Commentary

Maryland Should Beware False Promise of Taxpayer Funding

By Patrick Basham and Martin Zelder
This article originally appeared in The Baltimore Sun on March 9, 2004.
A new Maryland bill that targets rising campaign spending will hit political competition instead. If the bill becomes law, Maryland will find itself on the cutting edge of the national experiment to restructure campaign finance through the taxpayer financing of political candidates. So far, the results don’t look good.

The proposal for taxpayer financing of Maryland state legislative candidates who voluntarily agree to limit what they spend is modeled on Maine. While enhanced electoral competition was predicted as a result of these reforms, the evidence for Maine implies the opposite.

Rather than making incumbents more vulnerable to challenges, the Maine Clean Election Act (MCEA) helped to entrench incumbents, diminishing electoral competition. Based on Maine’s experience, Maryland should be extremely skeptical of public financing of campaigns.

On Nov. 5, 1996, Maine voters passed the MCEA by ballot initiative. That was the first piece of state or federal legislation to offer taxpayer financing to state-level candidates who voluntarily accept spending limits and refuse private contributions.

The legislation applied to state Senate and House candidates beginning with the 2000 primary and general election campaigns. November 2000 voting was the first test of this new campaign finance system, and the Maine Legislature sworn in on Dec. 6, 2000, made up the first set of elected officials chosen under this system.

Our analysis of the results of the 1998 and 2000 Maine state elections shows that the adoption of taxpayer financing for the 2000 election did not result in a substantially more competitive election than occurred under private funding in 1998. Comparisons of districts that had so-called clean (taxpayer-financed) candidates in 2000 with those that did not indicates that the clean districts displayed no improvement on two of three dimensions of electoral competitiveness and actually performed worse on a third.

Our analysis of the 2000 Maine election supports the following conclusions:

  • The overall average margin of victory in both Senate and House races declined by an insignificant margin.

  • Races in open seats that featured taxpayer-financed candidates do not clearly show that taxpayer financing leads to more competitive elections.

  • Despite limits on campaign spending by incumbents, the advantages of holding office were almost impossible to overcome.

    Most victorious taxpayer-financed candidates were incumbents, and nearly all incumbent taxpayer-financed candidates retained their seats. The limits on House incumbent spending under taxpayer financing did not reduce their margins of victory. A comparison of the average margin of victory of the taxpayer-financed House incumbents in 2000 and those same incumbents’ average margin of victory in 1998 found no statistically significant improvement in competitiveness.

  • Term limits were relatively effective at opening the state’s electoral process to greater competition. Newly competitive seats benefited more from the introduction of term limits than from the introduction of taxpayer financing.

  • Under a system of taxpayer financing, the number of contested primaries rose only marginally from 1998 and remained well below the level of prior, privately funded elections.

  • The lure of subsidized campaigning did not attract a substantial number of independent and minor party candidates.

The Maine model offers few benefits for a scheme largely funded by taxpayers. Maine’s lesson for Maryland is that a government trying to foster more competitive elections through taxpayer financing will be disappointed with the results, while taxpayers will be discomforted by the multimillion-dollar cost.

Patrick Basham is senior fellow in the Center for Representative Government at the Cato Institute. Martin Zelder is a University of Chicago economist.