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Political Campaigns. Public Financing.
Corporate Tax Increase. Campaign Contributions and Expenditure Limits.
Initiative Statute.

THE QUESTION

Should eligible candidates for state elective offices receive public campaign funding that is supported by new taxes on corporations and financial institutions, and should contribution limits be imposed on those candidates who do not receive public campaign funding?

THE SITUATION

Candidates for state office collect private donations from individuals, corporations, unions, political parties, and other organizations. Proposition 34, approved by the voters in November 2000, set campaign contribution restrictions depending on the office and type of contributor. For example, an individual can give a candidate for the Assembly up to $3,300, but there is no limit on contributions by a political party. Anyone can create a committee separate from a candidate's campaign and spend any amount on TV ads and other media. There are no limits on the amount that can be donated for state ballot measure campaigns.

THE PROPOSAL

Proposition 89 would:

• Provide public funding for candidates for state office who meet certain requirements and agree to contribution limits; these candidates would receive more money to match an opponent who did not accept public funding and limits
• Lower the allowable contribution amounts for candidates who choose not to receive public funding
• Place limits on corporate and candidate contributions to ballot measure campaigns
• Increase the tax rate on corporations and financial institutions by 0.2 percent to provide the public funds for campaigns.

FISCAL EFFECT

A new tax on corporations and financial institutions would raise over $200 million each year to provide public funding for political campaigns.

WHAT A YES OR NO VOTE MEANS

A YES vote means that candidates for state office could choose to receive public funds to pay for the costs of campaigns. Candidates who do not accept public funds would be subject to lower contribution limits. Taxes on corporations and financial institutions would increase by 0.2 percent to pay for public financing of political campaigns.

A NO vote means that candidates for state office would continue to pay for their campaigns with private funds subject to current contribution limits. The tax rate on corporations and financial institutions would not change.

SUPPORTERS SAY

• Prop 89 provides public financing to candidates who stick to strict spending limits and reject private contributions from corporations, other organizations, and individuals.
• It provides funds for public financing by a modest increase in the corporate income tax, raising it from 8.84 percent to 9.04 percent.
• It limits to $10,000 the amount corporations can spend directly on ballot measure campaigns.

OPPONENTS SAY

• Prop 89 increases taxes to give politicians public money to produce negative TV ads and junk mail.
• It limits the ability of many small businesses to back candidates or have a say about ballot measures.
• It allows unions to make unlimited contributions to ballot measure campaigns while shutting out small businesses.

FOR MORE INFORMATION

PRO   877-886-8389, www.89now.org
             800-440-6877, www.yeson89.org

CON   916-708-7824, www.noprop89.org