THE BLOG
09/24/2014 03:55 pm ET Updated Nov 24, 2014

New York, New York

In New York City, candidates for city offices who voluntarily choose to participate in that city's public funding system receive $6 in public funds for each $1 received in small donations (up to a limit of $3.5 million for mayoral candidates). In that system, a small donation is defined as the first $175 a city resident contributes to a candidate. Participating candidates must also observe limits on their spending and on the contributions they accept. The level of such limitations differs according to the office they seek. Candidates for mayor can accept the most money but other office-seekers less.

There is much to approve of in that system, created in 1988. The New York City Campaign Finance Board argues that the system it administers "has enabled New Yorkers to choose leaders who reflect and understand the city's evolving needs." That system, it goes on, has "helped ensure that voters, not money, decide New York City elections." (1) A study prepared by the Brennan Center for Justice comes to a similar positive evaluation. In that study, the importance of small donors in the NYC matching system was compared to the role of similar small donors in races for the NY state legislature, for which no public funding is available. The study found that under the city's system in 2009 "small donors - from a more diverse set of communities" participated in the campaign funding process. As such, the study states that the matching system makes "the pool of donors more representative of the population as a whole." It concludes, "small donor matching funds help bring participants into the political process who traditionally are less likely to be active." (2)

But while there is no doubt that a system such as the one used in New York represents a vast improvement compared to the current wealth-driven politics characterizing almost all electoral races in the United States, it is important not to overstate the achievements secured by the system, nor to conclude that a matching system -- even a generous six to one match - is the best that we can do. The limitations of that kind of system become clear by examining in detail the funding sources for New York City mayoral candidates in 2013.

The strength of the New York system is dependent upon a candidate's ability to secure the small donations that trigger the match. The greater the number of such contributions, the greater the flow of public funds. That means less dependence on big donors. But the converse is also true. To the extent that members of the public refrain from making such contributions, the system falls short. That such an outcome is more real than the Campaign Finance Board acknowledges is suggested by the fact that (excluding the effect of the match) small contributions accounted for only 10.5 percent of the total amount of money of received by all candidates who participated in the matching system. (3)

Thus in New York City Bill de Blasio's campaign reported that it had received 6,243 contributions of $175 or less, resulting in the campaign's receiving a total of $3,994,496 dollars of public funds. Both of these numbers seem large until put into perspective. Those 6,243 small contributors represented less than 1 percent of the 796,000 votes de Blasio received. The roughly $4 million his campaign obtained in public funds came to 29.5 percent of his campaign's expenditures of over $13.5 million. 4. Obviously small contributors made an important contribution to de Blasio's campaign, but the fact remains that 70 percent of his funds were raised in the conventional way -- by private donors who contributed more than $175.

The source of the problem is this. A matching system represents a compromise. It recognizes that the private funding of elections is undemocratic and that to push back against a take-over of the political system by wealthy individuals, it is necessary to provide public funds to candidates. But instead of fully paying for those campaigns, a matching system attempts to leverage small donors to counter big contributions. With that system there has been an increase in the number of small donors. But that group remains small. Private wealth still exercises disproportionate influence.

At best, therefore, the city's matching system is only a partial but nonetheless important success. There has been an increase in the involvement of small donors. People who might otherwise not have been able to tap big donors, but who can raise money from small donors, are now able to run for office. In addition, the six to one match is attractive enough so that candidates devote more attention to the views of small donors than they did in the past. But the fact remains that the funding of elections has been only partially democratized.

Admittedly, a fully funded public system is more costly than even a generous match such as New York's. Those costs could be substantially reduced if TV advertisements were not charged full commercial rates. Nevertheless even with the inflated television and radio budgets that exist today, a complete public funding system is fiscally feasible. In New York's municipal budget of $61 billion, the matching system expended $38.2 million for all races. (5) Democracy deserves a lot more than that.

Sources:
1. New York City Campaign Finance Board, By the People: The New York City Campaign Finance Program in the 2013 Elections (New York: New York Campaign Finance Board, 2014) p. 2
2. Elisabeth Genn, Sundeep Iyer, Michael J. Malbin and Brendan Glavin, Donor Diversity Through Public Matching Funds (New York: Brennan Center for Justice and Wasington: The Campaign Finance Institute, 2012) p. 7
3. New York City Campaign Finance Board, By the People, p. 41
4. Ibid, p. 7, 12, and 13
5. Ibid., p. 5