Prop H: Use tax dollars to boost democracy

HomeElectionsProp H: Use tax dollars to boost democracy

Austin initiative modeled on Seattle’s program now in its third election cycle

Proposition H: Shall the City Charter be amended to adopt a public campaign finance program, which requires the city clerk to provide up to two $25 vouchers to every registered voter who may contribute them to candidates for city office who meet the program requirements?

In Austin the idea of using taxpayer money to assist in funding election campaigns of mayoral and City Council candidates may seem novel. But the practice of using public funds to reduce the influence of wealthy candidates and big donors has been around for a long time.

Presidential candidates used to have access to a program of federal funding for their campaigns. That started in 1971 with passage of the Federal Election Campaign Act that required disclosure of funders, placed limits on campaign spending, and provided matching funds for presidential but not congressional candidates. Those reforms increased transparency and reduced the influence of wealthy donors, according to Reclaim the American Dream.

The late Senator John McCain used that program for his presidential campaign opposing Barack Obama in 2008. Before him, the Act was used by Jimmy Carter, Ronald Reagan, George H.W. Bush, and Bill Clinton. The program wasn’t able to keep up with the skyrocketing costs of presidential campaigns, however. “Obama’s decision to opt out was the death knell for the system. Since 2008, no presidential candidates have used the public financing system at all,” Reclaim the American Dream stated.

Today providing public funding for election campaigns is so popular among Democrats in Congress that they passed H.R. 1, the For the People Act of 2021. The bill—if enacted—would offer 6:1 matches of small donations for qualifying congressional candidates.

The Brennan Center for Justice’s annotated guide for the 886-page bill states, “Across 10 titles, this historic legislation would make it easier to vote in federal elections, end congressional gerrymandering, overhaul federal campaign finance laws, increase safeguards against foreign interference, strengthen government ethics rules, and more.

“Most of these reforms would be implemented for the November 2022 general election, with the exception of some redistricting and public financing changes that would go into effect later,” the guide states.

These reforms are designed in part to counteract the voter suppression legislation that’s been proposed, or already enacted, in the vast majority of GOP-controlled state legislatures.

H.R. 1’s Senate counterpart, S.1, had a March 24th hearing in the Committee on Rules and Administration but has not advanced.

Lloyd Doggett

Representative Lloyd Doggett (D-Austin) responded to The Austin Bulldog’s request for comment and issued this statement:

“Without an exception to Senate filibuster procedure, this vital bill cannot become law, permitting Republican voter suppression laws to impact next year’s election. We are organizing a national day of action to inform and engage more Americans in ending the filibuster and seeking every opportunity to work with Senators to overcome the roadblock. We cannot give up on preventing a Republican takeover of Congress through voter suppression and extreme gerrymandering.”

States, counties and cities fund campaigns

Seventeen states have adopted various forms of publicly funded elections, though some to those have been repealed due either to U.S. Supreme Court decisions, legislative action, or voter referendums, according to Wikipedia.

Montgomery County, Maryland’s program was reported by the Washington Post in June 2017. Howard County, Maryland’s program was scheduled to take effect in the 2022 election cycle.

Some cities have also seen the value of leveling the playing field so that candidates who aren’t wealthy or backed by rich donors may run competitive campaigns.

New York City adopted a system of matching funds for candidates in city elections way back in 1988. Today its Campaign Finance Board administers the voluntary program, which matches small contributions from NYC residents and allows participating candidates to receive up to $2,000 in public funds per eligible voter. “Matching funds get more New Yorkers involved in elections, and they help ensure elected officials are accountable to city residents, not to special interests,” the Board’s website states.

Voters in Baltimore and Denver approved ballot measures for public financing of campaigns in 2018, according to an article in Governing. Denver’s system would match contributions of up to $50 by a nine-to-one ratio, meaning a $50 donation is worth $500 to a candidate.

