A Primer on Prop. 1

How the proposed campaign finance law is expected to work

"Shall the city charter be amended to create a public financing system for campaigns of city council candidates (through city bloc grants and matching funds, which may include tax revenues); to limit campaign contributions to $200 per donor; and to provide independent sovereign powers to the City Ethics Review Commission, including subpoena power?"

Unless you were one of the people who gathered signatures to put the Austin Fair Elections Act on the May 4 ballot, you may not know exactly what this ballot language means. What Proposition 1 would make law is a campaign financing system that's admittedly complex (though not as complex as, say, Austin's land development code) and that would cost the city money (though not as much money as, say, the city earns from parking meters). That costing-money part, along with bad feelings over Austin's last attempt to reform campaign finance through citizen initiative (the $100 limit passed in 1998), has led to a lot of static from the establishment, and responsive noises from Prop. 1 advocates -- speaking to the very heart of what we expect from the democratic process.

Backers of Prop. 1 argue that the current system of all-private financing (with or without the $100 limit) favors incumbents, the wealthy, and those with access to special interest money; requires that officeholders spend too much time fundraising; and (in the words of the Act itself) "suppresses the voice and influence of many Austinites" and "undermines public confidence in the integrity of public officials." Opponents and agnostics -- including some folks at this paper, most folks at the other paper, and several members of the current council -- argue that the current system does no such thing; that even if it did, spending public money on campaign financing in a time of city fiscal austerity is not wise or effective; and that reformers said the same things about the $100 limit, and look what happened there.

Though this has been a lively and entertaining debate, it may not have made it much clearer to confused voters what would happen if they vote Yes on Prop. 1. Here's a summary:

1. Contribution limits. Prop. 1 would raise the limit any person could donate to any candidate from $100 to $200. (Prop. 2 would simply repeal the $100 limit, but won't take effect unless Prop. 1 fails.) Political action committees raising money from "small donors" -- no more than $25 per person per calendar year -- could give up to $1,000 to a candidate. Candidates can give (or loan) themselves as much as they want, as the U.S. Supreme Court has dictated.

2. Spending limits. To qualify for public funds, candidates for mayor would have to agree to limit spending to $200,000 in the general election and another $200,000 in the run-off; for at-large council candidates, the limits would be $100,000. (If single-member districts pass, the Ethics Review Commission would get to adjust all these numbers.) They also must agree that no more than 5% of that will be their own money. These would be voluntary limits, but candidates who don't abide by them would still have to abide by the $200 contribution limit. (These limits would be adjustable for inflation, starting in 2005.)

3. The Fair Elections Fund. The amount in this fund -- from which candidates would receive money -- cannot exceed 0.25% of the city's annual budget, which would be $4.6 million for this fiscal year. Estimates for first-year costs of the Act range from $800,000 (from Prop. 1's chief architect, Fred Lewis of Clean Campaigns for Austin) to $1.9 million (from the city's acting finance director, Vickie Schubert), depending primarily on how many candidates participate. Some of this money would come from a voluntary check-off on utility bills, some from lobbying fees (which support the very limited public financing system Austin has now), and some from candidates themselves, but the rest would be "tax revenues."

4. Qualifying for funds. Council candidates would need signatures, accompanied by contributions of exactly $5 each, from 500 or 0.125% of registered voters, whichever is greater; mayoral candidates would need twice as many signatures and $5 bills. (Right now, 0.125% is about 470 people.) This is the "fringe filter" that would, supposedly, keep Jennifer Gale or Leslie Cochran (or otherwise frivolous or unsupported candidates) from getting public funds. This money goes into the Fair Elections Fund.

5. Initial grants. Upon being certified as a candidate (with an opponent) and agreeing to the Act's restrictions, candidates would receive an initial "bloc grant" from the Fund: one-sixth of their spending limit -- i.e., $16,666 for council, $33,333 for mayor. They can get another grant, of the same amount, upon making it to a run-off.

6. Matching funds. Over and above the grant, candidates would be eligible for two dollars from the Fund for every dollar they raise from individual contributors. (Self-contributions and PAC money cannot be matched.) That means council candidates abiding by the spending limit could raise up to $27,776, and receive the balance of their $100,000 in public funds. (Then repeat the process for any candidates who make a run-off, and double the figures for mayoral candidates in both cases.) Matching funds would be disbursed in installments, each time a candidate raised $3,000 in eligible contributions (or $1,000 within two weeks of the election).

7. Raising the ceiling. If a candidate who isn't taking matching funds spends more than $100,000 (or $200,000 for mayor), then the spending limits on his or her opponents go away. Additional money that they raise can still be matched 2-1, up to 50% above the original $100,000 spending limit. So, a council candidate could raise an additional $16,667, get matched 2-1 for a total of $50,000, and then could raise however much more and spend it, but not get matched for it. In Maine, which has public financing for statehouse campaigns, some candidates who aren't participating have nonetheless limited their spending so that their opponents don't get to bust their limits. However, in New York City, which also has public financing, Mayor Michael Bloomberg spent $69 million of his own money without worrying about whether this "helped" his opponent.

8. Independent expenditures. If one or more persons or PACs spends, in total, $25,000 or more against a candidate, or in support of another candidate, in a council race (twice as much in a mayoral race) -- as, for example, Thomas "Hollywood" Henderson did in 2000 supporting Danny Thomas -- then the victim/s (in that example, Willie Lewis) can get $1 from the Fund for every dollar spent by the fat cat, up to half their original spending limit, on top of the funds they raised and earned themselves.

9. The Ethics Review Commission. The commission gets to enforce all these rules, and make the various determinations required by the act, with the "subpoena power" that the city felt necessary to highlight in the ballot language itself. This would make it a much more powerful body than it is now -- as Arnold Garcia pointed out in last Sunday's Statesman, more powerful in this particular context than the City Council. (Garcia seemed to think this is a problem -- but since some of the people to whom the AFEA applies would themselves be members of the council, it's not clear what alternative there would be to a sovereign body like the ethics commission.) end story

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