Campaign Finance Reform: Experiences of Two States That Offered Full Public Funding for Political Candidates
Published: 2010-05-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The 2000 elections in Maine and Arizona were the first in the nation's history where candidates seeking state legislative seats had the option to fully fund their campaigns with public moneys. In 2003, GAO reviewed the public financing programs in Maine and Arizona and found the programs' goals were to (1) increase electoral competition; (2) increase voter choice; (3) curb increases in campaign costs; (4) reduce interest group influence; and (5) increase voter participation. GAO reported that while the number of candidates who participated in the programs increased from 2000 to 2002, it was too soon to determine the extent to which these five goals of the programs were being met. Senate Report 110-129 directed GAO to update its 2003 report. This report: (1) provides data on candidate participation and (2) describes changes in five goals of Maine's and Arizona's programs in the 2000 through 2008 elections and the extent to which changes could be attributed to the programs. To address its objectives, GAO analyzed available data about candidate participation, election outcomes, and campaign spending for the 1996 through 2008 legislative elections in both states, reviewed studies, and interviewed 22 candidates and 10 interest group officials selected to reflect a range of views. The interview results are not generalizable to all candidates or all interest groups. GAO is issuing an electronic supplement with this report--GAO-10-391SP--which provides data and summaries of statistical analyses conducted.
section_title: What GAO Found
paragraphs: In Maine and Arizona, legislative candidates' participation in the public financing programs, as measured by the percentage of candidates participating and the proportion of races with a participating candidate, increased from 2000 to 2008. Specifically, the participation rate of candidates in Maine's general elections increased from 33 percent in 2000 to over 80 percent in 2006 and 2008. Meanwhile, the participation rate of candidates in Arizona's general elections increased from 26 percent in 2000 to 64 percent in 2008. Also, the proportion of races with at least one candidate participating in the program generally increased from 2000 through 2008. While there was some evidence of statistically significant changes in one of the five goals of Maine's and Arizona's public financing programs, we could not directly attribute these changes to the programs, nor did we find significant changes in the remaining four goals after program implementation. Specifically, there were statistically significant decreases in one measure of electoral competition--the winner's margin of victory--in legislative races in both states. However, GAO could not directly attribute these decreases to the programs due to other factors, such as the popularity of candidates, which affect electoral outcomes. We found no change in two other measures of competition, and there were no observed changes in voter choice--the average number of legislative candidates per district race. In Maine, decreases in average candidate spending in House races were statistically significant, but a state official said this was likely due to reductions in the amounts given to participating candidates in 2008, while average spending in Maine Senate races did not change. In Arizona, average spending has increased in the five elections under the program. There is no indication the programs decreased perceived interest group influence, although some candidates and interest group officials GAO interviewed said campaign tactics changed, such as the timing of campaign spending. Data limitations, including a lack of comparable measures over time, hinder analysis of changes in voter participation.

section_title: Letter
paragraphs: Public financing of political campaigns is a controversial issue that is  viewed by supporters as a means of reducing the influence of money in  politics while increasing the involvement of citizens in the political  process and seen by opponents as a violation of free speech as well as a  misuse of public funds. While public financing of political campaigns at  the federal level applies only to presidential elections, some states have  taken actions to implement programs to offer public financing intended to  fund most campaign costs of candidates for certain state-level political  campaigns. The 2000 elections in Maine and Arizona were the first  instances in the nation’s history where candidates seeking state legislative  seats and certain statewide offices had the option to fully fund their  campaigns with public moneys. Under the public financing programs in  Maine and Arizona, “participating candidates” qualified for public  financing and received a set amount of money for their primary and  general election campaigns if they agreed to forgo private fundraising and  obtained a minimum number of $5 donations from individual donors. In  addition to their initial distribution of funds, participating candidates  received matching funds from public moneys, based on spending by  opposing privately financed (“nonparticipating”) candidates, who engaged  in traditional means, such as conducting fundraisers, to raise money from  individuals, corporations, and political action committees. Participating  candidates also received matching funds based on an individual’s or  group’s reported independent expenditures, which are expenditures made  that benefit an opposing candidate, but without coordination with the  benefiting candidate.
