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Interested Persons Meeting to Discuss Possible Changes to the Campaign Finance Reform Ordinance Related to Public Financing Program

Wednesday, November 16, 2011
2 PM to 4 PM
Room 408 City Hall

and

Tuesday, December 6, 2011
4:30 PM to 6:30 PM
Room 421 City Hall

Ethics Commission staff will discuss and solicit comments about possible changes to the public financing program for candidates for the Board of Supervisors.  Depending on the outcome of our discussions, we may look at possible changes to the Mayoral program in the future, but these meetings will focus on Board of Supervisors races.  

Staff welcomes your suggestions and comments at either of the Interested Persons meetings about any or all of the discussion topics set forth below.  If you are unable to attend, please submit your comments to the Ethics Commission at 25 Van Ness Avenue, Suite 220, San Francisco, CA 94102, or by email to [email protected]    

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Discussion Topic A

Does the City’s public financing program effectively serve its goals?

  1. How do we measure whether public financing is successful? Is it successful if all of the candidates in a particular race are participating? What if most of the candidates are participating, but the eventual winner has not – is that failure, success or neither?
  2. Is the public financing program doing a good job in decreasing the amount of money spent on campaigns?  With campaign spending increasing in recent years, are there ways to decrease spending without sacrificing the other policy goals that the CFRO is designed to advance?
  3. Is the public financing program a good use of the City’s resources? The Ethics Commission has received feedback that the public financing program is too costly.  Should the program be preserved in light of its costs?  This chart shows the amount of public funds that have been disbursed in the last two Board of Supervisors election cycles.1

    Year Amount of public funds disbursed Number of candidates receiving public funds Average PF disbursed per candidate Highest PF amount received by a candidate Lowest PF amount received by a candidate
    2008 $1,315,470 19 $69,235 $123,445 $17,169
    2010 $1,477,713 22 $67,169 $140,572 $40,025
  4. What is the smallest amount of money that a candidate would need to be competitive in a supervisorial race and have a chance to win?  Does this vary by district?  Should publicly financed campaigns have different spending priorities than completely privately financed campaigns. Should publicly financed campaigns not use public funds for certain expenditures?

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Discussion Topic B

Should the City consider major structural changes to the public financing program?

The Commission has received feedback that the current program does not relieve candidates of the burden of fundraising for contributions or reduce the influence of money because public matching under the CFRO makes private contributions more valuable.  With matching funds, each dollar raised by a publicly-funded candidate is often worth two or five dollars to that candidate.  Should the City replace the partial (matching) public financing program with a full public financing program, where qualifying candidates receive a lump sum check and could not engage in further fundraising?  Would such a program be cost-prohibitive?  Could the program be structured to be no more expensive than the current program by (a) raising qualification thresholds and/or (b) setting a firm cap on the amount of funds available to publicly financed candidates?

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Discussion Topic C

Should the City keep the existing program and make more limited modifications? 

Some have suggested that the City should change the way it matches contributions in the partial public financing program for Board of Supervisors candidates, either by changing the matching ratios, by changing the initial spending cap (called the Individual Expenditure Ceiling or IEC), or by imposing a “hard spending cap” that cannot be adjusted in response to campaign spending. The current program and several and alternatives are set forth below:

Current Scheme (adjustable IEC initially set at $143,000)

  Private Public
Initial $5,000 $10,000
1:4 $10,000 $40,000
1:1 $39,000 $39,000
Total $54,000 $89,000
IEC $143,000
The Individual Expenditure Ceiling (IEC) may be adjusted based on total supportive funds and opposition spending, which allows candidates to raise private funds that are matched with public dollars. 

Supervisor Kim’s2 Pending Proposal (adjustable IEC initially set at $242,500)

  Private Public
Initial $7,500 $20,000
1:4 $15,000 $60,000
1:1 $70,000 $70,000
Total $92,500 $150,000
IEC $242,5003
The IEC may be adjusted based on total supportive funds and opposition spending, which allows candidates to raise private funds that are not matched with public dollars. 

