NY's Campaign Finance Reform: An In-Depth Analysis

Dave Lombardo: Back in 2020, Democratic lawmakers and then-Governor Andrew Cuomo approved a program designed to amplify small campaign contributions using government funds. The intent was to level the playing field in statewide elections and races for the state legislature. However, before the system could take full effect next year, Democrats at the Capitol rushed through a bill earlier this month which could undermine the program if signed into law.

For more on the issue, we spoke recently with Blair Horner, Executive Director of the New York Public Interest Research Group.

Dave Lombardo: Welcome to the show, Blair.

Blair Horner: Thanks for having me.

Dave Lombardo: So from your perspective, what was the intent of the 2020 public campaign finance system created by state lawmakers and okayed by then-Governor Andrew Cuomo?

Blair Horner: The impetus was Governor Cuomo's response to the failure of the Moreland Act Commission that he pulled the plug on. One of the recommendations of that commission-- and by the way, it had been the recommendation of everybody who had looked at this system-- is to shift the campaign finances away from relying essentially on a very small number of big donors to a system that relies on a large number of small donors. The corruption risk goes down. You get more people engaged in the elections. So there was a commission that was created. They looked into the issue of campaign finance. They came up with the recommendations. Lawmakers passed it in 2020. The idea is similar to what New York City has had for 30 some-odd years. For small donations-- this is a way to encourage small donations-- there would be a public match, just depending on the size of the contribution. And that was a way to encourage lawmakers to seek out the average New Yorker who doesn't typically get asked to make a campaign contribution ever.

Dave Lombardo: Well then, with the bill that was approved by state lawmakers in the waning hours of the legislative session, how will that potentially undermine that program, especially as it pertains to accessibility, insurgent candidates, these first-time candidates, and their ability to actually access public dollars?

Blair Horner: You're right. The prime beneficiaries of the public financing system will really be challengers. Those are the people that have the hardest time raising money to run for office and part of what you want out of a system of public financing is some competition in elections. So, at the end of the session, which is always the 'whack-a-mole' season because bad things always pop up at the last minute, here was one of them. There had been no public hearings, no debate, nothing actually until the last few days of session where lawmakers, the leadership basically jammed through a law. Among its provisions were provisions that basically make it harder for challengers to get the number of donations they need to qualify for the system. It's set up that you need a certain number of donations within the district and if they're small enough donations and if they're matchable, then you're in the program. Lawmakers decided to raise the bar on that, to make it harder for challengers to comply.

Dave Lombardo: What about the argument maybe then that the original threshold in terms of the amount you need to raise and the number of donations you need to collect was too low and that we needed a higher barrier of participation to weed out candidates who might not be serious so that we're only having serious candidates utilizing public money?

Blair Horner: That's a great argument. It's too bad they didn't do it in the public hearing process where people could respond. Nobody really knew what was happening until the very end and in the Albany world, when deals come together at the last minute and cooked up in secret, they're usually not in the public's best interest. So in this case, had that arguments been made, had there been a legislative record, I mean, after all, it's been years since the law went into effect and not a peep out of the legislature or the governor. We think it was-- we think it was sort of a bad deal and it will turn out to be a worst deal for challenges.

Dave Lombardo: Another component of the legislation that moved in the final hours, the legislative session has to do with what you do with certain contributions that are above $250, this magic threshold for what contributions are matched, at least under the original version of the program, what's envisioned by Democratic lawmakers in the future now?

Blair Horner: Well, and it's approved by the governor and that at the moment is an if. We'll see what the governor chooses to do. Under the current system, the current public financing system, only contributions up to $250 can be matched. The smaller the contribution, the bigger the match. So a $50 donation gets you $12 for each one of those dollars. That's 600 bucks. It's a sliding scale that goes down as you go up.

Under the change that's been passed by both houses and by one vote, by the way, in the State Senate, 32 out of 63 Senators voted for the bill. Which is very unusual for Albany. Very unusual, particularly when the leadership is hammering together a deal. That the $250 match would apply to any donation. It doesn't matter the size. As long as it's legal, of course, that the first $250 would be matchable, and that means that big donors, people who might be making a $10,000 donation would get some of the contribution match and in a system where you're using precious, clean public resources to fund elections, all you're doing is draining away money from the incentive to go for small donors to helping reward fat cats in Albany.

Dave Lombardo: Well, there is the idea of a fat cat giving thousands of dollars to a candidate. But what's the difference, really, between someone who gives $300 and someone who gives $250? Is that threshold a meaningful one to begin with, this $250 benchmark?

Blair Horner: Well, they picked $250, I think, out of a hat. The system in New York City is $175, for example, and we had argued in the very beginning of that whole process in 2019 that use the New York City system as your model. It's road tested. It's been on the book for decades. It's evolved over time. Use that and they didn't. They decided to come up with something of their own.

So the $250 donation-- matchable contribution limit, they picked out of a hat. It could have been $175 if they followed New York City, but you're right. I mean, it could have been $300, too, but they chose to pick $250. In that process of developing that legislation, at least there were hearings and there was sort of a public process even if a lot of what was cooked up in the commission in 2019 to 2020 was done behind closed doors.

