Public Campaign Financing
Contributors
Thai Loyd is currently a student at Columbia University majoring in Political Science. He has worked on international trade and economic policy at the White House and Congress.
Key things to know
The cost of running for state and local offices continues to rise, with state elections in 2024 projected to set a record $4.6 billion in campaign funding, according to OpenSecrets.
High campaign costs can discourage everyday citizens from running for public office, reinforcing a dependence on large private donations. This reliance risks prioritizing corporate and big-money interests, particularly in economic policymaking.
Public financing aims to reduce corruption, diversify candidate pools, and promote competitive elections by easing the financial barriers to candidate entry. These programs seek to empower grassroots candidates and mitigate the influence of wealthy donors on policy decisions. In theory, grassroots-funded candidates are more likely to prioritize issues such as wage increases and healthcare access — focusing on public interests rather than corporate agendas.
Small-donor donations are critical in public financing because they complement fund-matching programs and demonstrate broad community support. Activist groups and community networks are vital in mobilizing local support and helping candidates meet public financing requirements such as signature collections and small-donation thresholds.
Types of Public Financing Programs
Matching Funds — Amplifies small-dollar donations by matching them with public funds, increasing the impact of grassroots contributions.
Full Public Funding (“Clean Elections”) — Provides candidates with a lump sum of public money, replacing private donations entirely if certain thresholds are met.
Democracy Vouchers — Offers citizens vouchers they can allocate to candidates, allowing voters to fund campaigns directly without private contributions.
Case studies
New York City’s Matching Funds
Established in 1988 following corruption scandals, the New York City Campaign Finance Board’s Matching Funds Program matches small-dollar campaign donations with public funds to incentivize grassroots fundraising. Candidates for municipal offices—which include mayor, comptroller, public advocate, borough president, or city council—are eligible to participate. To qualify, candidates must demonstrate community support by meeting a minimum small-donation fundraising threshold and securing contributions of $10 or more from a specified number of residents within the area they seek to represent. Over time the program has evolved, including the 2018 referendum that increased the matching formula to $8-to-$1.
On the statewide level, the New York State Public Campaign Finance Program began in November 2022. The first eligible elections for state legislative offices are in 2024 and 2026. The program enables statewide and state legislative office candidates to receive public matching funds for small-dollar contributions from residents in their district. The program uses a tiered matching formula, with contributions matched at $6-to-$1 for statewide offices and up to $12-to-$1 for legislative offices, depending on the amount.
In December 2024, the New York City Campaign Finance Board voted to withhold over $4 million in matching funds from Mayor Eric Adams following federal corruption charges focused on his fundraising practices. Adams is accused of corrupt dealings with Turkish officials and using straw donors to fuel illegal campaign funds, some of which were used to obtain public matching funds.
Maine’s Clean Elections
Passed by voters in 1996, the Maine Clean Election Act (MCEA) established a voluntary program where candidates running for Governor, State Senator, and State Representative can receive full public financing for their campaigns. To qualify, candidates must demonstrate community backing by collecting certain checks or money orders of at least $5 made payable to the Maine Clean Election Fund. Once a candidate starts receiving MCEA funds from the state, they must stop taking private donations, and nearly all campaign expenses must be covered using these funds.
In 2015, Maine voters passed another citizen initiative expanding the MCEA. The amendments allow publicly funded candidates running in contested general elections to qualify for supplemental rounds of public funds. A 2019 report by the Maine Commission on Governmental Ethics and Election Practices highlighted the program’s success, emphasizing that the percentage of elected legislators who participated in the MCEA program has consistently been higher than the percentage of candidates participating.
However, participation has declined significantly since its peak in the mid-2000s. Only 56% of candidates opted into the MCEA program in the 2024 general election, compared to 60% in 2022 and 80% from 2006-2008. The decline is partly attributed to the 2011 Supreme Court decision in Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, which struck down matching funds for publicly funded candidates — leaving MCEA participants unable to match spending by traditional candidates. Republican participation in MCEA has also remained significantly lower than Democratic participation. In 2022, Republican participation in the MCEA program was 42%, while Democrats were at 77%.