Alternate Proposal 1 (capped IEC set at $250,000, new matching ratio)

  Private Public
Initial $5,000 $10,000
1:2 $10,000 $20,000
1:1 $70,000 $70,000
Total $85,000 $100,000
Non-matching4 $65,000 $0
IEC $250,000
Under this proposal, the IEC would be capped at $250,000. Publicly-financed candidates could not spend more than that amount under any circumstances. The formula for matching funds would be changed so that instead of a 1:4 match, it would be a 1:2 match for the first $10,000 raised after the initial $5,000.

Alternate Proposal 2 (capped IEC set at $300,000, new matching ratio)

  Private Public
Initial $5,000 $10,000
1:2 $10,000 $20,000
1:1 $70,000 $70,000
Total $85,000 $100,000
Non-matching $105,000 $0
IEC $300,000
Under this proposal, the IEC would be capped at $300,000.  The matching formula would be the same as
Alternate Proposal 1.

Alternate Proposal 3 (adjustable IEC)

  Private Public
Initial $5,000 $10,000
1:2 $10,000 $20,000
1:1 $70,000 $70,000
Total $85,000 $100,000
Non-matching $65,000 $0
IEC $250,000
This is similar to the Kim proposal, except that the initial amount of private funds raised to qualify is $5,000, the matching ratio is different and the amount of available public funds is less.

Alternate Proposal 4 (adjustable IEC)

  Private Public
Initial $10,000 $20,000
1:4 $10,000 $40,000
1:1 $40,000 $40,000
Total $60,000 $100,000
Non-matching $140,000 $0
IEC $300,000
This is similar to the Kim proposal, except that the initial amount of private funds raised to qualify is increased from $7,500 to $10,000, and the amount of available public funds is less.
  1. The Ethics Commission has received feedback that it is too easy to qualify for public financing, causing the City to provide thousands of dollars in public funds to candidates who represent only the smallest constituency and have no real chance of success in the election.  To qualify for public financing under current law, a Board of Supervisors candidate currently must raise $5,000 from 75 contributors before the 70th day before the election. 
    • Should the initial threshold be changed? 
    • If so, should it be $7,500, as Proposition O originally provided?  
    • Or should it be $10,000, or another amount? 
    • Should the law require that the qualifying contributions come from residents of the district, instead of residents of the City, as current law provides? 
    • Should a signature requirement be added so that a candidate must show that he or she has sufficient non-monetary support from his or her district to be a viable candidate?
  2. What is an appropriate spending cap?  Should the spending cap be fixed or adjustable?
  3. Is the current formula for matching funds appropriate?  Should the current amount of public funds be increased from $89,000 to $100,000?  To $150,000? 
  4. Candidates currently can begin receiving public funds nine months before Election Day and must return all public funds if they withdraw from the race before the election.  The Commission has received feedback that this system encourages candidates to remain in the race when they would otherwise drop out or throw their support behind another candidate.
    • Should the period for disbursement of public funds begin closer to the election?
    • If so, when should the period of disbursement of public funds begin?
    • Should the rule that a candidate who withdraws or fails to qualify for the ballot must repay the public funds he or she received be changed?

S:\C.F.R.O\2011\PF Program\IP meeting Nov&Dec 2011 discussion.docx


1 In 2002, $281,989 in public funds was disbursed; in 2004, $757,678 was disbursed; in 2006, $216,784 was disbursed.

2 Supervisor Kim’s legislation is co-sponsored by Supervisors Campos, Mirkarimi, Mar and Avalos.

3 The legislation actually provides for an Independent Expenditure Ceiling of $245,000.

4 This “non-matching” amount is the amount that a candidate may raise in order to reach the Individual Expenditure Ceiling in Alternate Proposals 1,2,3 and 4, respectively – this amount will not be matched by public funds.