Dave Lombardo: Is it possible, though, that by changing the way we think about contributions above $250 and how we're going to administer this program, that this might make it easier to administer the program? Because we referenced the New York City public matching program and there are often a lot of headaches with that. Candidates get fined for minor violations in the program. So could this potentially make it easier to run something which is going to be brand new in terms of a statewide implementation?

Blair Horner: Well, it could make it easier for sure because then any contribution that comes through the door is matched.

Again, the downside is that you are using clean public resources to fund a candidate-- to help encourage big donations into the system. We already have plenty of big donations and that increases the corruption risk. We don't have to look far back into New York state history to see play-to-play schemes where big campaign contributors were rigging government contractors to their own advantage with compliant public officials, the Buffalo Billion comes to mind immediately. That will always continue to happen as long as somebody is not paying attention.

But you want to get on a system that relies on a large number of small donors and use the public resources to do that. Let's get average New Yorkers engaged in campaign finances. Not just wealthy ones.

Dave Lombardo: You mentioned small donors right there. My understanding, though, it's not just small donors. It's in-district donors.

Blair Horner: That's right.

Dave Lombardo: So when we think about people who might give thousands of dollars to a candidate, is it possible that those contributions won't be matched because they might not necessarily be from within the district, or does the legislation address that carve-out as well?

Blair Horner: I mean, you're right. The in-district match is a different part of the system than New York has, for example. That does make the system more complicated. The sliding scale nature of the match. The in-district, issues. Again, it does encourage candidates to talk to people within the district, try to raise money within the district from average people. I mean, when you look at the campaign contribution system in Albany, it really relies on donations, huge donations that come into the system and while the system is better because of the 2020 law, they lowered the contribution limits, it's still far higher than the national average and they're easily circumvented through the state party committee donations which are around $120,000.

Dave Lombardo: Do you think this legislation, if signed into law, will have a meaningful impact on the cost of actually administering this program? Do you anticipate it will cost millions more to actually dole out public matching dollars, or could the increase be trivial?

Blair Horner: Well, it's hard to know until we see what happens, but there will be-- the changes could make it-- it certainly will cost more, right? Because every donation now will be matchable, at least to some extent, but as you mentioned before, it does narrow the scope of who can donate because you have to be donating-- you have to be a contributor from within the district in order to get the match, and so that, I think, narrows the scope of the financial damage, but there is sort of a public damage in the sense that, you know, big institutions, wealthy individuals are getting matched with public tax dollars. That doesn't seem right.

Dave Lombardo:  If the alternative to this latest incarnation of the public matching program would be nothing, do you like this version of the program better than the way Albany worked prior to the 2020 law going into effect? Because I should make it clear that that's possibly what was at stake here. That this represents a compromise between Democrats in the legislature, who wanted to kill this, and proponents of it who work in the system and found a way to make it palatable to the leadership who might have wanted it dead.

Blair Horner: We did hear the rumblings on that during the budget, where there was a proposal to sort of-- at least we heard there was a proposal. Again, everything in Albany is done behind the curtains, so we don't really know what's going on. But in terms of-- there was at least some discussion of trying to extend the deadline from 2024 when the law goes into effect for the first elections to 2026. Yeah. I mean, the short answer is yes. If the choices are the lousy system that we have in place now with a less than better-- less better version of the law that's currently on the books, I'll take that. But that's not what we're faced with. Governor Hochul is going to be faced with a proposal that weakens the existing program and we think she should veto it.

Dave Lombardo:  How will you judge the success of whatever version of this program finally takes effect in 2024 for state legislative races in 2026 for statewide races? Is it solely about the outcome of the elections? Is it solely about where money is coming from? What will be your metric for judging this?

Blair Horner: It's hard because there's so many other variables at play. The campaign contribution limits are. I mentioned before that the party committee limits have not been touched and of course, there's independent expenditure campaigns which could derail the whole system. Thank you, U.S. Supreme Court. I think it will be whether or not there are more competitive elections. I think that's going to be the driver because the more competitive elections there are in primaries and general elections, we think the more accountable lawmakers will be once they get into office.

Dave Lombardo:  What if the elections, themselves, aren't more competitive but let's say, incumbents start raising more of their money from within the district, from smaller donors and essentially appealing to them as opposed to the larger donors that they might have relied on in the past?

Blair Horner: Again, that would be good, but the more competitive elections are really, I think, the metric that the public should be looking at. It doesn't mean that the incumbents lose, by the way. Incumbents have advantage. They have a record to run on. Many of them are very competent, hard-working elected officials and shouldn't lose, but whether or not there are more competitive elections where candidates, challengers are actually able to raise the money to take on an incumbent, I think that's going to be the measure of whether or not, in our view, of whether or not the program was a success.

Dave Lombardo:  We've been speaking with Blair Horner. He's the Executive Director of New York Public Interest Research Group. Blair, thank you so much for joining us.

Blair Horner: Thanks for having me.