Governor Dennis Daugaard identified Initiated Measure 22 as Budget Enemy #1 in his budget address yesterday. He says the $4.9 million ($9 times 546,615 currently registered voters) Section 68 of IM 22 appropriates for the new “Democracy Credit Fund” is too big a chunk of the $19.7 million in new revenue he allocates in his FY2018 proposal.
The Governor focused his tirade against that $4.9 million on the public campaign financing function of the Democracy Credit Fund. However, per Section 42 of IM22, the Democracy Credit Fund provides cash not only for the Democracy Credits that every voter is eligible to receive and direct toward candidates’ campaigns but also for “paying for the administrative and enforcement costs of the ethics commission….” In other words, when the Governor vows not to fund IM22, he is vowing not to fund a state ethics commission.
It is entirely possible that candidates may receive only a small portion of that $4.9 million (plus whatever comparable amount would be appropriated in the FY2019 budget). Those competing to succeed Governor Daugaard won’t get any of it: Section 50 phases in the Democracy Credits, making them available only to qualifying legislative candidates in the 2018 election. Whoever’s up for PUC will be able to seek Democracy Credits in 2020; gubernatorial and other statewide candidates will have to wait for their shot at public campaign financing until 2022. Candidates for Congress cannot qualify for Democracy Credits.
Section 59 caps the amount each legislative candidate can collect in Democracy Credits in a single election year at $15,000. Section 60 caps total disbursements to all legislative candidates at $6,000,000. That’s enough to fund 400 candidates, or 3.8 candidates for every seat. This year we had 203 legislative candidates. If we stepped that up just a bit in 2018 and fielded 210 candidates, two for each seat in Pierre, and if all of them qualified for Democracy Credits, and if they all maxed out, they’d use $3.15 million from the Democracy Credit Fund.
Not every legislative candidate will qualify for Democracy Credits. Not every candidate will want to. Here are the conditions for legislative candidates:
- Can’t spend more than $1,000 of one’s own money on the campaign [Section 51(1)].
- Can’t take money from PACs, parties, other candidate committees, or people who don’t live in South Dakota [Section 51(2); “qualified contribution” defined Section 3(5)].
- Can’t take contributions larger than $250 [Section 51(2); “qualified contribution” defined Section 3(5)].
- Can’t use Democracy Credits to contribute to other candidates, parties, or committees [Section 51(3)].
- Can’t collect Democracy Credits before collecting at least 25 qualified contributions of at least $10 each [Section 53].
I spent none of my own money on my District 3 race, but the other conditions would knock out about 44% (about $9,100) of the money I raised to run this year. Those conditions would have blocked 91% (almost $25,000) of the contributions my Republican opponent Al Novstrup reports on his pre-general 2016 campaign finance report. I might give up $9,100 for a shot at $15,000 in Democracy Credits, but there’s no way Novstrup would give up $25K in PAC and party money for $15K in public campaign finance.
So assume that maybe half of the 2018 legislative candidates would accept the conditions to receive Democracy Credits. At most, they would claim $1.575 million in public campaign finance, and that’s only if every one of those candidates has the hustle to get 300 people to each hand over one of their two $50 Democracy Credits (or 150 people to hand over both).
Whether candidates and voters opt to redeem the Democracy Credits, Governor Daugaard can still holler that IM 22 carves $4.9 million out of the general fund. But the only guaranteed use of that money is to fund the new state ethics commission that he’s supposed to be appointing. I suspect the Governor is hollering and Republican legislators are suing less because they’re worried about candidates seeking Democracy Credits and more about giving an independent ethics commission the resources it needs to investigate corruption in state government and campaign finance.
Related Reading: KELO Radio’s “Token Liberal” Todd Epp says the Governor’s recalcitrance on IM22 runs counter to the “drain the swamp” impulse that South Dakota voters signaled:
The people (including some Republicans who voted for IM 22) have spoken. Let the measure play out in practice and in the courts before rejecting it or tinkering with it.
Republican opposition to IM 22 is proof positive that the citizens need to exercise more oversight over their government. IM 22, imperfect as it is, starts to give them those tools [Todd Epp, “GOP Reaction to IM22 Proof Reform Measure is Necessary,” KELO Radio, 2016.12.07].
Say, Section 42 of IM22 allows “voluntary donations made directly to the democracy credit fund.” Hmm… so suppose we could get George Soros and Donald Trump to each kick in a few million dollars to fund our ethics commission. The Governor couldn’t say no then, could he?