Action Guide March 7, 2000

DESCRIPTION

Proposition 25 amends the Political Reform Act of 1974 to increase campaign finance disclosure requirements, limit campaign contributions, and establish partial public financing of campaign advertising for state candidates and ballot initiative committees that limit their spending.

The measure establishes campaign contribution limits for individual donations to candidates for statewide office of $5,000 per election, and of $3,000 for legislative and local offices. Limits would be adjusted for inflation. Individuals may also donate $5,000 per year to Political Action Committees (PACs), and can donate no more than a combined total of $50,000 per year directly to candidates. Contributions by corporations to candidates are prohibited. Contributions from a political party to a candidate are limited to 25% of the voluntary spending limits listed below. Contributions to political parties are not limited if they are for uses other than for electronic media advertising or for support of or opposition to specific candidates; contributions to parties for those uses are limited to $25,000 per year. There are no limits on donation of personal funds to a candidate's own campaign. Candidates for statewide offices may not accept contributions until one year before the primary election or more than 90 days after the election. The lower limitations in Proposition 208 would prevail if that measure is ultimately upheld by the courts.

The measure establishes voluntary spending limits for state candidates and ballot initiative campaigns. The limits would be $300,000 in the primary and $400,000 in the general election for the Assembly, $500,000 primary and $800,000 general for the Senate or Board of Equalization, $6,000,000 primary and $10,000,000 for Governor, $1,500,000 primary and $2,000,000 general for other statewide offices, and $6,000,000 per election for state ballot initiatives. Campaigns that violate voluntary limits would be subject to a fine, but campaigns adhering to the limits would have their limits raised by two and a half times if opposing campaigns exceed specified fund raising or spending levels.

If candidates for statewide office and for or against ballot initiatives have accepted voluntary spending limits, they could receive public funding through credits for broadcast media advertising. Credits would be up to $1 million for a candidate for Governor or a state ballot measure, and up to $300,000 for other statewide offices. Campaigns receiving more small contributions would get more credits than ones with larger contributions. The credits would be distributed from a general fund appropriation of $1 per state income taxpayer, estimated to be $17 million per year.

Campaigns accepting the voluntary limits could also participate at no cost in a voter information packet program to be assembled from materials supplied by the campaigns and mailed by the Secretary of State four times before each election. Campaigns not accepting limits could participate by sharing the cost of the packets. Both the information packets and the regular sample ballots would show which candidates and measures had agreed to spending limits. Candidates would have to collect a specified number of valid signatures of registered voters to qualify for funding in the primary, and the level of funding in the general election would be tied to a candidate's share of the vote in the primary.

The Secretary of State would set up a campaign website for information on state candidates and initiatives, including financial disclosure reports. The site would also contain links to the campaigns' own websites. This would be extended to some local elections beginning in 2002.

The measure also adds provisions for earlier disclosure of large contributions, disclosure in certain candidate and ballot measure campaign advertising of their top two contributors, campaign spending to date and whether spokespersons had been paid. Ballot pamphlets would list the top five contributors of over $25,000 for and against ballot measures. Petitions being circulated for ballot measures would have to show whether the circulator was paid or a volunteer.

The measure would raise the level at which major donors have to report their combined total of political contributions a year from the current $10,000 to $100,000, but the Secretary of State would have to compile a list of all donors of $10,000 or more a year for verification by the donors.

In addition to the $17 million a year for advertising credits, the Legislative Analyst estimates that the Secretary of State would have costs of about $35 million for the new information packets and several million dollars for other provisions. The Fair Political Practices Commission (FPPC) estimates that it will have costs of about $1.6 million to monitor and enforce the new provisions. Local government could also have significant added costs, mainly for maintaining local campaign websites.

BACKGROUND

The Political Reform Act of 1974 established disclosure requirements for contributions and expenditures for state and local candidates and for ballot measures. Reports are filed with the Secretary of State and local officials, and the FPPC enforces the law. Since 1974, several initiatives and numerous legislative bills have attempted to impose limits on campaign contributions and spending. Most recently, voters in 1996 approved Proposition 208, an initiative sponsored by the LWVC and other groups to establish limits on campaign contributions to candidates, voluntary limits on campaign spending, and restrictions on the period for raising campaign contributions, and to require identification of large donors in campaign ads on ballot measures. The measure was challenged in court, litigation is continuing, and it has not been implemented. One contention of the lawsuit is that the contribution limits in 208 were too low to permit candidates to run adequate campaigns. A Missouri case (Nixon v. Shrink Missouri Government PAC) raising the same issue has been argued before the U.S. Supreme Court and will be decided this year, and the California case is not expected to be decided until a ruling is announced in Shrink Missouri.

Any laws regulating the conduct of campaigns are subject to the constraints imposed by Buckley v. Valeo in 1976 and other cases. Buckley held that campaign contributions may be limited to avoid corruption or its appearance, but that any other-than-voluntary limits on candidate spending are disallowed in the interest of free speech. Limits on expenditures are permissible only if a candidate agrees to them in exchange for meaningful incentives. Also on free speech grounds, expenditures on behalf of a candidate made independently of his or her campaign, or the right of a candidate to spend unlimited amounts of his or her own money to get elected, cannot be abridged. (From LWVCEF In Depth: Analysis of Ballot Measures for the March 2000 primary election.)

IMPORTANT POINTS

• The League of Women Voters continues to support real campaign reform, including some public financing of candidates' campaigns, but this seriously flawed measure is not the answer.

• The contribution limits ($5,000 at the state level and $3,000 at the legislative and local level) are too high, especially at the local level. They exceed current federal limits, current local limits in many jurisdictions, and the limits that have previously been supported by California voters. They are for contributions per election, so the totals double for an election cycle including both a primary and a general election.

• Proposition 25 allows an individual to contribute a total of $125,000 per election cycle to both state candidates and party committees.

• Proposition 25 limits expenditure of contributions to parties for electronic advertising and some explicit campaign activities, but allows unlimited "soft money" contributions to be used by the parties for other campaign-related activities, such as voter registration and turnout, staff salaries and operating expenses, transfers to other party committees and fundraising--freeing up "hard money" contributions for use for more direct campaign activities.

• The amount of public funding available under this measure would provide such a small percentage of what is now spent on campaigns that few major candidates are likely to participate in that program and accept its limits.

The rebuttal to the supporters' arguments was signed by Larry McCarthy, President, California Taxpayers' Association; Wayne Johnson, President, California Teachers Association; and Allan Zaremberg, President, California Chamber of Commerce.

Other opponents mentioned in the ballot arguments include the League of Women Voters.

RESOURCES

Taxpayers for Fair Elections, 650-340-0470, email NoProp25@aol.com, www.NoProp25.com