Public Campaign Funding Gains Steam to Counter Big Donors’ Sway

Originally published in Bloomberg Businessweek on September 16, 2021.
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When Christina Henderson, a new at-large member of the Council of the District of Columbia, first considered running for office, one of her worries was whether she could raise enough money to be competitive. “I was not independently wealthy. Most of my friends worked in the public sector,” says Henderson, who was previously a staffer on the Council.

But D.C. had begun public financing before the 2020 election cycle. The program provides candidates who agree to accept only small contributions with a 5-to-1 match for every dollar raised from a D.C. resident. Henderson took her chance, won her seat, and credits the program with giving her a path.

“One of the best things, as an elected official who plans to continue to participate in public financing, is that I don’t have to spend my term fundraising or worrying about resources for the next election,” she says. “I can just do my job.”

report in August from the D.C. auditor found the program, which distributed almost $4 million to candidates in 2020, increased both the number of people who ran for office and those who donated to local campaigns.

Public financing of elections has been around for decades in the U.S. Today there are at least 27 programs in states, cities, and counties (most but not all of them Democratic), with models ranging from direct candidate grants to small-dollar matching. Advocates say public financing can stem corruption, empower a public that too often feels marginalized by special interests, and diversify public bodies from school boards to Congress.

The idea has been gaining traction: New York City and San Francisco both moved to bolster their existing programs, and new programs in Baltimore and Portland, Ore., as well as the one in Washington, have gotten off the ground. But there are still questions about how much public financing can mobilize new donors at the local level. And it faces a test in Congress this fall as part of a voting rights package.

November will be the first time Democracy Vouchers are used in a mayoral election in Seattle. Under this program, introduced in 2017, vouchers are mailed to registered voters, who can then donate them to candidates. “Seattle’s model is really unique, because it doesn’t require residents to have disposable income to participate,” says Jennifer Heerwig, a sociologist at the State University of New York at Stony Brook. After a nonmayoral Seattle election in 2017, Heerwig and other researchers found that voucher donors were more representative of the population in age, income, and race than cash donors. In 2019, the program’s second cycle, the number of residents using vouchers almost doubled, to about 7%.

This year the top two vote-getters in August’s mayoral primary, Bruce Harrell and Lorena González, redeemed the fewest vouchers among the five candidates who chose to use them, and outside spending soared. The two leading PACs that supported Harrell and González, for example, raised almost seven times more money than the top vote-getters did combined in the last election.

Alex Koren, González’s campaign manager, says they’re seeing a significant uptick in voucher contributions since the primary ended and expect to max out on redeeming vouchers this month. Harrell’s campaign didn’t respond to a request for comment, but data shows it’s already maxed out.

Not everyone is sold on the merits of public funding, even in blue cities. In May voters in Austin rejected a ballot proposal that would have established a city voucher program such as the one Seattle uses. Polls suggest voters like the idea of reducing the influence of big money in politics, but they’re less keen to put their own tax dollars toward a solution.

Experts say public-financing programs can suffer from not being generous enough, hampering candidates who might choose to participate—as is the case with the system for presidential campaigns, which no general election candidate has taken part in since 2012. When Republican Doug Ducey ran for Arizona governor in 2014, he declined public financing and was able to raise more than double the amount of his primary competitors who opted in.

“The programs will say, ‘Take these public funds, but don’t spend over this amount or else you’re not eligible to take the public money,’ which is an invitation for all these outside groups to spend tons of money,” says Raymond La Raja, a political scientist at the University of Massachusetts at Amherst. “And that’s exactly what happens.”

HR 1, the comprehensive voting rights bill the House of Representatives passed in March, has a provision for voluntary 6-to-1 matching for small congressional campaign donations up to $200. To avoid political blowback from using taxpayer funds, it would be financed through a new fee on criminal and civil fines, fees, and settlements with banks and corporations. The Congressional Budget Office estimated the new fees would reduce the federal deficit by almost $1 billion over a decade. HR 1 would also authorize a voucher program to be piloted in three states, where voters would receive $25 to donate to congressional candidates.

Democratic Representative John Sarbanes of Maryland, the lead sponsor of HR 1, says there’s “good momentum” for the public-financing provision. While key Senate swing voter Joe Manchin of West Virginia has expressed reservations about the size of HR 1, he co-sponsored a compromise bill that Senate Democrats introduced on Sept. 14 that included 6-to-1 small-donation matching. Even a trimmed-down package may not garner the 10 Republican votes it would need in the Senate. Minority Leader Mitch McConnell has attacked the public-financing proposal specifically as “piles of federal dollars going to yard signs, balloons, and TV ads for candidates at least half of Americans disagree with.”

Federal public financing may hinge on the fate of the filibuster. “I think whatever represents real reform, sadly, by definition, will be something that the current Republican leadership in the Senate will stand against,” Sarbanes says. “If that’s the reality we face,” he says, “then you have to look at resetting the rules. And I think that conversation is ongoing among Senate Dems.”