Voters in Seattle in 2015 approved a citizen-led initiative known as Honest Elections Seattle. The resulting Democracy Vouchers program took effect in the 2017 elections. The program is funded by a 10-year property tax levy that collects around $3 million annually. The main goal was to make local Seattle elections more democratic and broadly representative. It took effect with elections in 2017 for a city attorney’s race and two at-large council positions.

Despite these positive examples, initiatives for public campaign financing don’t always succeed. Albuquerque voters rejected such a proposal in 2019. And did so despite favorable endorsements by Democratic presidential hopefuls Elizabeth Warren, Bernie Sanders, and Julian Castro.

Austin enters the fray

Now on May 1st it is Austin’s turn to decide whether to allocate a relatively small amount of money taken from the general fund to boost campaign funding of qualified candidates. It’s a far cheaper program than Seattle’s.

While this initiative was brought to the ballot through a petition drive led by Austinites for Progressive Reform, it’s not the first such effort here.

Paul Seamus Ryan
Paul Seamus Ryan

Austin’s 2018 Charter Review Commission spent considerable time and effort reviewing Seattle’s system. Paul Seamus Ryan, Common Cause’s national vice president for policy and litigation, helped draft Seattle’s program. Wayne Barnett, executive director of Seattle’s Ethics and Election Commission, implemented it. Both came to Austin to brief our Charter Review Commission in January 2018 and the Bulldog reported it.

Teresa Mosqueda
Teresa Mosqueda

In addition, the Bulldog reported that Seattle Council Member Teresa Mosqueda, who was elected using Seattle’s Democracy Voucher program, came to Austin in February 2018. She briefed the public at a branch library and then the Charter Review Commission. Before running for office, Mosqueda, then a 36-year-old Latina and labor activist, said she was virtually unknown to Seattle’s population of 705,000 people. More than 500,000 of them were registered voters and each had received four $25 Democracy Vouchers in the mail.

Fred Lewis

Attorney Fred Lewis, a 2018 Charter Review Commission member, drafted an Austin charter amendment modeled on Seattle’s program. The Commission held several public hearings at different venues around town that drew just three people. The Commission debated the proposal at length and got endorsements for numerous organizations, including Common Cause Texas, Public Citizen Texas, League of Women Voters Austin, Clean Elections Texas, Texans for Public Justice and Common Ground for Texans.

Finally, after extensive debate, the Commission voted 7-3 to recommend the City Council put Democracy Dollars on the ballot in November 2018. In all, the Commission sent nine charter changes to the council. Ultimately only two of the least consequential measures were put on the ballot.

Austinites for Progressive Reform, formed here last year, gave new life to the Democracy Dollars proposal by conducting a petition drive to get Proposition H and several other charter measures on the May 1st ballot. Prop H is, in effect, a scaled down version of the 2018 Charter Review Commission’s recommendation.

Lewis said the 2018 version would’ve given four $25 vouchers for each election, while Prop H would provide half that number. The 2018 plan would’ve required $1.5 million for vouchers vs. Prop H’s $500,000. The 2018 plan would’ve given a $5,000 seed donation to qualifying candidates, whereas Prop H provides none. “The program is essentially the same except it’s more modest in cost,” Lewis said.

“They decided to make the program more modest and use it for a couple of election cycles, and if people liked it perhaps make it more robust,” Lewis said. “Actually that was wise.”

Numerous opponents

Roger Borgelt

Chief among the naysayers on the 2018 Charter Review Commission was attorney Roger Borgelt, a former vice chair of the Travis County Republican Party. He’s still involved with the party and is no less opposed to giving candidates public funds this time around.

“It would be wrong,” Borgelt told the Bulldog in a telephone interview. “You’re taking taxpayer money and using it to pay for someone’s political speech. If I want to donate to someone, fine. I pay taxes for city services and things provided by the city. I don’t pay taxes to put money in someone’s campaign treasury. I shouldn’t be required to pay for people whose views I disagree with.

