Bridging the Gap

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Santa Cruz City Council finds a compromise on campaign finance reform

The debate over campaign finance reform in Santa Cruz took a surprising turn last week, when Santa Cruz City Councilmember David Terrazas proposed reinstating a voluntary limit on campaign expenditures for City Council races, after joining in a vote against a similar proposal two weeks ago.

“I think we need to look at some additional signals of restraint in regards to our campaign expenditures,” Terrazas said at the June 24 council meeting. The new voluntary limit would be a guideline for how much money candidates can raise, although it’s about $10,000 higher than the limit from previous elections. Organizations will no longer be able to contribute more than individuals to candidates who accept the limits. This all started with a discussion about campaign finance reform at a June 10 council meeting, when Councilmember Micah Posner and Vice Mayor Don Lane introduced a proposal that aimed to rein in council candidate spending.

Under an ordinance created over a decade ago, the city of Santa Cruz had provided incentives to candidates who agreed to voluntary contribution and expenditure limits for their political campaigns, which would have been just under $29,000 for the 2014 election season. Lane and Posner’s proposal sought to make the voluntary limits City Council candidates can receive from individuals and groups—$345 and $825 respectively—mandatory. It would have also created an option for those candidates who agree to the voluntary overall expenditure limit to receive up to about $15,000 in matching money from the city’s general fund.

Posner and Lane said they believed the public funding would “level the playing field” for economically disadvantaged and first-time candidates, and those not as experienced in the art of fundraising.

“The reason I am bringing this up,” Posner said at the June 10 City Council meeting “is because I view the country as a whole to have a problem with the amount of money that is spent on political races.”

After public comment, councilmembers voiced their concerns. Terrazas stated that the proposal was “a solution looking for a problem,” and Councilmember Pamela Comstock pointed out that the proposal did not address money spent by special interest groups to endorse candidates, also known as independent expenditures.

Comstock highlighted an $8,300 independent expenditure made by a labor union that benefited Posner in the 2012 election. “As long as special interest groups have a hand in elections, the playing field will never be level,” she said.

Councilmember Cynthia Mathews then presented a pair of game-changing amendments just as Posner’s proposal was about to go to a vote: one to establish mandatory contribution limits of $350 from any entity, whether they be an individual, corporation, or organization; and the second to repeal provisions of the city code which would eliminate voluntary expenditure limits entirely, and also nullify Posner’s public finance proposal.
Mathews said that the existing voluntary limits have little benefit, and can even work against beginning candidates who may need to spend more money to make their presence known. She also stated that she was against the use of public financing for candidates.
The universal contribution limit of $350 passed unanimously. The decision to repeal the voluntary expenditure limits passed 4-3, with Lane, Posner, and Councilmember Hilary Bryant voting against it.

“I was shocked,” Posner said in the days prior to the June 24 council meeting, where Mathews’ amendments were expected to be finalized.

At the second reading of the amendments, Terrazas proposed reinstating the voluntary expenditure limits, but with a higher ceiling of $38,064, which Mathews agreed was a more realistic amount. Terrazas also asked that the city attorney explore options to make independent expenditures made by special interest groups more transparent.

Lane then proposed a stipulation to the ordinance that would make it mandatory to post independent expenditures totaling more than $1000 for any given candidate on the city’s website, and release the information to the press within two business days. “We can’t stop the independent expenditures, but if we shine a bright light on them, I think it will both discourage the independent expenditures to some extent, but also counter them,” Lane said.

The council included Lane’s addition, and the proposed amendments passed with a 6-1 vote, with Comstock, who felt the updates didn’t address independent expenditures, dissenting.

Comstock—who did not accept the limits in her 2012 council bid, and raised the most money of any candidate— says she would only support spending limits, voluntary or not, if they included independent expenditures by outside groups.

“Really, it’s about whether you want special interests to control elections, or you want to give equal voice to voters,” she says.
An official adoption of the amendments is still in order, and will take place on July 8. If no further arguments are made, the $350 mandatory contribution limit, the raised voluntary expenditure limit, and the reporting of independent expenditures will take effect in early August.

Posner acknowledged that the council has embraced real change on the issue of local campaign finance reform.

“I appreciate that the council is really wrestling with these issues,” Posner said at the June 24 council meeting. “I’ll just appreciate the progress of the council, and keep working for public financing as we go down the road.”

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