Tuesday, December 6, 2011
4:30 PM to 6:30 PM
Room 421 City Hall
This is the second Interested Persons meeting scheduled by Ethics Commission staff to discuss and solicit comments about possible changes to the public financing program for candidates for the Board of Supervisors and the Mayor. Based on the insightful and helpful comments received at the November 16, 2011 Interested Persons meeting, staff plans to recommend several modifications for the Commission’s consideration when it meets on December 12, 2011 at 5:30 PM in Room 408 City Hall. These possible changes are set forth below.
Staff welcomes your suggestions and comments at the upcoming Interested Persons meeting about any or all of the proposed changes set forth below. The list of changes is not an exhaustive one – staff welcomes your input. 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 ethics.commission@sfgov.org.
*****
Many of the comments received at the first Interested Persons meeting were based on the experience of the November 2011 mayoral election, where nine candidates for Mayor received (as of 11/17/11) $4,607,726; and where five of those candidates, whose public funds totaled $2,365,722, each received less than five percent of the first-choice votes cast.
- There was general agreement that candidates must do more to show viability before receiving public funds.
- There was sentiment that the disbursement of public funds should begin at a later date and that the matching formula should be changed.
- There was discussion that the last date for filing nomination papers (now the 88th day before the election) could be moved up to earlier in the campaign season so that there is more stability and predictability in an election before the City disburses significant amounts of public funding to candidates. Staff recommends that the City Attorney look into whether this can be accomplished by amending the Municipal Elections Code or the Charter.
- With respect to whether there should be an adjustable or hard expenditure ceiling, there was expression that an adjustable expenditure ceiling has the practical effect of creating no ceiling at all; hence, a hard cap may be appropriate.
Proposals and Questions
For Board of Supervisors:
Candidates must show that they have sufficient support in the district in order to be eligible to receive public funds. There was concern that eligibility thresholds were too low and the 4-1 match meant too much funds were released to candidates who really didn’t have widespread support.
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. |
|
1. Ethics Staff's Proposals and Questions Regarding Qualification Criteria
- Raise qualifying threshold from $5,000 to $10,000—thus, candidates must raise $10,000 in contributions from City residents ranging from $10 to $500 (of which only up to $100 of the contribution will be counted as a qualifying contribution). Currently, a candidate must have raised at least $5,000 in qualifying contributions from at least 75 contributors before the 70th day of the election. Under the proposed scheme, should the number of contributors be 100? Or more?
- Add a requirement that some of this qualifying threshold must be raised from within the district to demonstrate that the candidate has support within the district. But contributors in some districts are much more likely to make campaign contributions than in other districts. Should this new requirement mean that at least one-quarter or one-half of the $10,000 be raised in the district? Or should it mean that at least 25 or 50 contributors must come from the district?
- Add a requirement that candidates must obtain signatures from at least 200 residents in the district to show that they have support within the district for their receipt of public funds for their candidacy.
2. Ethics Staff's Proposals and Questions Regarding Matching Funds
- Replace the 1:4 matching formula with a 1:2 matching formula.
- Raise the maximum amount of public funds available from the current $89,000 to $100,000, $125,000 or $150,000. In the discussion at the first Interested Persons meeting regarding what the public funds maximum should be, there was disagreement whether it should be $100,000, $125,000 or $150,000. While some persons said that $100,000 was an appropriate amount, another said that $100,000 is only $11,000 more than the current $89,000 amount and would not be sufficient to meet the challenges of third party or non-publicly financed candidate spending. One person advocated for $150,000 so that a candidate may be able to mount a sufficient defense against opposition spending. Staff recommends $150,000 for this same reason. In the November 2010 election, three candidates (all from District 8) received more than $100,000 in public funds ($104,764, $121,406, and $140,572), and one candidate in District 6 received more than the initial $89,000 amount ($90,817). In the November 2008 election, two candidates received more than $100,000 in public funds ($123,445 in D3 and $105,033 in D11), and one candidate in District 11 received more than the initial $89,000 amount ($92,058). Based on these figures, staff recommends that the amount of available public funds be set at $150,000; but staff also believes that the $150,000 public funds amount will not be reached by most candidates. Nonetheless, having this amount available at the outset would tend to encourage rather than discourage participation in the program.