“I think it violates the First Amendment and I would not be surprised if there’s litigation. That’s something I would contemplate being the attorney for, not something I would be the plaintiff for.”

Washington’s state Supreme Court unanimously upheld Seattle’s Democracy Vouchers program, the Seattle Times reported in September 2019.

When told that Seattle’s program had survived court challenges, Borgelt replied, “Maybe Seattle’s court system might not be as amenable to that type of lawsuit as Texas courts.”

The Austin Chamber of Commerce website indicates the organization is opposed to Prop H but provides no indication of why.

Other critics want more participation

The Austin Monitor reported March 31st that Workers Defense Action Fund and Union Local 23 oppose Proposition H because it would provide vouchers only to registered voters. Immigrants with green cards are not eligible to register to vote, so they’re excluded. Likewise some people are unable to vote because of their criminal history.

Greg Casar

The Monitor reported Council Member Greg Casar has drafted an ordinance that if enacted would create a parallel funding program for all residents able to make political contributions. That ordinance would establish a voluntary $5,000 limit for candidates who participate in the Democracy Dollars program. The limit would apply to funding one’s own campaign, giving money to political parties, to political committees, or to any organization that makes independent expenditures for or against a candidate in the same election cycle.

The draft ordinance would also establish a separate fund to provide vouchers to recently arrived residents who have lived in the city for at least 60 days and are not registered voters.

State legislation sought to bar Democracy Dollars

Donna Campbell

While the 2018 Charter Review Commission’s recommendation for a Democracy Dollars program never made it to the ballot, the very idea of using taxpayers’ money to help candidates drew an attempted legislative prohibition. State Senators Donna Campbell (R-New Braunfels) and Bob Hall (R-Rockwall) introduced SB 974 in the 2019 session.

The Bill analysis states: “Reports indicate that some political subdivisions are considering adopting policies that would use taxpayer dollars to fund local campaigns through vouchers mailed to registered voters that could be assigned by those voters to political candidates. SB 974 seeks to address this issue by prohibiting a political subdivision from adopting or implementing a policy or program that permits the use of public money or revenue to finance political campaigns.”

The bill passed unanimously in the Senate’s State Affairs Committee and passed in the full Senate. The House referred the bill to the Elections Committee, which reported it favorably without amendment but the bill died in the Calendars Committee.

Senator Campbell’s office did not answer the Bulldog’s question about whether similar legislation is in play for the current legislative session.

How Democracy Dollars would be funded

If voters approve Prop H, the program vouchers would be financed by an allocation of $500,000 from the City’s general fund each year. The money would be kept in a dedicated program fund administered by the City Clerk. The fund would also receive all candidate filing fees, criminal penalties, donations and grants for the program, plus interest on the fund.

Mackenzie Kelly (left) and Jennifer Virden

Proposition H would repeal sections of the City Charter that established an Austin Fair Campaign Finance Fund. That program permitted candidates who signed a pledge to observe voluntary limitations on contributions and expenditures to receive a share from that Fund if they make it into a runoff. In the 2020 election runoffs, challengers Mackenzie Kelly in District 6 and Jennifer Virden in District 10 each received $26,443 from that Fund.

Proposition H would also require the Council to provide the City Clerk with funds to administer and publicize the program. Austinites for Progressive Reform estimates administration would cost $350,000.

Andrew Allison

Austinites for Progressive Reform’s Chair Andrew Allison said the group’s $350,000 cost estimate for the program’s administration was taken directly from the work done by the 2018 Charter Review Commission.

The City of Austin, however, estimated the program would cost $2.3 million per year for vouchers and administrative costs—nearly triple the cost that advocates estimated.

Fred Lewis, who drafted the 2018 proposal and is on the Steering Committee for political action committee Austinites for Democracy Dollars, provided a four-page memo titled “Prop H is Worth the Investment in Democracy. The Real Costs are Modest.”

