates and parties is costly. No amount of legislative action is going to turn back the clock and de-professionalize campaigns. The issue, rather, is how to finance modern elections in a manner that minimizes the opportunity for corruption, as well as the appearance of corruption.
Money is speech. That tenet lies at the heart of the Buckley decision’s finding that mandatory expenditure limits were prohibited under the provisions of the U.S. Constitution. But it is a principle applicable to any modern democratic society in which free speech is a basic right. To restrict a candidate’s ability to avail himself or herself of the means of promotion can be considered a restriction on speech. Any effort to forestall real or perceived corruption by curtailing the supply of political money must be balanced carefully against basic individual rights.
Unforeseen consequences are inevitable. In democratic pluralistic societies, such as those of the United States and Canada, efforts to regulate the flow of money will never work quite as intended. Some affected parties will seek redress in the judicial process; in the United States, the current structure of campaign finance was shaped almost as much by litigation as by the laws enacted by Congress. The best of intentions often have unintended side effects. In enacting the 1979 FECA amendments, Congress had the purpose in mind of strengthening grassroots political parties. What resulted was the rip tide of soft money that now courses through presidential elections.
The foregoing are among the realities and principles to be kept in mind in evaluating the experience of campaign finance reform and proposing further changes. In the United States, several obvious lessons arise from the experience of the past 20 years:
Expenditure limits develop leaks. Limitations of any kind - whether contribution or expenditure limits – develop leaks. But expenditure limits are the most problematic, as was demonstrated by the Bush-Dukakis race of 1988 and the New Jersey experience (and also, to some extent, by the experience with political interest groups in Canadian elections). In the U.S. political system, candidates at both the federal and state levels have found a multitude of ways to get around the limits by such hard-to-trace forms of political spending as soft money and independent expenditures. The former has reinjected the large contributor into presidential campaigns. The latter has intensified the use of negative advertising, resulting in heightened cynicism in an already disillusioned voting public.
At the congressional level, there is evidence that expenditure limits could place relatively unknown challengers at an even greater disadvantage at a time when races for the House and Senate are growing less and less competitive. The experience at the state legislative level indicates that when a candidate must abide by spending limits to receive public funding, some candidates have chosen to decline public financing. The result is that the candidate must seek that much more private money, which is derived