In 2003, we reviewed the public financing programs in Maine and Arizona  as mandated in the Bipartisan Campaign Reform Act of 2002. In our 2003  report, we identified five overarching goals of Maine’s and Arizona’s public  financing programs based on our review of the history of the programs  and discussions with officials in each state. Generally, these goals were to  (1) increase electoral competition by, among other means, reducing the  number of uncontested races (i.e., races with only one candidate per seat  in contention); (2) increase voter choice by encouraging more candidates  to run for office; (3) curb increases in the cost of campaigns; (4) reduce  the influence of interest groups and, thereby, enhance citizens’ confidence  in government; and (5) increase voter participation (e.g., increase voter  turnout for elections).
In 2003, we reported that while the number of legislative candidates who  chose to use public financing for their campaigns increased from 2000 to  2002, it was too soon to determine the extent to which the five goals of  Maine’s and Arizona’s public financing programs were being met. We  concluded that with only two elections from which to observe legislative  races, limited data were available to draw causal linkages to changes, if  any, involving electoral competition, voter choice, campaign spending,  interest group influence and citizens’ confidence in government, and voter  participation.
Senate Report 110-129 directed GAO to revisit and update our 2003 report  to account for data and experiences of the past two election cycles. This  report    provides data related to candidate program participation, including the  number of legislative candidates who chose to use public funds to run  for seats in the 2000 through 2008 elections in Maine and Arizona and  the number of races in which at least one legislative candidate ran an  election campaign with public funds; and    describes statistically measurable changes and perceptions of changes  in the 2000 through 2008 state legislative elections in five goals of  Maine’s and Arizona’s public financing programs—(1) increasing  electoral competition; (2) increasing voter choice; (3) curbing  increases in the cost of campaigns; (4) reducing the influence of  interest groups and enhance citizens’ confidence in government; and  (5) increasing voter participation—and the extent to which these  changes could be attributed to the programs.
To address our objectives, we reviewed relevant studies and reports and  interviewed researchers regarding state elections and campaign finance  reform in the United States generally, as well as in Maine and Arizona  specifically. A listing of the research and reports we reviewed is included  in the bibliography. We reviewed pertinent statutes and documents, such  as candidate handbooks and annual reports describing the Maine and  Arizona public financing programs and interviewed state election officials  responsible for administering the two programs. Through our discussions  with Maine and Arizona state officials and our review of changes to the  public financing statutes in both states from 2002 through 2009, we  determined that the five goals of the public financing programs, as set out  in our 2003 report, have not changed. In addition, based on our review of  the literature and discussions with researchers, we concluded that there is  little agreement on a standardized methodology to measure these five  goals. Thus, we used many of the same measures as those in our 2003  report.
We obtained data from Maine’s and Arizona’s Offices of the Secretary of  State, the agencies responsible for supervising and administering state  elections and activities, such as certifying state candidates for the ballot  and tabulating official election results. We also obtained data from Maine’s  Commission on Governmental Ethics and Election Practices and Arizona’s  Citizens Clean Elections Commission, the agencies responsible for  administering the respective state’s public financing program. For both  states we analyzed, to the extent possible, available statistical data about  the 1996 through 2008 legislative elections, including data related to  candidate program participation, election outcomes, voter choice, and  reported campaign spending. To assess the reliability of both states’ data,  we (1) performed electronic testing for obvious errors in accuracy and  completeness; (2) reviewed related documentation such as system flow  charts; and (3) worked closely with state officials to identify any data  problems. When we found discrepancies, such as nonpopulated fields, we  brought this to the states’ attention and worked with state officials to  correct the discrepancies before conducting our analyses. We determined  that the data were sufficiently reliable for the purposes of our report.  Although the public financing programs in Maine and Arizona cover both  legislative and certain statewide offices, we limited the scope of our  review to legislative candidates, since most of the elections for certain  statewide offices occurred every 4 years and sufficient data would not  have been available to conduct our analyses and draw conclusions.
