Proposition 89: Public financing measure an election fix or a bigger mess?

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Sacramento Bee (California)

For the money spent on candidates and ballot measures thus far this year, California could run its 120-member Legislature with a staff of 2,200 for an entire year — and have more than $160 million left over.

The campaign money is private, not public, but the amount is staggering, exceeding $400 million, an average of $972 per minute, $58,333 per hour or $1.4 million per day through last Thursday, records show.

If divided equally among California neighborhoods, the massive pot already would mean an extra $31 for every household, with mountains of additional cash expected by Election Day.

Many of the state’s political donations come from special interests, prompting a backlash, Proposition 89, on the Nov. 7 ballot.

The measure would provide public financing for state candidates and place new restrictions on ballot-measure campaigns.

“In politics, you get what you pay for — and until the public pays for elections, they’re not going to get an honest government,” said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights.

But critics say Proposition 89 would make the election system worse by spending scarce public funds on negative TV advertisements, allocating tax dollars to fringe candidates, and reducing the information that voters receive by restricting corporate spending on ballot measures.

“I don’t think anybody is saying that the current system isn’t broken, or doesn’t have its problems, but Proposition 89 would make an even bigger mess of the situation,” said Robin Swanson, spokeswoman for the No on 89 campaign.

The initiative would tilt the playing field to give corporations less clout on ballot issues, thus benefiting the California Nurses AssociationProposition 89‘s author — and tribal governments, trial lawyers and some nonprofit groups, opponents claim.

Proponents counter that Proposition 89 simply attempts to eliminate an existing inequity in which corporations, unlike unions or nonprofit agencies, can write checks for millions of dollars from commercial profits.

Momentum for change has been fed, in part, by seemingly endless fundraising.

Gov. Arnold Schwarzenegger, for example, has solicited more than $100 million for his re-election and ballot measures since coming to Sacramento in 2003.

Phil Angelides, Schwarzenegger’s challenger, has gotten a huge boost from Sacramentan Angelo K. Tsakopoulos and the prominent developer’s relatives, who have donated $11.2 million for ads promoting the Democrat.

Proposition 89 is a complicated, 55-page proposal containing two key elements: one promising public financing to candidates running for state offices, the other restricting ballot-measure spending by corporations.

Arizona and Maine have implemented similar systems of public campaign financing, but Proposition 89 would make California the first state to limit ballot-measure spending.

Key elements of the public-financing component include:

Income taxes for corporations and financial institutions would be raised to generate an estimated $200 million annually for candidate campaigns.

Candidates seeking public funds would need to demonstrate minimal support by soliciting a specified number of $5 contributions.

Public financing would vary by office sought — from $400,000 for an Assembly candidate to $15 million for a gubernatorial candidate in general elections. Lesser amounts would be available for primary elections and minor-party candidates.

Dollar-for-dollar subsidies would be provided when a publicly financed candidate is outspent by a wealthy opponent or is targeted by an independent expenditure committee.

Nobody would be obligated to accept public funding, but candidates who rely on private donations would face far tighter contribution limits than exist now.

Proposition 89 also would cap donations to independent expenditure committees, candidate-controlled committees and cumulative contributions to candidates statewide.

Donna Gerber, of the nurses association, calls the state’s current system “cash-register politics.”

“We’ve too often seen the wishes of voters thwarted by the disproportionate influence of developers, oil companies and other special interests,” said Bill Magavern of Sierra Club California.

Supporters say Proposition 89 would lead to less fundraising and more accountability, candidates and competitive elections.

But Allan Zaremberg, president of the California Chamber of Commerce, said tax dollars should be used for schools, health care or other vital needs — not politicians.

“Nowhere do I see any support for California’s very scarce and dear tax dollars to be spent on negative ads,” he said.

Proposition 89‘s most controversial provision would limit corporations to spending $10,000 from their treasuries on ballot measures.

Corporations could spend unlimited sums only if the money came directly from company officials and shareholders — not profits — through political action committees.

Proposition 89 could fundamentally change the size and scope of corporate ballot-measure campaigns, while not affecting business-as-usual by the nurses association and various other union or nonprofit groups.

Chuck Idelson, a spokesman for Proposition 89, said change would make the system fairer: Corporations would be forced to do what unions do now, rely upon their own members to finance political causes.

But corporations claim they would be placed at a significant disadvantage, because unlike unions, they cannot assess monthly dues to tens of thousands of members.

“If they felt that big money was the problem in political campaigns, they should have restricted everybody, not just the people that happen to be their political opponents,” said Jeff Flint, a campaign strategist against Proposition 89.

Wealthy Californians could continue to spend unlimited sums on ballot measures.

Though written by a labor union, Proposition 89 is opposed by the California Teachers Association and several other powerful labor groups.

Some labor leaders object to a candidate-related provision: No group could spend more than $15,000 overall to support or oppose candidates in a given year.

Other unions fear the ballot-measure spending restriction, because it excludes only unions or nonprofit groups that do not affiliate with or accept donations from businesses.

Because some teachers receive supplemental private income for tutoring, coaching or other activities, CTA fears it could be lumped with corporations under Proposition 89.

Idelson, of the nurses association, which is bankrolling much of Proposition 89‘s campaign, said the opposition is funded largely by insurance firms and large corporations that are protecting themselves, not voters.

“The entire opposition argument boils down to one point,” he said. “They have disproportionate influence in this political system today, they love it, and they want to keep it,” he said.
The Bee’s Jim Sanders can be reached at (916) 326-5538 or [email protected].

CAMPAIGN 2006 / Proposition 89; Second in a series of 13 stories examining the propositions on the Nov. 7 ballot.

Campaigning under Proposition 89 Proposition 89 would provide public financing for state political campaigns through a tax increase on corporations and financial institutions. To be eligible for public financing, major-party candidates would have to collect a minimum number of $5 donations, depending on the office they are
seeking. The money would go to the state.

Office / $5 donations Required / Financing: Primary / General Election
Assembly / 750 / $250,000 / $400,000
Senate / 1,500 / $500,000 / $800,000
Board of Equalization / 2,000 / $250,000 / $400,000
Statewide offices / 7,500 / $2 million / $2 million
Governor / 25,000 / $10 million / $15 million

Sources: California secretary of state; Bee research by Jim Sanders

Consumer Watchdog
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