The memo was signed by Lewis and two dozen other prominent Austin residents. It states, “Opponents can’t explain why Seattle’s program has four times more vouchers than Austin’s program, but they project Austin’s program will cost twice Seattle’s” (to administer).

If the City Council can’t cough up $850,000 a year to fund the program, the memo sarcastically suggests eliminating the City’s “unnecessary” $1.5 million to $2 million annual tax break given to the “incredibly profitable Domain” shopping center.

Brian Rodgers
Brian Rodgers

In that regard, it should be noted that real estate investor and civic activist Brian Rodgers once sued the City of Austin and Endeavor Real Estate, the Domain’s developer, over that tax break. The parties reached a settlement in 2004 that said the agreement that gives millions of dollars in rebates of sales and property taxes for the high-end Domain shopping center would be strictly voluntary. The city is no longer obligated to fund the agreement, and Endeavor gave up its right to sue.

In spite of that agreement, the City Councils ever since have chosen to continue paying the subsidy.

How candidates would qualify for Democracy Dollars

Under Prop H any candidate seeking to receive Democracy Dollar Vouchers must meet two threshold criteria.

First, candidates who desire to participate in the Democracy Dollars program would have to obtain at least 150 donations of $10 or more from an adult Austin resident (18 years or older). The donor must be a natural person eligible under federal law to make political contributions.

Second, they must gather at least twice as many signatures as would be needed to qualify for a place on the ballot. That number varies widely as it’s based on a percentage of voter turnout in each district’s most recent election.

Austinites for Progressive Reforms analyzed the number of signatures that would have been required if the Democracy Dollars program had existed in the 2018 council and mayoral election and the 2020 council election.

In 2018, on the low end, District 2 candidates would have had to gather only 90 signatures to qualify for the program, while the mayoral candidates would have had to get 1,752 signatures.

In 2020, on the low end, District 4 candidates would have needed 120 signatures, while District 10 candidates would have needed 390.

Is the program worth the money?

Whatever the actual costs of a voter-approved program, one can’t assess the worth of an investment in Democracy Dollars without weighing costs against the potential benefits.

Austinites for Progressive Reform on its Yes on H Austin website notes “Only a fraction of Austin voters donate to candidates for local office, and of those who donate, the overwhelming majority of residents reside in wealthier areas.”

In fact, it claims, 68 percent of all contributions to city council campaigns come from just three council districts.

Distributing $25 Democracy Dollars to every registered voter who’s qualified to vote in a given election would allow them to back their preferred candidate, without regard to the voter’s personal income.

The overarching goals are to expand democracy and empower grassroots candidates who have community support but lack the personal means or networks to raise enough money to wage a competitive campaign.

A byproduct of that is to reduce the influence of big donors, which Democracy Dollars ATX refers to as “special interests.”

Speaking of which, The Austin Bulldog’s analysis of campaign contributions made in the first half of 2020 for council elections that year showed that 19 percent of all contributions came from the real estate and construction industries.

Austinites for Democracy Dollars followed up and expanded on the Bulldog’s analysis. It found that “at least 25 percent of the almost $1.7 million in contributions raised by the best funded 13 candidates seeking five City Council seats in 2020 came from real estate or construction interests.

Except for donors who worked for the City of Austin, the law firm of Armbrust & Brown led all other employers with contributions totaling more than $51,000. Endeavor Real Estate Group employees’ contributions totaled more than $41,000.

Not all candidates enjoying developer support won, however. District 6 incumbent Jimmy Flannigan and District 2 candidate David Chincanchan each got 38 percent of their contributions from developer interests. Both lost.

Democracy Dollars ATX claims its program will increase the number and diversity of campaign donors, increase voter turnout, and improve the chances for independent candidates to run and win.

While these aspirations may seem like a stretch for a program that hasn’t been implemented in Austin, they are in keeping with the results under a similar program in Seattle.