To assess changes in electoral competition in Maine and Arizona, we  examined changes in three measures of electoral competition in state  legislative races by comparing the two elections before public financing  became available (1996 and 1998) to the five elections after public  financing became available (2000, 2002, 2004, 2006, and 2008). The three  measures we used were: (1) winner’s margin of victory, which refers to the  difference between the percentage of the vote going to the winning  candidate and the first runner up; (2) percentages of contested races,  which refers to the percentage of all races with at least one more  candidate running than the number of positions available; and (3)  incumbent reelection rates, which refers to the percentage of incumbents  who were reelected in races that were contested.
In addition to analyzing changes in electoral competition over time in  Maine and Arizona, we analyzed general election data from 1996 through  2008 from four comparison states that did not offer public financing  programs for legislative candidates to determine if changes identified in  Maine and Arizona were similar to or different from changes observed in  the four comparison states during the same time period. We selected these  four states (Colorado, Connecticut, Montana, and South Dakota) based on  a number of factors, including geographic proximity to Maine or Arizona;  structure of the state legislature, such as legislative districts with more  than one representative; demographic characteristics; the presence of  legislative term limits; and data availability. Specifically, we used two  types of multivariate statistical models, fixed effects regression and  hierarchical loglinear models, to evaluate how the competitiveness of  races in Maine and Arizona changed after the implementation of public  financing programs. Additional information about the two types of  models we used to evaluate electoral competition, as well as other data  and analyses related to the extent to which five goals of Maine’s and  Arizona’s public financing programs were met can be viewed in an  electronic supplement we are issuing concurrent with this report— GAO-10-391SP.
With regard to the campaign spending goal, we obtained available  campaign spending and independent expenditure data from Maine and  Arizona. We found that Maine’s campaign spending data for the 1996  through 2008 election cycles and independent expenditure data for the  2000 through 2008 election cycles were sufficiently reliable. Due, in part,  to several upgrades to Arizona’s campaign finance data systems over the  time period reviewed, we found that Arizona’s campaign spending data for  the 2000 through 2008 election cycles and independent expenditure data  for the 2008 election cycle were sufficiently reliable with limitations as  noted. For example, up to the 2008 election, Arizona’s campaign spending  database did not include precise data to identify and link each candidate  to his or her campaign finance committee(s), the entities responsible for  reporting candidates’ contributions and spending. Further, the  candidates’ campaign finance committees can span several election cycles  and include spending reports for races for the same or different offices,  such as House or Senate. Thus, to the extent possible, we matched  candidates and candidate campaign finance committees through  electronic and manual means, identified and calculated relevant candidate  spending transactions, and sorted the data by election cycle dates.  Further, although the Arizona Secretary of State’s office collected  independent expenditure data from 2000 through 2008, it did not collect  data on the intended beneficiaries of independent expenditures until the  2008 election cycle. Therefore, we limited our analysis of independent  expenditures to the 2008 elections. We worked with state officials  responsible for the public financing programs and campaign finance data  systems in Maine and Arizona to develop our methodology.
To obtain perspectives on the effects of public financing on interest group  influence and citizens’ confidence in government, we interviewed a  nonprobability sample of 22 candidates who ran in the 2008 state  legislative races in Maine and Arizona. We selected these candidates to  reflect a range of those with different political party affiliations, those who  did and did not use public financing, and those who won or lost in primary  and general elections in Maine and Arizona. Further, we interviewed a  nonprobability sample of 10 interest group representatives in Maine and  Arizona, which we selected to reflect a variety of industry sectors, such as  communications or construction, and range of contributions made to  political campaigns. While the results of these interviews cannot be  generalized to reflect the views of all candidates or all interest groups in  Maine and Arizona, the interviews provided us with an overview of the  range of perspectives on the effects of the public financing programs. We  also contracted with professional pollsters to survey representative  samples of voting-age citizens in Maine and Arizona about their views of  interest group influence and confidence in government.
