Since its inception in 1988, New York City has had the model campaign finance system in the country. It is a system that has survived court challenges, been strengthened by legislative changes, and helped candidates like me compete and get elected. It is a system I am invested in protecting and improving upon during my time in the City Council. But no system in perfect, especially not one as complex and impactful as campaign finance. There is room for improvement, and I offer to this commission proposals large and small that will create a fairer campaign finance system by shifting the balance of power away from the wealthy and well-connected, back toward the people it was designed to serve.
I urge this Charter Revision Commission to consider modest changes to the existing Campaign Finance system that would not put the existing system at risk, while still having a large impact.
Executive Summary of Recommendations:
- Get Big Money Out of New York City Politics: Empower Small
- Match Every Dollar with a Full Public Match – increase the public match from 55% to 85% of the spending limit to match every small dollar.
- Increase the Match on Small Dollars over Big Money – match small dollars contributions of $100 or less at a higher rate than larger contributions.
- Lower Contribution Limits – lower contribution limits to $2000 for citywide and $1000 for borough and City Council because you should not be able to give more to a mayoral campaign than a presidential.
- Democracy Vouchers - provide residents with vouchers to be used toward campaigns.
- A Citizen Legislature: Empower Residents to Run for Office
- Ballot Access Reform – automatically allow residents who qualify for public matching to be on the ballot as an alternative to archaic petition requirements.
- End the Revolving Door between New York City and State: Life Time Term Limits – elected officials may only complete two terms total per office.
- In-district Residency Requirement –candidates must reside in the city for at least 5 years and within their district for at least 1 year.
- Empower the Voice of Residents Over Big Money – Independent expenditures are on the rise and we must limit the influence of big money to amplify the voices of people over corporations.
- Clean Elections – prohibit private money in candidate campaigns.
- Act Now – 2021 presents a unique opportunity to enact reform.
Get Big Money Out of New York City Politics: Empower Small Donors
The current 6:1 match for the first $175 of any qualifying contribution amplifies the influence of small donors and makes it possible for candidates who are not wealthy or who do not have access to wealthy donors to run competitive campaigns for City Council. But an analysis of recent municipal elections shows that large donors and special interests still have a far greater influence on candidates than the 1988 Campaign Finance Act intended.
In 2013, 49% of all contributions to mayoral candidates – totaling $24 million – came from contributions of $4,950, the maximum contribution allowed under law. Only 5%, or $3 million, came from small donations of $175 or less. The same analysis showed nearly the same result in the 2017 election cycle when 47% of contributions to mayoral candidates came from checks of $4,950, again the maximum contribution allowed under law, with less than 10% came from contributions of $175 or less.
This is exactly the kind of circumstance the public matching funds system was created to counteract. We still have a system where half the money comes from a few wealthy donors.
Empowering small donors is at the heart of our campaign finance system, which seeks to reduce the influence of large-dollar donors, encourage everyday New Yorkers to participate by giving what they can, and pave a path for candidates to run primarily with the support of large numbers of local supporters.
Match Every Small Dollar with a Full Public Match
New York’s campaign finance system has one glaring flaw that must be addressed: the arbitrary discontinuation of the 6:1 matching funds payments when 55% of the total spending limit is comprised of public funds. Once this 55% cap is reached, even otherwise qualifying contributions are no longer eligible for the match. This creates a funding gap between the total spending cap and the amount a candidate can receive with the small dollar match. As every candidate will tell you, if you do not try to raise the maximum and keep up with your opponents, you will not be competitive and you will lose.
The “big dollar gap” for City Council is $65,217 escalating to a staggering $2.5 million for mayor. Candidates for mayor are thus forced to make a choice on how to raise $7 million. Collect 1,408 contributions of $4,950 from individuals with special interests who have given to every Mayoral candidate before or rely on the public match and do ten times the work collecting more than 17,920 contributions of $175. Some candidates pursuing the small dollar option who run in communities with residents unable to contribute $175 would instead need to seek 313,605 contributions of $10. Faced with these options, we can understand what is wrong with the system. Politicians who wish to be successful in running for high office must have a single-minded focus on spending the majority of their time chasing high dollar contributors and convincing them to write checks of $4,950 in order to fill a multimillion dollar hole in the City’s current campaign finance system.