A Seattle candidate’s experience

In 2017 a not well known Teresa Mosqueda won an at-large seat on the Seattle City Council. The slides she used in presenting information here in Austin stated she was nationally the first candidate to win an election with Democracy Vouchers.

Here are some of the highlights from her campaign slides:

More donors—Nineteen times as many Seattle-based donors participated in the 2017 election than in 2015, before the Democracy Vouchers program was implemented. The vast majority of those increased donations came from Democracy Vouchers.

Smaller average contributions— Contributions made to candidates averaged more than $200 in 2015. The average contribution in 2017 fell to a third of that amount.

Democracy Vouchers dominated—Almost $300,000 of the $459,000 in contributions Mosqueda received in 2017 came from Democracy Vouchers.

A more complete analysis of Seattle’s Democracy Voucher Program was published by Fels Institute of Government at the University of Pennsylvania. That study, which was occasioned by consideration of bringing the program to Philadelphia, found the program in 2017 tripled the number of residents participating in the campaign finance system. The 2019 election doubled participation in the voucher program. That year 53 candidates pledged to participate and 35 qualified. Voucher users continued to be more likely than the average Seattle resident to be older, female, white, and live in middle-class neighborhoods.

Major Austin endorsements

The Austin Chronicle  endorsed Proposition H. Other Austin endorsements for Proposition H may be found at the Yes on H website and in an Austinites for Progressive Reform’s press release.

The Austin American-Statesman did not endorse Prop H. Its editorial states, “Only a sliver of voters participated in a similar voucher program in Seattle, and the effort did little to curb the flow of big money into politics. While well intentioned, this program does not appear to be a worthwhile investment.”

Andrew Allison, chair of Austinites for Progressive Reform, said, “The Statesman’s editorial seems to say that it’s a good program but not enough people will use it, it’s not big enough, therefore vote no. Their mistake in logic is clear. If it’s a good program we should vote yes on it.”

“In its first four years Democracy Dollars will increase the number of donors by more than 500 percent. That was proven in Seattle. Because the two programs are so similar we expect similar results. In Seattle voters became more diverse in every way. There were more women, more people of color, younger people, and people earning less than $100,000 per year.

“(Seattle) had candidates using Democracy Vouchers who were able to win against candidates heavily funded by Amazon,” Allison said. His claim was supported by a report from the Proteus Fund, whose mission is to partner with foundations, advocates, and individual donors to advance democracy, human rights, and peace. Its report on Seattle’s 2019 election called it “Amazon’s unsuccessful attempt to purchase Seattle’s city council.”

“The Statesman underestimated dramatically what the program is trying to do,” Allison said.

Trust indicators: Ken Martin has been covering local government and politics in the Austin area since 1981. See more about Ken on the About page.

Links to related documents:

Austinites for Democracy Dollars memo on cost of the Democracy Dollars program, April 16, 2021 (4 pages)

Austinites for Progressive Reforms Analysis of Signature Requirements to qualify for Democracy Dollars (Excel spreadsheet)

City of Austin’s Assessment of Fiscal Impact for May 2021 Charter Amendments, April 2, 2021 (3 pages)

Council Member Greg Casar’s draft ordinance (2 pages)

Developer Dollars Fuel Campaigns for Austin City Council (32 pages)

Evaluating Seattle’s Democracy Voucher Program, Fels Institute of Government, Summer ’20 (14 pages)

H.R. 1, For the People Act of 2021 (886 pages)

Seattle Council Member Teresa Mosqueda slides concerning the effect of Seattle’s Democracy Vouchers on her 2017 campaign (14 pages)

Links to related Bulldog coverage:

Prop F strong mayor faces major opposition, April 19, 2021

Court orders Prop B language change, March 2, 2021

Save Austin Now takes case to Texas Supreme Court, February 25, 2021

City files response to Save Austin Now lawsuit, February 24, 2021

Save Austin Now petitioners file suit challenging ballot language, February 21, 2021

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