Critics argue that public funding often benefits only the candidates themselves, with funds frequently spent on campaign materials like mail and lawn signs. However, despite declining participation, supporters emphasize that the MCEA has been instrumental in encouraging more people to run for office and ensuring they can stay competitive against better-funded opponents. The clean election model has also been introduced at the municipal level, implemented in Portland for the first time in the November 2023 election. The program showed promising results, including significantly reduced campaign spending compared to prior years and broader voter participation through $5 contributions.
Seattle’s Democracy Voucher Program
The Seattle Democracy Voucher Program, introduced in 2017 following the passage of the citizen-led initiative “Honest Elections Seattle” (I-122), is the first program of its kind in the United States. Designed to increase civic participation and reduce the reliance on big money in local campaigns, the program provides each eligible Seattle resident with four $25 vouchers to donate to local candidates of their choice. Funded through a property tax approved by voters in 2015, the program generates $3 million annually and costs the average homeowner about $8 per year. While participation in the program increased significantly from 2017 to 2021, with 48,000 residents participating in 2021, it declined to 30,649 residents in 2023, representing a participation rate of 4.72 percent. Factors such as voter fatigue and lacking a mayoral race in 2023 may have contributed to this drop.
The voucher program has shown significant success in increasing donor diversity, boosting voter engagement, and empowering new candidates to run for office. Recent studies have found that voucher users are generally younger and include a higher proportion of people of color and lower-income residents compared to traditional cash donors. Moreover, the program has enabled new and diverse candidates to run for office, such as Labor Democrat Teresa Mosqueda, who credits democracy vouchers for her successful city council campaign in 2017.
Possible pitfalls
While public campaign financing aims to create a more equitable electoral process, it has faced several challenges. Research suggests that small-donor matching programs may disproportionately benefit extreme candidates, as small donors often have more polarized views. This could inadvertently amplify extreme policy positions that do not reflect broader public sentiment. Some studies have even warned that public financing may benefit far-right extremist candidates the most, raising concerns about unintended consequences.
Alternatives, such as Seattle’s Democracy Voucher Program, may offer a more balanced approach by enabling all residents to allocate funds to candidates, potentially mitigating the risks of amplifying extreme candidates. To evaluate the effectiveness of public financing programs, key metrics should include their ability to foster diverse candidate pools, reduce corruption, ensure cost-effectiveness and sustainability, and enhance public trust. The example of New York City, where Mayor Eric Adams faced corruption allegations involving public matching funds, highlights the need for robust oversight and mechanisms to safeguard the integrity of these reforms.
The rising costs of advertising and campaigning raise questions about whether small-donor matches or lump-sum grants can keep pace with these expenses. Despite public financing, outside groups like Super PACs and dark money organizations can still exert significant influence by spending heavily on candidates, undermining the effectiveness of these reforms. For example, five of seven Seattle city council races in 2023 were heavily influenced by PAC spending, leading some to advocate for higher spending caps or additional voucher funding for candidates to counterbalance PAC funding. Furthermore, the low participation rate of 4.72% in Seattle’s 2023 Democracy Voucher Program underscores the challenge of educating and engaging a larger portion of the electorate in efforts to democratize campaign finance.
Conclusion
Public campaign financing offers significant potential to reduce the influence of wealthy donors, diversify candidate pools, and empower grassroots campaigns. However, challenges like low participation rates, escalating campaign costs, and the continued dominance of outside spending underscore the need for ongoing evaluation and innovation of the programs.
To fully realize their potential, public financing must address systemic barriers to participation and adapt to the realities of modern campaigns. The ultimate success of these reforms depends on their ability to produce elected officials who are representative of the electorate and empowered to prioritize public interests over private ones. If refined and widely implemented, public campaign financing can be a transformative tool — strengthening democracy and advancing economic progress by curbing the influence of corporate and big-money interests over policy decisions.
Further readings
On Political Implications
The Impact of Public Financing on Electoral Competition: Evidence from Arizona and Maine
Public Money Talks Too: How Public Campaign Financing Degrades Representation
Public Campaign Financing and the Rise of Radical-Right Parties
Does Public Election Funding Create More Extreme Legislators? Evidence from Arizona and Maine
On the Seattle Democracy Voucher Program
Democracy Vouchers and the Promise of Fairer Elections in Seattle
The Effects of Public Campaign Financing: Evidence from Seattle’s Democracy Voucher Program
For a High-level Overview
Table: Public Financing Case Studies