Removing the arbitrary 55% cap and matching every contribution allows someone running for mayor to collect 5,689 contributions of $175, raise roughly $1 million in small donations, and have that $1 million matched with $6 million in public funds, thus fully funding a campaign. This would give candidates the means to compete without the need for a single max check from special interests or the need to rely on lobbyists who bundle multiple large checks in order to collect favors.
In 2016, I authored Introduction 1130[1] to the New York City Council. It was cosponsored by 31 of my colleagues and received a hearing the following year. I re-introduced this legislation in late March of this year, Introduction 732-2018, and it already has 21 sponsors. I’m confident that before the year is out, the City Council will use its legislative authority, as we have done many times before, to pass, via local law, meaningful reform legislation that strengthens our campaign finance system. If we should fail however, the people of the City of New York need this Commission to put to the voters a comprehensive set of options to get big money out of our elections and empower everyday residents to run for office.
Failing to eliminate the “big money gap” will undermine any changes this commission presents to the voters and perpetuate a system that fails to level the playing the field between the wealthy few and the other 8.2 million New Yorkers our government is supposed to serve.
Increase the Match on Small Dollars Over Big Money
But let us not ignore the other meaningful changes that may not qualify as a structural change. To further incentivize candidates to seek small donations, we should make those small donations worth more. Raising the multiplier higher than 6:1 and implementing a still higher multiplier for donations under $100 will better ensure small donors are valued as much as large donors.
In 1997, when New York’s matching rate was 1:1, city council candidates had an average of 176 small donors ($250 or less) per 100,000 participants. As the match was increased to 4:1 in 1998 and then 6:1 in 2007, the number of small donors grew to 197 and 218, respectively. By increasing the value of small donations, the campaign finance system incentivized candidates to seek them out. Accompanying these changes was a lowering of the dollar amount that was matched. The initial $1,000 was reduced to $250 and then $175.
We have every reason to believe a similar increase of the multiplier would result in even more small donors.[2] To encourage small donations, the multiplier should be increased to 10:1 only on contributions of $175 or less. If a campaign receives, in one contribution or an aggregate of contributions, a sum from a single contributor exceeding $175, then the current 6:1 match on the first $175 applies. As we’ve seen, increasing the matching ratio leads to more contributors.
The current contribution limits of $4,950 for citywide, $3,850 for borough wide, and $2,750 for City Council presents an escalating incentive to raise large contributions. All of these amounts are higher than the $2,700 limit on donations to a presidential candidate. We should have a contribution maximum of $2,000 for citywide candidates and $1,000 for borough president and City Council.[3]
In 2017, the City of Seattle implemented a first of its kind program designed to democratize the funding of elections by making $100 vouchers available to all registered voters. These vouchers can be used toward campaign contributions to candidates who opted into the program. Participating candidates are prohibited from accepting contributions exceeding $250.
The results of the program were encouraging with double the number of people making contributions in 2017 compared with the previous municipal election in 2015. Nearly 90% of those were first time contributors to a political campaign and included an increase in contributions from all geographic and demographic segments of Seattle. With an average contribution of $82, the voucher program lowered by half the average contribution compared to 2015. Increases in the number of candidates, candidates of color, and the number of competitive campaigns prove the program was successful at increasing the pool of candidates who were able to run and run competitively.[4]
In a city where the median household income is $55,191, more than half of New Yorkers would find it hard to spare $10, let alone $100 to support a candidate of their choosing. The Charter Revision Commission should consider allowing any resident to designate up to $100 in each election cycle.
A Citizen Legislature: Empower Residents to Run for Office
Our legislatures should mirror the people they serve. Without a way for everyday New Yorkers to mount competitive campaigns for elected office, our legislatures are missing the array of life experiences they are empowered to address. We need elected officials who have lived what their communities have lived and we must give those individuals the opportunity to enter public life.
