Public Financing for Candidates Drying Up

State public campaign funding for key races is drying up, a situation with significant implications for a number of candidates in this coming election season.

The funding for three Council of State races (auditor, insurance commissioner and superintendent of public instruction) has virtually run out, while “rescue funds” will no longer be available to supposedly level the playing field in appellate court races.

The public funds for Council of State races come primarily from appropriations by the General Assembly, but there has been no money designated for that purpose since 2008. Other financing comes from a $3 check-off on state tax returns for public campaign funding. Taxpayers can designate whether the money goes to the Republican, Democratic or Libertarian parties. If the taxpayer indicates no preference the funds are evenly divided among the parties. The check-off generates about $1.5 million each year.

The Democratic-led legislature, however, siphoned off $1.5 million from the Council of State campaign fund in 2010 to shore up the general budget. This raiding of funds, combined with a lack of General Fund support, has left the public campaign fund virtually dry. The Council of State public campaign fund now holds only a little over $427,000.

The lack of funds is leaving the future of public campaign financing in doubt because a candidate for Council of State opting for public financing must receive no less than $300,000. In other words, the fund doesn’t have enough money to help more than one campaign. Thus public campaign financing for Council of State campaigns is for all practical purposes suspended for the 2012 elections.

Insurance Commissioner Wayne Goodwin has accepted public financing in the past but he has already raised money for a re-election bid. Seemingly anticipating the ending of public financing his latest campaign committee report shows he raised over $120,000 between July and the end of 2011. His committee now has over $226,000 cash on hand.

State Superintendent of Public Instruction June Atkinson, on the other hand, has raised virtually no money. Her campaign committee report shows only $650 cash on hand. Still Atkinson says she will run for re-election and has started soliciting contributions.

One option being considered is to evenly divide the existing public campaign cash among the candidates, then allow them to raise more contributions from private sources. However, the chairman of the House Elections Committee, Rep. David Lewis (R-Harnett), is one of the Republicans who would like to eliminate public financing for Council of State races, so this scenario appears highly unlikely.

The legislature could also choose to fix the Council of State shortfall with an appropriation. But with other pressing needs, publicly financed campaigns are not a priority for the Republican leaders in the General Assembly.

Meanwhile, candidates running for the Court of Appeals will be dealing with the end of so-called “rescue funds” in those races. Under the system, if a candidate for an appellate judicial seat chooses public financing, he or she receives an initial $164,400. Someone running for the Supreme Court is granted $240,100 to start a campaign. Up to now those candidates could also receive rescue funds, which are triggered when an opponent’s privately raised contributions exceed this initial public financing amount.

The State Board of Elections (SBOE), however, decided in December 2011 that rescue funds would no longer be available because of a U.S. Supreme Court ruling. In an Arizona case the high court ruled that rescue funds violated the free speech of candidates not receiving public dollars. (The board did not prohibit rescue dollars for Council of State races.)

Rescue funds were required in Court of Appeals races in 2008 and 2010. Republican Dan Barrett spent over $178,000 in a losing bid to unseat incumbent Judge Linda Stephens. Barrett was given over $18,000 in rescue funds. In 2010 Court of Appeals Judge Ann Marie Calabria needed nearly $5,000 in rescue dollars in her winning race with Jane Gray.

Unlike the Council of State public campaign fund, there is plenty of taxpayers’ and attorneys’ money in the judicial public campaign fund, which holds $7 million. Attorneys in North Carolina are required to pay a $50 surcharge as part of public financing for appellate court races. The lawyers can allocate their contributions toward publishing a Voter Guide. If they don’t, the money goes into the judicial campaign fund. In 2011 attorneys’ surcharges totaled $1.5 million. Just under $400,000 went to the Voter Guide fund.

With the new SBOE decision in place, judicial candidates – after receiving the initial tax dollars - will no longer be able to match opponents through the use of rescue funds. Furthermore, because candidates opting for public funds are barred from fundraising, they won’t have any means to raise more money to match their opponents’ spending.

Another concern of some is that these public campaign funding glitches may give one party an edge. Paul Shumaker has run successful appellate court races for Republicans and is not a fan of public financing. He says the lack of public funds may not be as difficult for Democratic candidates. “Funding for Republican judicial campaigns has never been there regardless of their stature on the bench,” says Shumaker.

And funding will be more crucial than ever. For example, Supreme Court Justice Paul Newby is up for re-election. Court of Appeals Judge Sam Ervin, Jr., a Democrat, says he will run for that seat on the bench. Shumaker says he’s concerned Ervin may run a $500,000 campaign.

For now it appears judicial candidates will have to hope whatever they get from the public campaign fund will be enough, or instead roll up their sleeves and raise money directly from voluntary support.  It also appears those running for Council of State offices will no longer be able to rely on taxpayer funds to finance their campaign.

 

NOTE: A previous version of this article incorrectly listed the Council of State races eligible for public financing, and the state involved in the Supreme Court case on rescue funds. Civitas regrets the errors.

This article was posted in Elections & Voting by Matt Willoughby on February 7, 2012 at 4:33 PM.

© 2011 The Civitas Institute. Visit us on the web at www.nccivitas.org.
This article can be found at https://www.nccivitas.org/2012/public-financing-glitches-may-leave-candidates-in-the-lurch/

Comments on this article

  • 1

    Thomas Paine
    Thomas Paine Feb 07, 2012 at 18:54

    There is an error in this article. The only offices on the Council of State that are eligible by state law for public financing are State Auditor, Superintendent of Public Instruction, and Insurance Commissioner. Democratic legislators tried to add State Treasurer to the list of offices in 2009 or 2010, but it **never** passed. Therefore, it is incorrect to include all the info about Janet Cowell and State Treasurer; instead, Mr. Willoughby should have included Beth Wood and State Auditor.

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