Contribution Limits – Comments on Oregon 2019 SJR18

To: Senate Committee on Campaign Finance, Oregon Legislative Assembly

Re: SJR18 Constitutional Amendment to Allow Laws Limiting or Prohibiting Contributions Made to Candidates

As introduced, SJR18 is narrowly crafted to grant the authority to “enact laws limiting or prohibiting contributions received by or made to candidates, or the principal campaign committees of candidates, for nomination or election to public office.” It doesn’t intrude into any areas that might be questionable under the federal constitution.

However, it’s very similar to the failed 2006 Measure 46 that voters’ feared might encroach on free speech rights. Adoption by voters may not be successful.

Further, this approach doesn’t create a settlement of the contested policy of candidate contribution limits. Instead, it opens up a new area of conflict. Incumbent legislators may combine to disadvantage challengers or a future legislative majority may seek to regulate contribution limits to its advantage.

The “-2” amendment takes a better approach by placing a specific contribution limit in the constitution. This would reduce the fears in the public that the contribution limits would be set too low, infringing on free speech rights. It also wouldn’t open up another area of conflict.

I would suggest some refinements:

1) The U.S. Supreme Court has allowed the prohibition of contributions to candidates by corporations and unions. These contributions are the highest risk for corruption. They should be banned in the Oregon Constitution. Contributions from foreign nationals should be barred as well. Foreign donations aren’t common, only a few are recorded in OreStar.

2) Limiting per election is the same as at the federal level. However, it would require a change in campaign accounting to implement in Oregon. Using the annual aggregate contributions per donor that are already recorded in OreStar would be simpler and cheaper to implement.

3) The $5,000 limit is in the right range. It’s low enough to curb the enormous contributions seen recently in Oregon and it’s high enough to not interfere with candidates’ ability to run an effective campaign.

4) Indexing based on the Consumer Price Index creates a perverse incentive for elected officials to make decisions that increase the cost of living. Indexing on the Median Earnings for Workers in Oregon published annually by the U.S. Census Bureau would create a virtuous circle encouraging greater shared prosperity.

The current median earnings in Oregon is $30,442. The contribution limit could be set at one-fifth of the median earnings rounded down to the nearest $100 dollars resulting in a current aggregate annual limit of $6,000. Other fractions could also work.

The “-3” amendment expands the measure’s scope to:

  • “regulating the use of moneys in political campaigns”
  • “disclosure of contributions or expenditures”
  • “identify[ing] the persons or entities who paid for the advertisement”
  • “use of moneys in political campaigns permitted under federal law and the Constitution of the United States”

This approach exacerbates the problems with acceptance by voters and opening up conflict. The disclosure provisions also don’t fit within the “Relating To” heading.

Expanding disclosure is potentially beneficial, but should be addressed in a separate measure to reduce the risk that the more important contribution limits would be defeated based on voter objections to the other provisions in the “-3” amendment.

Oregon Campaign Contribution Limits

Limits on campaign contributions to candidates in Oregon could prevent corruption and the appearance of corruption, reduce the fundraising burden on candidates, curb the influence of wealthy interests, and boost public trust in elected officials.

However, limits set too high would be ineffective. And, low limits could make running an effective campaign difficult, unfairly benefit incumbents and self-financed candidates, as well as shift campaign funds to independent expenditures and ballot measures.

Introduced during the 2019 Session, SJR13SJR18, and HJR13 propose amendments to the Oregon Constitution that would allow enactment of laws limiting contributions to candidates. They differ in details, but none specify particular limits.

This open ended grant of authority to limit contributions is substantially similar to 2006 Measure 46 that failed 40%-to-60% and may face comparable criticisms. In the voters’ pamphlet, arguments in opposition focused on the curtailment of free speech protections, uniting interest groups from the left and the right. The introduced measures are all vulnerable to free speech concerns. SJR13, in particular, would attract this line of attack by amending Article I.

According to the National Conference of State Legislatures, ColoradoMissouri, and Nevada have specific limits on contributions to candidates in their constitutions.

Definite constitutional limits may be more politically feasible in Oregon because they would balance the interests of elected officials and voters. Elected officials won’t have to fear initiative legislation altering the limits and voters won’t have to be concerned that the Legislative Assembly would change the limits against their interests. All changes would have to go through the arduous process of a constitutional amendment.