To examine changes in voter participation, we reviewed information about  voter turnout data from the Census Bureau, Federal Election Commission,  United States Election Assistance Commission (EAC), the American  National Election Studies, and other resources, including two repositories  of elections data and information—George Mason University’s United  States Election Project (the Elections Project) and the Center for the  Study of the American Electorate. We identified these sources through  our review of the literature and through discussions with researchers. To  determine the extent to which changes in voter participation could be  assessed over time, we reviewed documentation and research on these  potential data sources, including information on collection and  measurement of the voting-age or voting-eligible population and the type  of turnout recorded. Finally, we examined data and methodologies for  measuring changes in voter turnout and other forms of participation to  determine whether changes in participation could be analyzed at the state  level. We found that the different data sources required to calculate  changes in turnout are not always comparable across sources and over  time because of differences in the way that data are collected or changes  in how turnout is defined. As such, there was no need to conduct  electronic testing to further assess the reliability of the data for our  purposes. This does not indicate that the data are unreliable for other  purposes. We also discussed voter turnout calculations with state officials  and researchers. Appendix I presents more details about our objectives,  scope, and methodology.
We conducted this performance audit from November 2008 through May  2010 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Public Financing Programs in Maine and Arizona
paragraphs: In November 1996, Maine voters approved a citizen’s initiative—the Maine  Clean Election Act (Maine’s Act)—establishing a full public financing  program to fund with public moneys the campaigns of participating  candidates for the state legislature and governor. Similarly, in November  1998, Arizona voters passed the Citizens Clean Elections Act (Arizona’s  Act), establishing a full public financing program for participating  candidates for the state legislature and various statewide offices, such as  governor or secretary of state. Maine’s Commission on Governmental  Ethics and Election Practices and Arizona’s Citizens Clean Elections  Commission administer the respective state’s public financing program,  including certifying that candidates have met qualifications for receiving  public funds.
Legislative candidates who wish to participate in the respective public  financing programs must be certified as a participating candidate. Certified  candidates, among other things must (1) forgo self-financing and all  private contributions, except for a limited amount of “seed money” prior  to certification, and (2) demonstrate citizen support by collecting a  minimum number of $5 contributions from registered voters. After being  certified by the state as having met qualifying requirements, participating  candidates receive initial distributions (predetermined amounts) of public  funding and are also eligible for additional matching funds from public  moneys based on spending by or for privately funded opponents. These  matching funds, up to predetermined limits, are given to participating  candidates when an opposing nonparticipating candidate exceeds the  initial distribution of funds provided to the participating candidate during  the primary or general election. Table 1 shows the public funding  available to each participating candidate in the 2008 election cycle in  Maine and Arizona. The calculation to assess whether matching funds for  participating candidates are triggered is to include reported independent  expenditures that, in general, are made on behalf of a nonparticipating or  another participating candidate in the race by individuals, corporations,  political action committees, or other groups.
Various revenue sources are used to support the public financing  programs. In Maine, state appropriations were the largest funding source,  contributing 82 percent of total revenue in 2008. In Arizona, a surcharge on  civil and criminal fines and penalties was the largest funding source,  accounting for 59 percent of total revenue in 2008. In addition, funding for  public financing programs comes from state income tax checkoff  donations in both states. During the 2008 primary and general elections,  participating legislative candidates in Maine received a total of almost $3  million, and participating legislative candidates in Arizona received a total  of about $6 million.
Before the passage of Maine’s Act in 1996 and Arizona’s Act in 1998,  political campaigns in the two states were financed completely with  private funds. There were no limitations placed on expenditures by  candidates from their personal wealth. Under Maine’s and Arizona’s public  financing laws, nonparticipating candidates are not limited in the amount  they may spend from their personal financial resources on their own  campaigns. While not faced with limits on the total amount of money that  they can raise or spend, nonparticipating candidates are subject to certain  limitations on the amount that an individual, corporation, or political  committee can contribute to the campaigns of nonparticipating  candidates, and nonparticipating candidates have additional reporting  requirements. For example, in Maine, a nonparticipating candidate in the  2008 legislative elections could accept individual contributions of up to  $250 per election, and in Arizona, a nonparticipating candidate could  accept individual contributions of up to $488 per election. In both states,  nonparticipating candidates must file certain reports with the state when  their campaigns exceed certain statutory thresholds relating to, for  example, expenditures or contributions. Appendix II provides  information about the design and implementation of Maine’s and Arizona’s  public financing programs.
