Testimony of Amy Loprest, Executive Director of the New York City Campaign Finance Board, to the City Council Committee on Governmental Operations
Good afternoon, Chair Cabrera and members of the Committee on Governmental Operations. My name is Amy Loprest, and I am the Executive Director of the New York City Campaign Finance Board (CFB). With me is the Board Chair, Frederick Schaffer.
Thank you for the opportunity to provide testimony on Int. No. 732, sponsored by Council Member Ben Kallos, which would raise the cap on public funds available to candidates, incorporate the language of last year’s ballot question into the Campaign Finance Act, and make changes to conform to the June primary date, including making public funds payments available to candidates as early as the December prior to an election year.
The CFB is supportive of the goals of this legislation, which are to encourage small dollar fundraising and reduce the risk of corruption associated with large contributions to candidates for city office.
After reviewing the administration and impact of the Program during the 2017, we reported that the Program has worked differently for citywide candidates than it has for City Council candidates. In prior elections, candidates for mayor have been considerably more reliant on large contributors than candidates for Council seats. To address this disparity, we made a series of recommendations aimed at reducing the amount of large private contributions in city elections by lowering the contribution limit, increasing the incentives for small-dollar fundraising by increasing the matching formula, and enabling candidates to rely more heavily on public matching funds by increasing the public funds cap.
As you know, the 2018 Charter Revision Commission looked at these issues closely. After their deliberations, the proposal that last year’s Commission put before voters increased the matching formula to $8-to-$1 and boosted the amount of public funds available to candidates, from 55 percent of the spending limit to 75 percent. Additionally, the proposal made funds available starting in February of the election year to candidates who could demonstrate that they faced a serious opponent. Voters went on to overwhelmingly support the measure, with over 80 percent voting yes. New Yorkers made it clear they want publicly financed elections to continue playing a role in their democracy.
Under the new system, we’re already seeing changes in fundraising at the citywide level. Local Law 1 of 2019, also sponsored by Council Member Kallos, put the parameters approved by the voters into effect for February’s special election for public advocate. Early data from that special election shows that this new iteration of the Program is working as intended. The most frequent contribution size across all candidates was just $10, compared to $100 in previous citywide races.
A strong public matching funds program for city elections helps New Yorkers elect a government that is more inclusive, representative, and responsive.
The CFB looks forward to working with the Council to ensure that the public matching funds program continues to play a significant role in our elections While the CFB shares the broad goals of Int. No. 732, we have some practical concerns with the bill as drafted, and we would like to highlight some potential risks that we hope to work with the Council to mitigate.
The CFB originally proposed making “early” payments to candidates before the final ballot determinations in our 2013 Post-Election Report. Making payments earlier and more frequently in the election cycle mitigates the stress of waiting until just five weeks before the election to receive a first payment of public funds. An earlier payment schedule also gives candidates more time to address any compliance issues that could prevent them from receiving public funds.
That said, the risk associated with paying candidates who do not face serious opposition or who do not end up running serious campaigns increases when payments are available so early in the election cycle. The Board takes this risk seriously, as an increase in the amount of such payments could undermine public support for the Program. Local Law 168 of 2016, also sponsored by Council Member Kallos, addressed this risk by setting a cap on payments made before the final determinations on the ballot.
The 2018 Charter Revision Commission sought to address this increased risk by prohibiting any early payments to candidates who could not submit a valid Certified Statement of Need to demonstrate that they were opposed by a candidate who met one of the criteria laid out in §3-705 of the Campaign Finance Act (submission of a valid Certified Statement of Need capped any payment to 25% of the maximum amount). However, Int. No. 732 removes this prohibition, which we believe the bill should find a way to address.
To protect taxpayer dollars from misuse, the Act sets clear standards for how campaigns may spend their public matching funds. Another serious risk is that candidates who rely heavily on public funds and may be unable to show that their funds were used for “qualified” expenditures will have to return their funds once the election is over.
We raised these concerns in April 2017, when this committee heard an earlier version of this legislation. As you know, to be able to use public funds for an expenditure, the campaign must show that the expenditure was in furtherance of the campaign, made in the year of the election, reported in a timely fashion to the CFB, and fully documented. Increasing the amount of available public funds will also limit candidates’ ability to spend campaign funds on non-qualified expenditures, including cash expenditures, payments to family members, spending related to holding office and post-election spending.
For 30 years, the Program has helped keep big money out of politics and provided public matching funds that engage and empower more New Yorkers to make their voice heard in city elections. The Program remains strong because of our work with the Council over the years to ensure that it evolves to meet the challenges of an evolving political landscape. We look forward to working with the Council to address the issues we’ve raised today.
Thank you for the opportunity to provide testimony on this legislation. I’m happy to answer any questions you may have.