The legislature passed AB 583 with 53% approval in both the State Senate and Assembly, and put it on the ballot as Proposition 15. This legislation seeks to amend previous initiatives, including repealing part of Proposition 73 of 1988. It does not change the State Constitution.

The Origin of Proposition 15         

The California Clean Money Campaign (CCMC) worked with former Assemblymember Loni Hancock (now chair of the Senate Elections Committee) to author AB 583. CCMC is a nonpartisan grass roots organization that advocates for open, accountable and responsive government, and to build statewide support for public funding of election campaigns.

Background on Campaign Finance Law

Attempts to regulate and enforce campaign finance limitations date back to 1867, but were largely unsuccessful until the Watergate scandal brought added impetus for such reforms in the 1970’s. The Federal Election Campaign Act (FECA) instituted broad disclosure of campaign contributions, campaign contribution limits and spending limits. Both federal law and the California’s Political Reform Act of 1974 require candidates for public office to report contributions they receive and money they spend on their campaigns.

In 1976, the Supreme Court upheld FECA’s limits on campaign contributions but struck down its spending limits, ruling that spending money to influence elections is a form of constitutionally protected free speech (Buckley v. Valeo [2], January 1976). The court also ruled that candidates can give unlimited amounts of money to their own campaigns. Since this landmark Supreme Court decision, limits on campaign spending have not been allowed, except for some voluntary spending limits where candidates agree to abide by spending limits in exchange for some campaign advantage.

California voters next faced major campaign finance reform, when two competing measures appeared on the June 1988 ballot. Both measures limited campaign contributions for state candidates, but Proposition 68 also sought to create a voluntary public financing system for state legislative candidates, while Proposition 73 banned public funding of campaigns. Both propositions passed, but since they were in direct conflict, the one with more YES votes, Proposition 73, went into effect, and none of Proposition 68 went into effect.

By 1993 the campaign contribution limits of Proposition 73 had been ruled unconstitutional by federal courts, and there were again no such limits for state candidates. However, Proposition 73’s prohibition on public money for campaigns remains in law today.

The next attempt at campaign finance reform for state candidates came with voter approval of Proposition 208 in 1996. That measure had both strong contribution limits and voluntary spending limits, but it was challenged in court and remained in limbo for years. In the meantime, the legislature amended Prop 208 by repealing many of its provisions and putting forward a set of weaker limits. Voters approved those changes as Proposition 34 in 2000, instituting contribution limits which have remained in force for state candidates. 

The most recent attempt at campaign finance reform was Proposition 89 of 2006, an initiative sponsored by the California Clean Money Campaign. It would have instituted voluntary public campaign funding for all state offices and paid for it with a 0.2% income tax increase for corporations and financial institutions. That measure failed with 74% voting “NO.” The public funding of Prop 89 was similar to what is being proposed in Prop 15.

Public Funding of Campaigns in Other States

Public financing of political campaigns has passed in eight states and two municipalities since 1996. These laws are commonly known as “Clean Money” or “Clean Elections” regulations. Proposition 15 is patterned after public funding systems in Arizona, Maine and Connecticut. The systems in Maine and Arizona have been in effect since 2000, and Connecticut’s began in 2007. Initial studies of the Maine and Arizona programs show an increased number of contested races and an increase in small-donor participation since the public financing laws went into effect. In Arizona, 28 out of 32 candidates for statewide office ran publicly financed campaigns in 2002. In Maine that same year, 70% of State Senate candidates and 50% of State House candidates ran publicly financed elections.

Legal challenges to the constitutionality of these programs are common. Courts in both Arizona and Vermont have invalidated the use of lobbyist fees for public campaign financing. There is also an appeal pending (McComish v. Bennett, 9th District Court of Appeals) on a ruling by an Arizona court that it is unconstitutional to use public matching funds for campaigns. Based on these legal proceedings, it is likely that Proposition 15, if approved by voters, would be challenged in court.

Conflict between Propositions 14 and 15

Proposition 15’s public funding program is based on current law regarding how the Secretary of State is elected. It uses language that refers to the current partisan primary and general election system. Proposition 14 would change those elections. Consequently, if both Propositions 14 and 15 pass, there would be conflicting provisions in the election code that would have to be reconciled by some combination of additional legislation, judicial action, or future ballot measures.

Controversy Over Tax Effect of Proposition 15

The court ruled that Prop 15 cannot be described by opponents in the voter manual as a measure that will "raise your taxes" – because for the general public, it won’t. Instead, the opponents were allowed to argue that the measure would result in "new taxes."

Financial Details of Proposition 15

Lobbyists currently pay a $25 fee every two years, which goes into the state’s General Fund. Under Proposition 15, that would remain unchanged, and the remaining $675 of the newly-imposed $700 fee would go into a new Fair Elections Fund and be used for the public funding program. The lobbyist fee would be adjusted annually for inflation, increasing or decreasing in accordance with the Consumer Price Index.

There would be a tax check-off on the state personal income tax return where taxpayers could designate an amount in excess of their tax liability to go into the Fair Elections Fund. After deducting the costs of implementing this provision, the balance of the tax check-off money would be transferred to the Fair Elections Fund.

Campaign Finance Law and the Ballot

Proposition 15 only involves statutes. So, why does it have to come to the ballot? The initiatives being amended by Proposition 15 allow the legislature to make changes to further the purposes of the original initiative, with 2/3 approval by each house plus the governor’s signature. However, the provision of Prop 15 that repeals the ban on using public money for campaigns does not further the purposes of the original initiative and therefore could not be enacted without approval by the people, regardless of the vote in the legislature.

It is generally true that law put into place by the people often must come back to the people to be changed. But, there are other reasons why we see campaign finance laws on the ballot so frequently. These laws often get altered by court action, and that can cause a new round of proposals. Also, the self-interest of the legislators can make it difficult to get campaign finance changes passed without resorting to the ballot.