Small Donor Public Financing – Oregon Testimony

To: Senate Committee on Campaign Finance, Oregon Legislative Assembly

Re: Small Donor Public Financing Testimony

Public funding of campaigns can reduce candidates’ dependence on wealthy interests. However, small donor public financing–such as 2018 HB4076–raises some concerns: 

  1. Organized Groups: Bundling would tilt the political playing field away from ordinary voters toward organized groups that have the resources to deliver many qualifying small donations to candidates. Unlike the political contribution credit, there’s no overall limit on the matched amounts an individual can give to multiple candidates.
  2. Eligibility Criteria: 400 small donors for senators and 250 for representatives are tiny proportions compared to about 90,000 and 45,000 registered voters per senate and house district. Currently, the political contribution tax credit is more representative because it’s used by nearly 150,000 taxpayers, but even that is only a small percentage of the 2.7 million registered voters.
  3. Allocation Formula: Equal funding of candidates could foster polarization by subsidizing oversized platforms for extreme voices. Providing the same funding to incumbents and challengers disregards voter support and undermines the feasibility of legislative adoption.
  4. Waste: Furnishing uniform funding to candidates risks wasting tax dollars because some people will run for office simply to get state campaign money.

A simpler and more feasible approach to expanding public financing of campaigns would be to update the political contribution credit. It hasn’t been adjusted for inflation since 1987. Over the last 32 years, the credit has lost more than half of its value due to inflation. It should be adjusted for inflation and indexed.

The political contribution credit should also be made refundable to better fulfill its policy purpose “to encourage large numbers of people to contribute small amounts of money to political parties and candidates thereby encouraging participation in the political process” (LRO Tax Credit Review: 2019 Session, page 29).

Proportional Party Funding

“The morality of a [political] party must grow out of the conscience and the participation of the voters.”

– Eleanor Roosevelt, Autobiography

Public funding of political parties in proportion to voter support is a common method around the world to foster political equality, increase voter turnout, build responsive party organizations, and reduce the influence of private money in politics.

For more information on political finance worldwide see:

International Institute for Democracy and Electoral Assistance. Stockholm, Sweden.

Which political parties should be eligible to receive public funding in Oregon?

  • Most countries use some sort of threshold such as share of votes won, parliamentary representation, or number of candidates presented. However, all thresholds encourage new niche parties to form for the money, risk party system fragmentation, and waste public money.
  • Limiting funding only to the two mainstream political parties would give them an unfair advantage and may be unconstitutional.
  • Preference: fund the top-three vote-receiving political parties to encourage diversity without fostering party system fragmentation and waste.

How should votes be counted to allocate funds to parties in Oregon?

  • Other countries allocate funds equally to all eligible parties, by votes or seats won, by number of candidates fielded, or by share of expenses reimbursed.
  • Allocating funds by votes won balances the need to reward higher performing parties with ensuring a diversity of perspectives and encourages parties to mobilize voters.
  • Paying in proportion to a high-level candidate such as gubernatorial or presidential candidates would encourage spoilers.
  • Paying only for ballots returned by party members would encourage voters’ to choose a party and be fairly stable across elections, but would exclude non-affiliated voters.
  • Adding a separate line on ballots for voters to choose a party to receive their share of funds would include non-affiliated voters, but could be volatile across elections.
  • Preference: a hybrid system of paying for party membership and adding a separate line on ballots for non-affiliated voters.

Where should revenue come from for proportional party funding in Oregon?

  • Preference: Any general fund appropriation would probably be considered constitutional.

How much should parties receive per voter in Oregon?

  • A few dollars per vote should be sufficient to encourage statewide get-out-the-vote efforts by political parties and result in consistently higher turnout.
  • Preference: a fixed percentage of the median earnings for workers. The 2017 median earnings for workers in Oregon was $30,442. One ten-thousandth would be $3.04 per voter times about 2,000,000 voters equals around $6 million. This would also create a positive incentive by tying the revenue of the political parties to the shared prosperity of Oregonians.

Who should receive the funds?

  • Sending all the funds to the state parties would over-centralize the parties. This has been a problem in other countries.
  • Preference: pay half of the funds to the state parties and half to the county parties. If no organized county party exists, then the funds would be withheld to encourage formation of parties in all counties.

Which elections should party funds be distributed for in Oregon?

  • Funds could be appropriated for any election. When the Legislative Assembly refers a ballot measure to a special election, funding could be included to ensure adequate turnout.
  • Preference: regular biennial primary and general elections. The ratio for primary versus general and midterm versus presidential elections could be adjusted after some experience to boost turnout in elections with lower participation.

When should party funds be distributed in Oregon?

  • Lump-sum payments could be wasted. Public funds would be most efficiently and effectively spent for on-going staff and office space to build party organizations.
  • Preference: quarterly payments spanning the four-year period after each election. This would stabilize party revenue through election cycles. The funds per voter would be divided into sixteen payments until the next election of the same type. Each payment would include funds for the four previous elections. 

This legislative proposal is a work in progress. Your comments are welcome. Please submit your thoughts via my Contact page.

