A Brief History of Public Financing Programs for Elections

Prepared by Christine Bachrach, IndivisibleHoCoMD

April 14, 2019

The history of public financing for elections goes back more than a century.  

The first public financing bill was introduced in Congress in 1904.  In 1907, Teddy Roosevelt became the first president to argue for public financing, warning of the dangers of allowing corporations to contribute to presidential or national campaigns.  However, no action was taken at the federal level for another 64 years.

The Federal Election Campaign Act (FECA) was passed in 1971 and amended in 1974.  It required disclosure of contributions and expenditures, imposed contribution and expenditure limits for individuals and groups, set spending limits for campaigns, candidates, and groups, implemented a public funding system for Presidential campaigns, and created the Federal Election Commission to oversee and enforce the new rules.  The public funding system matched funds raised by the candidates if they agreed to spending limits.

This public funding system worked well from 1976 to 1996, through 6 presidential elections.  In 2000, George W. Bush became the first nominee of either major party to pass up public matching funds during the primaries and to rely solely on money raised by his own campaign. No presidential candidates have used the public financing system since John McCain used it in the 2008 election.

Several factors contributed to this decline: the high cost of running for president, the rise in SuperPAC expenditures on campaigns, and declines in taxpayer participation in funding the system. Expenditures on presidential campaigns have risen sharply, from about $350k in 2000 to nearly $3 billion in 2012, shortly after the Supreme Court’s ruling (Citizens United v. Federal Election Commission) striking down limits on campaign contributions by corporations, unions or individuals.  During this 12-year period, there was an 18-fold increase in PAC contributions and expenditures, compared to less than a 6-fold increase in individual contributions. Today more than $300 million of public funds are available for campaigns, but there are no takers.  HR-1 proposes modernizing the system to catch up with today’s far higher campaign costs, but Republicans oppose it.

Congressional elections remain entirely privately funded and are not covered by the FECA.

At the state level, Minnesota was the first to establish a public financing program (1974); Wisconsin followed shortly after in 1977.  The table below shows all states and municipalities with programs still in effect as of 2012 with the dates they were established.  

Since the first programs were enacted in the 1970s, federal courts have consistently supported some aspects of public financing but struck down others.  In Buckley v. Valeo (1976), the U.S. Supreme Court upheld the presidential public financing program while striking down a number of specific provisions. It ruled that the program was not “to abridge, restrict, or censor speech, but rather to use public money to facilitate and enlarge public discussion and participation in the electoral process, goals vital to a self-governing people.” At the same time, it ruled that candidates cannot be required to use public financing and struck down limits on campaign expenditures.  A subsequent ruling by the court (Arizona Free Enterprise v. Bennett, 2011) further restricted some aspects of public financing programs but stated that “governments may engage in public financing of election campaigns and that doing so can further significant governmental interest [s], such as the state interest in preventing corruption.”

Public support for programs has been variable. While public financing is drawing increased support in recent years, voters and their representatives have rejected or repealed programs as recently as 2013.  This occurred in Massachusetts in 2002, California in 2006, Alaska in 2008, California and Portland, Oregon in 2010, Wisconsin in 2011, and North Carolina in 2013.

States and Cities Offering Full Public Funding as of 2012

Jurisdiction

Election Contests for Which Public Funding is Available

Year Approved

Year of Implementation

Arizona

Statewide and legislative races

1998

2000

Connecticut

Statewide and legislative races

2005

2008

Maine

Statewide and legislative races

1996

2000

Minnesota

Statewide and legislative races

1974

1976

New Jersey

Legislative (pilot project)

2004

2005

New Mexico

Public Regulation Commission

2003

2005

North Carolina

Judicial elections

2002

2004

Vermont

Governor and lt. governor

1998

2000

Albuquerque,NM

Citywide races

2005

2007

Portland, OR

Citywide races

2005

2006

New York City, NY

Citywide races

1988

1990

Source: https://www.citizen.org/sites/default/files/short-history-of-public-financing-of-elections.pdf

For further information:

https://www.citizen.org/sites/default/files/short-history-of-public-financing-of-elections.pdf

http://reclaimtheamericandream.org/brief-public/

https://bipartisanpolicy.org/wp-content/uploads/2018/01/Trends-in-Campaign-Financing-1980-2016.-Zachary-Albert..pdf