Testimony of Frederick Schaffer, Board Chair, New York City Campaign Finance Board, to the New York State Senate Elections Committee
Good afternoon, Chair Myrie and members of the State Senate Elections Committee. My name is Frederick Schaffer, and I am the Chair of the New York City Campaign Finance Board (CFB). With me is Amy Loprest, Executive Director of the CFB. Thank you for the opportunity to provide testimony today.
The CFB is an independent, nonpartisan agency that administers New York City’s public matching funds program. This is an exciting moment to discuss public financing of elections. In New York City, we’ve seen the matching funds program reduce the role of big money in elections and make the contributions from everyday New Yorkers more valuable. Because of the program’s demonstrated impact over three decades, our matching funds program has become a model to other jurisdictions as they adopt their own public financing systems.
New York City’s Campaign Finance Act
In February 1988, after a series of corruption scandals in city government, the New York City Council passed the Campaign Finance Act, which created New York City’s landmark public matching funds program. The Act covers candidates seeking election to the offices of mayor, comptroller, public advocate, borough president and City Council.
The program has undergone numerous changes over the course of three decades. When first established in 1988, the matching funds program matched contributions up to $1,000 at a $1-to-$1 ratio. To increase the incentive for candidates to raise small-dollar contributions, the rate was changed in 1998 to provide a $4-to-$1 match for the first $250 per contributor, and was again increased in 2007 to a $6-to-$1 formula for the first $175. Last November, New Yorkers overwhelmingly approved a ballot measure to increase the matching rate yet again to $8-to-$1 for the first $250 for citywide offices and $175 for all other offices, and increase the amount of public funds available to candidates.
The Charter referendum also cut contribution limits by more than half, lowering contributions for mayoral candidates from $5,100 to $2,000, and lowering contributions to City Council candidates from $2,850 to $1,000. Over 1.2 million New Yorkers voted in favor of the new program, which was approved with over 80 percent of the vote.
To receive matching funds, candidates must also demonstrate that they have earned a sufficient level of public support from their neighbors and constituents. Candidates must satisfy a two-part fundraising threshold to qualify. For example, City Council candidates must raise $5,000 in matchable contributions and collect 75 contributions from the district they seek to represent. Candidates for mayor must raise $250,000 in matchable contributions from at least 1,000 city contributors.
Additionally, individuals who are doing or seeking business relationships with the city must abide by stricter contribution limits. The “doing business” contribution limits are $400 for mayoral, public advocate and comptroller candidates, $320 for borough president candidates, and $250 for City Council Candidates.
Results in New York City
The matching funds program was designed in part to get more New Yorkers involved in their elections. With over three decades worth of evidence, we can show that the matching funds program has done so.
Each election cycle, we see high candidate participation in the matching funds program, with typically 90 percent of candidates participating in the primaries, and two-thirds of candidates participating in the general. Both incumbents and challengers tend to participate in the program and are able to run viable campaigns. These high participation rates are an important indicator of the program’s success.
The small dollar matching funds program in New York City brings more individuals into the political process. Contributions in the matching funds program truly come from every corner of the city. In the 2017 elections, 93 percent of Census block groups in New York City had at least one contributor. Additionally, 96 percent of all the funds raised by candidates came from individuals, most of it from city residents. By contrast, 68 percent of funds candidates raised for state legislative office in the 2016 elections came from special interests and corporations.
We’re already seeing positive results from the new $8-to-$1 match for the recent February special election for public advocate. Early data suggests that average frequent contributions are getting smaller under the new program. So far, the most frequent contribution is $10 for public advocate candidates, compared to $100 in previous elections.
In the years since Citizens United, we’re proud of how the matching funds program has given candidates the ability to compete when challenged by independent spenders. For example, three City Council candidates in the 2013 elections overcame massive independent expenditures aimed at electing another candidate. They were outspent 2-to-1 by independent groups, but public funds helped them get their message through to voters. While there is no perfect system to counteract independent spenders, the matching funds program continues to allow candidates to run competitive campaigns in the face of independent expenditures.
Enforcement, Oversight and Disclosure
The CFB promotes transparency and accountability through our independent, nonpartisan oversight. Our enforcement and disclosure helps New Yorkers to hold their elected representatives accountable. This oversight is important for both the integrity of the program as well as the public’s confidence. We hold every candidate to a high standard, and seek to ensure that all candidates are playing by the same rules.
We work hard to help more candidates qualify for public funds and run successful campaigns. Our Candidate Guidance and Policy unit provides extensive training and assistance to campaigns, and each campaign has an assigned candidate services liaison to contact with any questions they may have. Our Audit unit reviews each disclosure filing to alert campaigns to any issues with their matching claims and provide them the opportunity to fix problems that could impact their public funds payments. The candidate services liaisons and auditors provide guidance to campaigns to help them fix any compliance issues and navigate the post-campaign audit process.
After each election, we audit every campaign to ensure each campaign’s spending is consistent with the Act, and that each campaign’s public disclosure is complete and accurate. In many cases, our liaisons help candidates navigate our program with little to no penalty. For the 2017 elections, to further streamline the audit and enforcement process, we created a set of objective criteria based on campaign spending, reporting, and whether a candidate received public funds to limit the number of campaigns that receive a full audit.
Finally, we conduct a review after every election cycle and make recommendations to the mayor and the City Council to improve the public matching funds program. This post-election review is required by the Campaign Finance Act, and has ensured the program evolves to meet the new challenges of an ever-changing landscape of city elections.
Over the past three decades, the matching funds program has helped create a political system that is more transparent, more inclusive, and fairer. By encouraging candidates to solicit small dollar contributions from everyday New Yorkers, the matching funds program helps create a government that is truly representative of the city at large.
Thank you for the opportunity to provide testimony today, and I’m happy to answer any questions you might have.