Political Contribution Credit – Oregon 2019 HB2134 Testimony

To: House Committee on Rules, Oregon Legislative Assembly

Re: HB2134 Extends sunset of income tax credit for political contributions.

The Oregon political contribution credit (PCC) should sunset and the funds distributed proportionally to political parties instead.

The PCC favors the wealthy:

  • The PCC is not refundable, so only filers with taxable income can use it, tilting the political playing field toward the interests of the upper-middle class.
  • Of the 149,160 Oregonians using the PCC in 2016, 75% of the revenue impact was received by tax filers with incomes of $52,400 and above (2019-2021 Oregon Tax Expenditure Report, pages 191-192).
  • Only a small proportion of Oregonians (7.3%) compared to the 2,051,448 voters who returned ballots in the 2016 General Election used the PCC (Oregon Secretary of State, Official Voter Registration and Turnout Statistics, November 8, 2016).

Proportional funding of political parties would level the playing field and check private money by:

  • Diluting the influence of all types of private campaign money, including independent expenditures, self-financed candidates, and donations to ballot measure campaigns that contribution limits can’t legally restrain under the U.S. Constitution.
  • Reducing the cost of all campaigns in Oregon and lowering campaigns’ dependence on contributions.
  • Boosting voter turnout statewide through get-out-the-vote mobilization efforts by political parties to increase their revenue. Consistently high turnout weakens the influence of private money on election outcomes.
  • Fostering greater responsiveness of political parties to voter concerns.
  • Providing a substantial source of funds to political parties that greatly diminishes party reliance on political contributions.
  • Not requiring a state constitutional amendment like contribution limits would.

My proportional party funding legislative proposal for Oregon is available at:

Small Donor Elections – Oregon 2018 HB4076 Testimony

To: House Committee on Rules, Oregon Legislative Assembly

Re: HB 4076 Establishes Small Donor Elections program to enable candidates for office of state Representative and state Senator to receive 6-to-1 match on small dollar donations.

I strongly support public funding of political campaigns. However, I have substantial misgivings about HB 4076 in its current form.

Reducing the influence of wealthy donors is a worthwhile goal that I favor, but matching private donations amplifies their power above that of voters. The 6-to-1 match just reduces the cost for private donors to influence elections–at taxpayers’ expense.

This bill would magnify the overrepresentation of insiders and incumbents. Finding the hundreds of donors needed to qualify would be easier for those who already have political connections. Incumbent gerrymandering in Oregon already protects low-quality legislators too much. Place of residence is a flawed gauge of competence and integrity.

Greatly reducing the match to unopposed candidates is prudent. But, there is no reduction for uncompetitive elections. Typically, 85% of winning legislative candidates get more than 55% of the vote, making the vast majority of contests uncompetitive due to incumbent gerrymandering. Uncompetitive elections are hollow rituals without effect.

Most advanced democracies publicly fund political parties in proportion to their vote share. Public funding is determined by popular support, not private donors. However, political parties are so unpopular in the United States that this approach is not politically feasible until major reforms are enacted that weaken party oligarchies and democratize political parties. The precinct committee person election process is flawed and dated.

Instead, a method is needed that is as similar to funding parties as possible, but is also politically viable. One proposition would be to distribute public funds to general election candidates based on the number of ballots returned by the party’s district voters in the primary election. A bounty per vote provides an extra incentive to increase primary election turnout, and democratize parties by expanding their registered voters.

HB 4076 strengthens the power of private donors and skews elections toward incumbents. It diverts attention from the larger crisis of the authoritarian incumbent gerrymandering of Oregon Legislative Assembly districts, which impairs the re-election motive for legislators to respond effectively to public concerns. Follow the money.

Small Donor Funded Elections – Oregon 2017 HB2578 Testimony

To: House Committee on Rules, Oregon Legislative Assembly

Re: HB2578 Establishes Small Donor Funded Elections program to enable candidates for state office to receive 6-to-1 match on small dollar donations.

Public funding of election campaigns is a good way to reduce the risk of policy capture by private interests. Unchecked, policy capture can erode good governance, equal opportunity, social cohesion, and trust in government. Public policy should not be for sale to the highest bidder.

Money in politics is necessary to allow campaigns to be heard and to foster competitive elections. However, private money can be used by powerful special interests to exert undue influence on the policy process. Even without bribery, private money can slant policy outcomes toward vested interests against the broader public interest. Creating a level playing field also increases the chances of electing persons of high competence and integrity to office.

Public campaign funding complements the ORESTAR disclosure system and government ethics regulations deterring undue influence and promoting transparency. It’s also compatible with the strong free speech provisions of both the Oregon Constitution and the United States Constitution by leveling-up funding instead of trying to level-down funding by restricting protected free speech.

After addressing any concerns raised in the public hearing or by legislators, please vote to recommend passage of HB2578.