- Adopt a hard spending cap of $300,000 or $250,000. In 2008, average spending by winning candidates was $198,239. In 2008, in races where there was no incumbent, the winner spent $181,847 (D1), $329,499 (D3), $136,611 (D9), and $173,625 (D11), or an average of $205,396. In 2010, the average spent by winning candidates was $213,447; in races where there was no incumbent, the winner spent $260,467 (D2), $249,969 (D6), $246,666 (D8), and $172,117 (D10), or an average of $232,305. Based on these figures, and factoring in an anticipated increase in third party spending in upcoming elections, staff recommends that the expenditure ceiling be set at $300,000. Not every candidate will reach this level of spending, which staff believes is sufficiently high to enable non-incumbents to mount a successful candidacy. Staff recommends dispensing with an adjustable individual expenditure ceiling, which, in effect, means that there is no spending limit.
- Do not disburse any public funds until the second Tuesday of June of the election year. This four-month delay (from nine months before the election, or February, currently) in releasing public funds would address comments raised that public funds are too easily accessible too soon, even before it’s clear that the candidate is a viable candidate. A June start date would provide some time for candidates to organize their campaigns and assess their opposition, and yet it would still be timely enough for candidates to utilize public funds to mount an effective campaign.
- Adopt a 1:2 matching ratio to certified candidates after the initial disbursement of funds. This change would address concerns that public funds are disbursed too easily and too soon under the current system. A 1:2 match also enables certified candidates to mount effective campaigns without having to focus too heavily on fundraising.
The following charts set forth several proposals that vary based on the amount of public funds available ($150,000, $125,000 or $100,000) and the expenditure ceiling ($300,000 or $250,000). All of them adopt a hard expenditure cap that may not be adjusted, and all of them follow a matching formula of an initial 1:2 match, a subsequent 1:2 match and a 1:1 match.
Proposal A for BoS (Staff’s Recommendation)
| $150,000 public funds available; Expenditure Ceiling ("EC") = $300,000 | Private | Public |
|---|---|---|
| Initial | $10,000 | $20,000 |
| 1:2 | $40,000 | $80,000 |
| 1:1 | $70,000 | $70,000 |
| Total | $120,000 | $150,000 |
| Non-matching | $30,000 | $0 |
| Expenditure Ceiling | $300,000 | |
Proposal B for BoS
| $125,000 public funds available; EC = $300,000 | Private | Public |
|---|---|---|
| Initial | $10,000 | $20,000 |
| 1:2 | $40,000 | $80,000 |
| 1:1 | $25,000 | $50,000 |
| Total | $75,000 | $125,000 |
| Non-matching | $100,000 | $0 |
| Expenditure Ceiling | $300,000 | |
Proposal C for BoS
| $100,000 public funds available; EC = $300,000 | Private | Public |
|---|---|---|
| Initial | $10,000 | $20,000 |
| 1:2 | $30,000 | $60,000 |
| 1:1 | $20,000 | $20,000 |
| Total | $60,000 | $100,000 |
| Non-matching | $140,000 | $0 |
| Expenditure Ceiling | $300,000 | |
Proposal D for BoS
| $150,000 public funds available; EC = $250,000 | Private | Public |
|---|---|---|
| Initial | $10,000 | $20,000 |
| 1:2 | $40,000 | $80,000 |
| 1:1 | $50,000 | $50,000 |
| Total | $100,000 | $150,000 |
| Non-matching | $0 | $0 |
| Expenditure Ceiling | $250,000 | |
Proposal E for BoS
| $125,000 public funds available; EC = $250,000 | Private | Public |
|---|---|---|
| Initial | $10,000 | $20,000 |
| 1:2 | $40,000 | $80,000 |
| 1:1 | $25,000 | $25,000 |
| Total | $75,000 | $125,000 |
| Non-matching | $50,000 | $0 |
