Time To Tinker With Clean-Elections Law?

As a new mayoral election cycle kicks into gear, New Haven’s pioneering public-financing program, the New Haven Democracy Fund (NHDF), is taking a look in the mirror.

Should it continue with its ​“hybrid” system of offering qualifying candidates a mix of a one-time grant and 2 – 1 match on individual contributions in return for limits on the amounts and kinds of donations they accept?

Or should New Haven follow the lead of cities like New York, which has no initial grant but offers a 6 – 1 match?

The Democracy Fund decided to undergo this reassessment at its online monthly board meeting Wednesday evening. Members concluded that it is a good idea to reevaluate how the program is working after its first 14 years.

New Haven launched Connecticut’s first municipal clean-money/public-financing system in 2007. It applies only to mayoral races. The goal, as stated in the ordinance, is to ensure that all the citizens of New Haven have a fair and meaningful opportunity to participate in the election of their mayor. The goal also is to combat the perception of corruption in the election of mayor, and shift the time spent fundraising towards time spent engaging with the citizenry. It’s a voluntary program: Participants agree to limit individual contributions to $390 (rather than $1,000) and to forswear donations from political action committees.

Two candidates expected to run in a Democratic mayoral primary this year, incumbent Justin Elicker and (currently ​“exploratory”) challenger Karen DuBois-Walton, have pledged to participate in the system.

At Wednesday night’s meeting, board member and longtime public financing advocate Aaron Goode raised and explored the question of whether New Haven’s public-financing system should maintain the status quo or become more like New York’s or, say, Seattle’s, where citizens got ​“democracy” vouchers to donate to local candidates. Is the current hybrid system just right for a city our size? Or would more citizens participate, with more potential impact, under a revised system?

The discussion will also take place as the Fund prepares to update alders, who hold the ultimate purse-strings and rule-making authority, on the program.

At Wednesday evening’s meeting, the board’s newest member, attorney James Bhandary-Alexander, agreed to chair a subcommittee to review the NHDF’s ordinance. Goode volunteered to chair a subcommittee to review the larger question of the Fund’s financial structure as it moves into its 14th year.

Meanwhile, Goode and Fund Administrator Alyson Heimer explored the question in more depth in email exchanges after the meeting. Following is what they wrote:

Aaron Goode: Democracy Dollars, Anyone?

I don’t want to be critical of the existing program — the Democracy Fund as written is a strong program that has performed well over the last 10 – 15 years in achieving its mission of greater transparency, empowering small donors and limiting the role of special interests.

However we should always be looking around at different models to see what we might do better. A lot of places with public financing do it differently from New Haven, and we should ask why.

Ultimately the architecture of the Democracy Fund is a decision for the city’s elected leaders, but from my perspective, what a really good public financing program should strive for is the maximum democratization of campaign funding — to achieve as broad a base as possible of small donors, so that the people funding campaigns are as diverse as the overall population, or let’s say the overall electorate.

Programs like the one in New York City, where you have a 6‑to‑1 match (ours is only 2‑to‑1, and only applies to the first $30), sufficiently enhance the value of small contributions that they tend to bring out more donors of modest means, while accentuating the voice and impact of those small donors. San Francisco has also just moved to a 6x matching system after previously having a 2x match like New Haven.

The new public financing program in Seattle is also an interesting model: their program gives every registered voter four $25 ​“democracy vouchers” that can be used to donate to any candidate, or candidates, of the voter’s choosing. This makes everyone, even the poorest resident, a potential campaign donor with a meaningful financial impact. Every single resident can now afford to attend a fancy $100-a-plate fundraiser where they get to drink wine and shmooze with the candidate.

Or to think of it another way, a candidate could run a viable campaign on issues just appealing to the poor, without ever having to worry that a lack of wealthy supporters will leave the campaign under-resourced.

Democracy vouchers or ​“democracy dollars” is an idea that actually originated with some Yale Law School professors (e.g. Bruce Ackerman) a couple decades ago.

Are high-multiple matching funds or democracy vouchers better systems than the one we use in New Haven, which is a somewhat complicated, arguably unwieldy hybrid of matching funds and grants? Possibly! At least it’s a discussion we should be having.

Obviously New York and Seattle are larger, wealthier cities that are in a better position to afford more generous or expansive public financing programs than New Haven.

On the other hand, corruption and misgovernment are very expensive problems in the long term, so perhaps we cannot afford NOT to invest more in our program, despite our budgetary constraints.

I should add that the state of Connecticut has its own public financing program with a completely different architecture from New Haven’s … the state program is 100% grant-based, no matching funds at all. But I am really interested in looking at what works and doesn’t work with programs operating on the municipal level.

Creating an effective public financing program is about finding the right mix of grants and matching funds (which could mean turning the dial up on one, down on the other, with no overall change in spending); making sure that barriers to entry for participating candidates are low enough to not exclude qualified candidates but high enough that we are not giving out funds to candidates who are not really viable or credible; and making sure that we have requirements for participating candidates (such as the requirement to participate in a debate, or file in eCris) that are strict and well-enforced, but not so demanding or onerous that they discourage candidates from participating.

All of these elements are about striking a balance that is delicate and difficult to achieve — and why we should look at as many different models as possible to seek out best practices.

Alyson Heimer:

The Board routinely hears news of similar programs across the country, and from time to time there have been passionate discussions about the merits of a hybrid program (grant and matching funds) versus a matching- or grant-only design. The Board has considered changes to the fund in myriad ways over the years, including controversial topics like expanding the program to other city-wide races (Town Clerk, Registrars of Voters, Board of Education). There have also been discussions about program benefit amounts and if they are in line with the real costs of a political campaign.

The Democracy Fund is here to promote participation from the citizens of New Haven in the election of their Mayor. We place restrictions on where a candidate can go for money: no special interest groups, business entities, or super donors. We reward small-dollar contributions and limit high-dollar donations to promote the diversity of conversation during a campaign.

None of these rules are meant to hinder a candidate in seeking office. I see my role as one of making this program easy to use for anyone considering running for Mayor. If a change to the program design makes it more appealing for participants, that should be explored.

Based on what I know of other programs around the country, there are more matching fund programs than grant programs at the municipal level. The Fund limits campaign expenditures to $390,000. It may be financially unreasonable for the Fund to provide only a lump sum grant of that amount.

The discussion about matching fund-only program costs would likely revolve around the correct ratio of match if they were to do away with the grant. New York City’s match is 6‑to‑1, for example; New Haven’s match is currently 2‑to‑1. Changing that detail will inevitably call into question the matching amount cap — currently set at $30.

Should the fund dissolve the grant, that cap may need to increase. A combination of one-time capital infusion and steady matching funds for the duration of a campaign is a balanced solution at a reasonable cost. (But I’m kind of a campaign finance nerd: I want to run the numbers to know for certain that we have the ideal compromise.)

This original hybrid design was constructed in 2007. It has been almost 15 years, and routine examination of program efficacy and efficiency is a good best practice. These kinds of conversations are important to have as a citizen-led oversight board and as a community. They ensure that the fund is providing a program that meets the needs of those who want to use the public campaign finance option, while also reserving money in the fund to assist the most participants possible.

Furthermore, I would argue that it is a Board Member’s duty to consider the long-term financial stability of the Democracy Fund, which has only received replenishment twice (2013, 2019).

We may already have the perfect design in our hybrid model — and if the data show that to be true, I think New Haven can be very proud of creating the Fund’s unique design so many years ago. (We could all say, ​“You know, New Haven had hybrid public campaign financing — before it was cool.”)