Ballot Access
We should also take this opportunity to offer a different method to gain access to the ballot. Currently, prospective candidates have 37 days to collect 450 signatures if running for City Council, 2,000 for borough president, and 3,750 for citywide office in order to appear on the ballot. This process has given rise to “ballot bumping” by political clubs and created a cottage industry of lawyers hired by campaigns to knock their opponents off the ballot, often on technicalities like an incorrect or missing date at the top of signature page. Mayor de Blasio was briefly removed from the ballot for public advocate in 2009 because although he collected exponentially more than the required the number of signatures, the Board of Elections (BOE) incorrectly claimed the cover page de Blasio submitted with his signatures listed 131 folders when the BOE counted 132. Admitting fault, BOE voted to reinstate de Blasio on the ballot.[5]
We should allow candidates a spot on the ballot when they qualify for matching funds. This means any candidate who convinces the required number of residents from their proposed jurisdiction to give at least $10 and raises a minimum amount of money in small dollars:
- 75 and $5,000 for City Council,
- 100 and $10,000 - $50,094 for Borough President,
- 500 and $125,000 for Public Advocate and Comptroller, and
- 1,000 and $250,000 for Mayor[6]
In 2016, I authored Introduction 1129[7] to the New York City Council. I have resubmitted this legislation to the Council, Introduction 730-2018, and intend it to be included in any reform legislative package of the Council.
Requirements for ballot access exist to better ensure candidates have some measure of support from the communities they seek to represent. A campaign donation of $10 is certainly a better demonstration of someone’s support than a hastily scribbled signature from a voter as they rush into the subway.
End the Revolving Door between New York City and State: Life Time Term Limits
New York City-based legistors account for 26 State Senators and 65 State Assembly Members. In 2016, 60 (66%) legislators faced no challenge in the party primaries. Of the 24 who did face challengers, 3 lost. This is a reelection rate of 97%. With a registration advantage of 4:1, New York City is dominated by Democrats and general elections are largely pro forma. In fact, 23 city-based state legislators faced neither a primary nor general election opponent. No wonder the average tenure in the State legislature is over a decade.[8]
All 59 municipal offices were on the ballot in New York City in 2017, all but 10 featured incumbents. Of them, 23 (47%) were uncontested in the primaries. None lost their primary races and only 1 lost the General Election. This constituted a reelection rate of 98%.[9]
Incumbents are nearly impossible to unseat and what we see now is officials moving back and forth between the state capitol and city hall. For while the city has term limits, they are merely limits on the number of consecutive terms one can serve, not a lifetime limit. While the City’s existing campaign finance system better ensures a candidate can financially compete against an incumbent, the power of incumbency (or virtual incumbency in the case of an official switching between levels of government) is still too great a hurdle for otherwise qualified candidates to overcome or even gain momentum against.
A concern among good government advocates is that state officials, drawn to the higher salaries offered for municipal elected offices, will run for municipal office and remain until term limited. Following this (or the year before given municipal and state elections occur one apart), they will seek their old seat in Albany for four to eight years, then once again return to the City. Over and over ad infinitum. This kind of musical chairs discourages new candidates and ultimately does a disservice to the voters.
In-district Residency Requirement
Willing donors come easier to candidates who have ties to their districts and have taken the time to know the voters over a longer period of time than just election season. Yet candidates seeking municipal office are only required to reside within the district they seek to represent by Election Day. As a result, those who seek elected office simply to become an elected official engage in “district shopping” where they seek out, and then move into, the district they feel they can win most easily. In the 2017 election cycle, a candidate moved into Council District 4 from a neighboring district just to run for office. After this candidate lost to someone who grew up and lived in the district, the candidate moved out. Still other examples include candidates moving into the district on the day of the General Election.