| Expenditure Ceiling | $250,000 | |
Proposal F for BoS
| $100,000 public funds available; EC = $250,000 | Private | Public |
|---|---|---|
| Initial | $10,000 | $20,000 |
| 1:2 | $30,000 | $60,000 |
| 1:1 | $20,000 | $20,000 |
| Total | $60,000 | $100,000 |
| Non-matching | $90,000 | $0 |
| Expenditure Ceiling | $250,000 | |
For Mayor:
Current Scheme (adjustable IEC initially set at $1,475,000)
| Private | Public | |
|---|---|---|
| Initial | $25,000 | $50,000 |
| 1:4 | $100,000 | $400,000 |
| 1:1 | $450,000 | $450,000 |
| Total | $575,000 | $900,000 |
| IEC | $1,475,000 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. |
|
The November 16, 2011 Interested Persons meeting did not address the Mayoral public financing program. However, staff believes that the proposed general rules governing the Supervisorial program could apply similarly to the Mayoral program. Thus, staff might consider the following proposal:
| $900,000 public funds available; EC = $,750,000 | Private | Public |
|---|---|---|
| Initial | $50,000 | $100,000 |
| 1:2 | $200,000 | $400,000 |
| 1:1 | $400,000 | $400,000 |
| Total | $650,000 | $900,000 |
| Non-matching | $200,000 | $0 |
| Expenditure Ceiling | $1,750,000 | |
In the November 2003 election, the Newsom 2003 Mayoral Committee spent $5,151,623; in 2007, the Newsom Mayoral Committee spent approximately $1.6 million. Based on reports filed at the Ethics Commission during the November 2011 election, the five highest spending candidates spent $6,688,984, or an average of $1,337,797; the winner spent $1,722,714. Third party spending to support candidates totaled $2,109,460; third party spending to oppose candidates totaled $443,078. Based on this data, staff recommends that the expenditure ceiling be increased to $1,750,000.
In the 2011 election, no publicly financed candidate was able to achieve the maximum $900,000 in public funds. For this reason, staff proposes to keep the public funds level at $900,000.
A member of the public has proposed the following scheme:
| Private | Public | |
|---|---|---|
| Initial | $50,000 | $100,000 |
| 1:2 | $425,000 | $850,000 |
| 1:1 | $275,000 | $275,000 |
| Total | $750,000 | $1,225,000 |
| Non-matching | $0 | $0 |
| Expenditure Ceiling | $1,975,000 | |
Other questions re Mayoral program:
- Under current law, a candidate must receive at least $25,000 from at least 250 contributors in order to qualify for public funds from the Mayoral program. Should the City change the qualification threshold to $50,000 from at least 500 contributors, or some other threshold?
- If a signature requirement is adopted as an eligibility criterion for the Mayoral public financing program, should the number of signatures demonstrating support for the candidate’s receipt of public funds be set at 2,000? How many signatures are sufficient to show widespread support?
- Is $900,000 in public funds an appropriate amount? In 2011, no candidate for Mayor reached this figure.
- Should the spending cap be $1,750,000? Or higher? Or lower?
Withdrawal of publicly funded candidates for Supervisor or Mayor:
Under current law, any candidate who receives public financing but who withdraws or fails to qualify to have his or her name printed on the ballot in the election for which the public funds were provided must repay the Election Campaign Fund the full sum received from the Fund. Are the proposed changes – particularly, delaying the disbursement of public funds and changing the formula for matching funds – sufficient to address concerns that public funds were too readily available to candidates during the last election? If not, what other changes might be proposed?
S:\C.F.R.O\2011\PF Program\IP meeting Dec 2011 discussion 11.29.docx