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).