Even more egregious examples have occurred in districts the real estate industry has sought for development. Candidates and elected officials have given generous deals to real estate, often over the objections of the community often accusing them of “selling out there communities,” while simultaneously accepting campaign contributions from the very real estate developers who are benefiting. When their term, their elections lost, and the real estate development underway, they have accepted a job working in real estate and moved out of the district, leaving the community stuck with a development deal they didn’t want and the now-former official living somewhere else.
Article III Section 7 of the New York State Constitution requires candidates for legislature to have resided in the State New York for a minimum of 5 years and the specific district they wish to represent for a minimum of 12 month immediately prior to the election. Applying this Constitutional Requirement to require 5 years of residency in New York City and 12 months residency in the council district or borough would deter “district shopping” and better ensure candidates are running because they want to represent their community rather than themselves.
Empower the Voice of Residents Over Big Money
As we strengthen New York City’s campaign finance laws to discourage big money from candidates and their campaigns we must also address money spent on our elections from outside the campaign finance system under Citizens United.
I ask the Commission to consider applying the same contribution limits and required disclosure to these entities as we currently apply to candidates and adopt other innovative solutions that the courts have upheld to limit the pervasive influence of Citizens United and corporate money.
If the intent of this Commission is to remove the power of large donations, lobbyists, and special interests, the ultimate solution may be to simply replace the entire campaign system with one funded solely on public funds. Known as Clean Money, Clean Elections, this system, already in place in Arizona and Maine, almost completely removes the need for candidates to spend hours each day fundraising, as long as they demonstrate enough community support by other measures. Instead, the system provides those candidates with full public funds to run their campaigns, freeing up at least 50% of a candidate’s time to interact with voters rather than wealthy donors.
Originally passed in Maine in 1996 by citizen referendum and expanded in 2015 by another vote of the people, Clean Elections candidates are prohibited from raising private donations for their campaigns and must meet rigorous thresholds to qualify for public funds.
Arizona’s Clean Elections program was approved by voters in 1998 and went into effect in 2000. By 2002, 52% of all general election candidates ran as Clean Election candidates. By 2008, that number had risen to nearly 65%. Former Governor Janet Napolitano was the first statewide elected official to run successfully as a Clean Elections candidate. In 2008 she wrote that under the old system, she collected fewer than 3,000 contributions. Under the Clean Elections system however, she collected approximately 10,000 contributions of $5. By her own account, the incredible amount of time freed up by not having to “dial for dollars” allowed her to spend time, often face-to-face, with the people she sought to serve.
Clean Money, Clean Elections is the next logical step in New York City’s campaign finance system. A system that already funds 55% of a campaign for candidates who demonstrate community support and enjoys both a high participation rate and high public support can easily adapt to a fully funded system. The benefits are an even larger pool of qualified and diverse candidates and increased attention to voters’ issues.
Conclusion: Act Now
This Charter Revision Commission has an opportunity to correct this problem now, so that we do not have another cycle of municipal elections where the wealthy few get to decide who runs our great City. Forty-nine municipal offices are scheduled to be “open” for the 2021 election. This unprecedented turnover presents a rare opportunity to encourage candidates to seek small donors and enter office indebted only to the people they serve. With an incumbency advantage of 98%, our next opportunity will not come around until at least 2029. If we want our government to mirror our population and serve everyone, we must act now. For if we want our democracy to be for the people, it must be funded by the people.
[1] http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=2637108&GUID=…
[2] http://www.cfinst.org/pdf/testimony/NYCCFB%20Testimony_Malbin_29Jan2018…
[3] https://transition.fec.gov/pages/brochures/citizens.shtml
[4] http://www.seattle.gov/democracyvoucher
[5] https://www.nytimes.com/2009/07/29/nyregion/29ballot.html
[6] http://www.nyccfb.info/candidate-services/limits-thresholds/2017/
[7] http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=2637110&GUID=…
[8] http://www.gothamgazette.com/state/6536-2016-again-highlights-new-york-…
[9] http://www.citizensunion.org/2017_primary_election_open_seats_in_the_ne…