Public financing of political campaigns

Invest in good government

March 09, 2004|By Christopher Carroll

A PESSIMIST might say the influence of money in politics is like the weather: Everybody complains about it, but nobody ever does anything.

But the Maryland legislature is thinking about doing something. Twin bills introduced by Democrats Sen. Paul G. Pinsky of Prince George's County and Del. John Adams Hurson of Montgomery County propose that legislative campaigns should be publicly financed.

This is not a radical idea. Several other states (and most other democracies) already do it. The argument for public financing is simple: You get what you pay for. In the current system, campaigns are financed largely by special interests. If the public wants a legislature that can resist special interest favors, the public needs to pay for electing that legislature.

Most people understand this intuitively. A December 2002 survey found that most Marylanders believe fund raising is a major source of political corruption, and about three-fourths believe that public funding would make government work more in the public interest.

Opponents of public financing say that it is unaffordable, a serious charge given Maryland's budget problems. But the budget would not be in such a mess if not for special interest loopholes and giveaways.

A good example is the "Delaware loophole," which lets Maryland companies incorporate in Delaware to avoid paying state taxes. A recent report by Progressive Maryland found that eliminating the worst loopholes could boost the state's revenues by $346 million a year, vastly more than it would cost to run a publicly funded election system. But elimination of such loopholes is not likely under the current system, in which 40 percent of campaign contributions come directly from interest groups.

The rest of campaign contributions come mainly from individuals. Much of the money raised from individuals appears to come from a relatively small number of big donors, who probably resemble big donors to congressional campaigns: over 98 percent white, 80 percent with incomes over $250,000, and largely over 60 years old, according to a recent study. Many of the individuals making big contributions are business executives, doctors, lawyers and others with important financial interests at stake in the legislature's decisions.

Both Democrats and Republicans recognize the current system's problems. In the past, many Maryland Republicans have supported public financing as a way to level the playing field in a state traditionally dominated by Democrats. And Democrats are concerned about the ability of business lobbies and wealthy individuals to make large contributions to Republican opponents.

In response, two years ago, the legislature formed a commission, chaired by University of Baltimore Dean Carl W. Stenberg, to study how public financing has worked in other states and to make recommendations for Maryland. The commission concluded that public financing would be a good idea, and its final report is the basis for the Pinsky-Hurson bills.

The principal proposal is based on systems in Maine and Arizona. To qualify for public funding, candidates would have to demonstrate a broad base of support by collecting small contributions from a substantial number of constituents. Qualifying candidates would be allocated funding for primary and general election campaigns based on the size of their districts and other cost factors. Candidates facing particularly well-funded privately financed opponents would qualify for extra public funds to keep races competitive.

In the 2002 elections in Maine and Arizona, more than half of all legislative candidates chose to participate in the public financing systems. Legislators elected with public funding said that they were better able to represent the "broader interests of their constituents," and that less time spent raising funds gave them more time to serve their districts.

The main argument against public financing is cost.

The bills propose several revenue sources, including a surcharge on criminal and civil fines, extra penalties on repeated drunken drivers and a tax check-off like the one that finances the U.S. presidential election system, though it is not clear whether these will be enough. But the difficulty of finding a reliable funding mechanism should not prevent the legislature from passing a bill.

The first publicly funded election would not be until 2010, by which time the current state budget crisis will be long past. And ultimately, whether something is worth paying for depends on whether the benefits outweigh the costs. Far from being unaffordable, the current proposal would cost less than $2 per Maryland resident a year. According to the Progressive Maryland study, special interest loopholes cost about $65 per resident a year.

Is public financing worth it? Do the math.

Christopher Carroll is a professor of economics at the Johns Hopkins University and a member of the board of Common Cause of Maryland.

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