The second-day story from New York City’s primaries last week could have been the exceptional performance of the city’s unique system of small-donor public financing. By providing a six-dollar public match for every dollar raised in contributions of $175 or less, the system enabled the little-known Scott Stringer to compete with and defeat Eliot Spitzer’s family fortune in the race for Comptroller. On the Republican side, it helped mayoral nominee Joe Lhota, who received almost half his total spending in public money, to overcome another self-financed millionaire. The top three Democratic candidates for mayor finished in reverse order of the amount of private money they had raised, and as Alec MacGillis noted here, public financing allowed the eventual nominee, Bill de Blasio, to resist the policy preferences of big donors, such as opposition to paid sick leave. Dozens of city council and other races featured three or more candidates with enough money to compete. But instead of celebrating a system that finally emerged from the shadows of Michael Bloomberg’s personal spending to show its value, we’ve had handwringing about the rise of “outside money,” or spending by groups other than the candidates and parties, in New York City politics. Jim Dwyer in The New York Times argued that outside spending was “reshaping” city politics, focusing on three independent committees: one that promoted “Anybody But [Christine] Quinn,” based on the City Council speaker’s refusal to block horse carriages from Central Park; a tiny committee formed to support Lhota, with contributions solely from David and Julia Koch; and Jobs for New York, the biggest outside spender, a front for the real estate industry.
The rise of outside money in New York campaigns is indeed a concern, and could ultimately undermine the public-financing system, which is finally gaining recognition as a model for reform at the state and federal level that puts a higher priority on encouraging small donors than restricting big ones, and that seems likely to withstand constitutional challenge.
But let’s put this new spending in perspective. Thanks to the city’s excellent disclosure requirements, we know that about $12.7 million was spent by independent groups in the primaries, with almost $5 million of that total coming from Jobs for New York, the real estate group. A total of $105 million, in public and private money combined, was spent by candidates themselves, the vast majority of whom were abiding by voluntary spending limits. That is, about one dollar in ten came through an outside group. By contrast, in the 2012 U.S. Senate races, outside groups spent about half as much as candidates, even though none of the candidates were subject to spending limits, and a study by the Campaign Finance Institute shortly after the election indicated that in contested House and Senate races – those decided by 55% or less — outside groups spent about the same amount as candidates. In some state-level elections, such as in North Carolina, outside spending exceeds the amounts spent by candidates.
There’s also no indication in New York City that candidates or their operatives were using outside groups to boost or reinforce their own campaigns. That, too, is different from the federal level, where organizations such as Priorities USA, American Crossroads, or Restore Our Future were tacitly operating as agents of the Obama, Romney or Gingrich campaigns. Similar vehicles pulled many Senate and some House candidates. The New York spenders are actual outsiders, which means their advertisements and brochures were often messy and off-message. (You can watch any of the “Anybody But Quinn” ads on the site of the New York City Campaign Finance Board if you want to see what I mean.)