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Gosch Proposes Unworkable, Unconstitutional Limit on Out-of-State Money for Ballot Question Committees

Representative Spencer Gosch (R-23/Glenham) has roused 18 Republican colleagues to co-sponsor a poorly worded, unworkable, and unconstitutional restriction on out-of-state campaign contributions to ballot question committees.

House Bill 1074 would add this language to our campaign finance laws:

No ballot question committee may accept from any person, organization, political committee, or political party that is not a resident of this state contributions that equal more than seventy-five percent of the total contributions the ballot question committee accepts from a person, organization, political committee, or political party that is a resident of this state [HB 1074, introduced 2017.01.23].

Poorly worded: I know of no legal definition in South Dakota law that applies the concept of “residency” to political committees and organizations.

Unworkable: Suppose it’s March 31 and I’m launching ballot question committee to refer all of Spencer Gosch’s hare-brained ideas (I count three so far in his list of sponsored bills) to a public vote. At 12:00 p.m., my committee receives via my online fundraising page its first contribution, a $1,000 from a friend in Minneapolis. At 12:01 p.m., I receive my second contribution, $2,000 from a friend in Sioux Falls.

Would that sequence put my Minnesota donor and me in violation of HB 1074? Do I have to refund every out-of-state contribution (or some constantly changing fraction thereof) that my ballot question committee receives and ask those out-of-state donors to resubmit their contributions when my in-state tally has climbed to a certain amount? Would ballot question committees need to post a constant running tally of in-state contributions, multiply by 75%, and tell out-of-state allies they can only donate that much today, but maybe more tomorrow? Or does Representative Gosch only going to check the pre-general and year-end campaign finance reports to make sure the out-of-state/in-state dollar ratio is less than 3/4 on those two specific dates?

Unconstitutional: HB 1074 will not withstand First Amendment scrutiny. South Dakota cannot impose a restriction on political speech (alas, yes, money is speech) that applies to residents of some states and not others. If my Sioux Falls friend can give my ballot question committee unlimited contributions (and that’s what current statute allows), so can my Minnesota friend.

If Representative Gosch really wants to limit the ability of rich out-of-staters like Rod Aycox and Henry T. Nicholas to buy their way onto our ballot and clutter our airwaves with crappy initiated measures, he should drop his sloppy HB 1074 and sign on to Senate Bill 54, Secretary of State Shantel Krebs’s proposal to repeal portions of IM 22 and replace it with new campaign finance reforms. Secretary Krebs scratches Gosch’s itch with Section 35:

If the contributor is a person or entity, no ballot question committee may accept any contribution that in the aggregate exceeds ten thousand dollars during any calendar year. Notwithstanding any other law, no person or entity may contribute more than ten thousand dollars to any ballot question committee. A ballot question committee shall return within ten days to a contributor any contribution that exceeds the contribution limits provided under chapter 12-27. A violation of this section is a Class 1 misdemeanor [SB 54 Section 35, introduced 2017.01.11].

Under HB 1074, a donor in Minnesota wouldn’t know if she can give $100,000, $224.33, or nothing to a South Dakota ballot question committee on any given day, or whether she could write another check tomorrow. Under SB 54, that generous donor would know she’s done at $10K, no matter what day she writes that check.

SB 54 treats Minnesota donors the same as South Dakota donors, avoiding HB 1074’s Constitutional trouble.

As a bonus, SB 54 also lays out who gets in trouble for exceeding the limit (the ballot question committee, not the donor) and makes clear the punishment. HB 1074 doesn’t define the perp or the penalty (laws need teeth, Spencer!).

We can cap campaign contributions, but the First Amendment says we have to do so equally, without discriminating against Minnesotans. Let’s avoid a lawsuit, kill HB 1074, and turn the Legislature’s attention to SB 54.


  1. Donald Pay 2017-01-24

    Cory is right. If you want to affect change regarding the out-of-state money in initiatives, referendums and/or candidate campaigns you are going to have to change the Supreme Court. You will have to get rid of the rightwing Justices who think that money is speech.

  2. Jerry Sweeney 2017-01-24

    I swan, the Republican complaints about ‘out-of-state influences’ are reminiscent of the bloviating that emerged in the former states of the Confederacy in the early days of the struggle for civil rights. What’s next, the governor holding forth in the Capitol lobby: Cloistered now, cloistered tomorrow, cloistered forever.

  3. Porter Lansing 2017-01-24

    What’s more oppressive than “out of state money” helping the minority party? Why, that would be “out of state money” helping the majority party. There’s more of ’em.

  4. Roger Elgersma 2017-01-24

    One ballot issue could have a much larger donation than another. This is not equal rights. Would Thune have an eleven million war chest if this was applied to campaign contributions.

  5. Porter Lansing 2017-01-24

    Wonder with me, now. Why does Pat Powers blog over and over and over drill into you the fear of “out of state” interests? Why do ideas from elsewhere get treated like dog dumps? Why? Well good folks, here’s why. It’s a political tactic to divert your attention from the real danger. And the Pierre majority knows in their hearts that the real danger is them. It’s them limiting your choices and limiting your power, only to have more power for themselves and their selfish desires. Reject the limits. Reject those disguised as your friends and public servants. Reject the attempts to lead you by the ring they want pierced through your noses.

  6. Jana 2017-01-24

    The hallmark of this legislature is to frantically hold on to their power and ignore the citizens of the state. How proud they must be.

  7. caheidelberger Post author | 2017-01-24

    Spencer Gosch didn’t mind taking a $500 contribution from a Minnesotan for his primary campaign. That’s compared to $2,150 in in-state individual contributions… $1,250 of that is unitemized, so we don’t know where that money came from…

    …which makes me realize another problem in Gosch’s bill! Ballot question committees don’t have to itemize contributions of $100 or less. So if a ballot question committee leverages some Bernie Sanders power and draws a whole bunch of small contributions from around the country, we will have no way of determining from the campaign finance reports whether a ballot question committee has really violated Gosch’s 75% rule.

    Friends don’t let rookie Republicans write campaign finance legislation.

  8. grudznick 2017-01-24

    No out of state voters, no out of state money. It’s our state. Stay out.

  9. Tim 2017-01-24

    grudz, there is a rumor going around that you actually live in Florida and have never been to South Dakota, is this true or just another right wing lie?

  10. grudznick 2017-01-24

    It depends, Mr. Tim, is the rumor whispered by interns, posted on blogs, or shared over free drinks paid for with vast lobbyist dollars?

  11. scott 2017-01-24

    Do not try and stop this out of state money from coming into South Dakota. Instead create a new tax on political advertising. I would suggest a 10% tax on any advertising for all statewide office, referendums and initiated measures. Further, I would impose a 20% tax on political advertising for Presidential, US Senate, and US House of Representative elections. The new tax money could be used to cover the cost of maintaining and upgrading voting equipment.

    Let’s use our heads and capitalize on this out of state money coming into SD.

  12. caheidelberger Post author | 2017-01-24

    Now you’re thinking, Scott! Get some good out of all the rich folks’ propaganda! Capture wealth where it is!

    I also like your targeting of the money toward electoral services. If folks are going to use money to sway our elections, at least some of that money should go to objectively improve our elections… and hey! everybody interested in ballot measures should be interested in making sure our voting equipment works as well as possible to ensure all votes are counted.

    And if we have any money left from the political ad tax, maybe we could fund a state ethics committee!

Comments are closed.