section_title: Perspectives on the Five Goals of Public Financing Programs in Maine and Arizona
paragraphs: While there is widespread agreement among researchers and state officials  in Maine and Arizona with the goals of the public financing programs,  there is little consensus about how to assess progress toward these goals  and the effects of these programs. For example, research on the effects of  state public financing programs in general has been limited because the  programs vary widely and were implemented at different times, hindering  comparability. With regard to Maine’s and Arizona’s public financing  programs, research tends to be limited to a single state or a limited  number of years, or produced by groups that support or oppose public  financing. Thus, in revisiting our 2003 report, we describe the five goals  of the public financing programs and include a discussion of proponents’  and opponents’ views on the effects of these programs.
subsections: section_title: Increase Electoral Competition
paragraphs: One goal of the public financing programs in Maine and Arizona was to  increase electoral competition, which refers to the level of competition for  elected positions as demonstrated by whether races were contested (that  is, involved more candidates than available positions) and by the  percentage of the vote candidates received. For example, levels of  electoral competition can vary from none at all in the case of an  uncontested race, in which the sole candidate receives 100 percent of the  vote (less any write-in votes), to an election in which several candidates  vie competitively for a position, each winning a significant portion of the  votes. Proponents of public financing for campaigns contended that public  funding could increase electoral competition by allowing candidates,  especially candidates challenging incumbents, to overcome the financial  hurdles that would otherwise prevent them from entering a race. Further,  proponents argued that public financing promotes competition by giving  more candidates the opportunity to effectively communicate with the  electorate once they have entered the race. Additionally, some proponents  asserted that increasing the pool of challengers would also increase the  diversity of the candidate pool and consequently make some races more  competitive by offering candidates that appeal to a broader range of  voters. On the other hand, opponents asserted that public financing does  not necessarily attract candidates who have a broad base of constituency  support and therefore, even though more new candidates may enter races  and win, the quality of representation these candidates offer may be  questionable.
section_title: Increase Voter Choice
paragraphs: Increasing voter choice, as measured by changes in the number of  candidates per race and changes in the breadth of political party  affiliations, such as third-party and independent candidates, represented in  races, was a goal of public financing programs. Proponents of the public  financing programs in Maine and Arizona contended that public funding of  campaigns would encourage more individuals to run for office, thereby  giving voters more choices on the ballot. Opponents asserted that an  increase in the number of candidates on the ballot alone would not  necessarily result in a more diverse selection of candidates, representation  of a wider range of political views, or the guarantee that a broader array of  issues would be debated in campaigns.
section_title: Curb Increases in the Cost of Campaigns
paragraphs: The public financing programs in Maine and Arizona each were designed  to have a two-pronged approach for the third goal—curbing increases in  the costs of campaign spending. Each program  imposed spending limits and certain other requirements on candidates  who chose to participate in the public financing program, and  reduced the total amount of money that nonparticipating candidates  were allowed to accept from each campaign contributor.
Proponents of the public financing programs in Maine and Arizona  contended that escalating campaign costs helped deter candidates from  running for office. The intended outcome of this approach was to lower  the cost of running for office by reducing and capping the amount of  money available for campaign spending. Opponents argued that worthy  candidates will garner public support and therefore do not need public  financing to run their campaigns. Opponents also cited concerns that  rising campaign costs are overstated and that most campaign fundraising  comes from individuals who give less than the legal limit.
section_title: Reduce the Influence of Interest Groups
paragraphs: A fourth goal of the public financing programs in Maine and Arizona was  to enhance the confidence of citizens in government by reducing the  influence of interest groups in the political process. The public financing  programs in Maine and Arizona imposed campaign contribution limits on  participating candidates and reduced the need for participating candidates  to raise funds from private donors, such as interest groups, with the intent  of eliminating any undue influence, or the perception of influence, large  campaign contributors may have on participating candidates. For instance,  the “findings and declarations” section of Arizona’s 1998 Act stated, among  other things, that the then current election-financing system “effectively  suppresses the voices and influence of the vast majority of Arizona  citizens in favor of a small number of wealthy special interests” and  “undermines public confidence in the integrity of public officials.” From an  overall perspective, proponents asserted that public financing programs  should enhance the confidence of citizens in government by increasing the  integrity of the political process and the accountability of officials.
On the other hand, opponents asserted that, under the traditional  campaign financing system, the voices of citizens are represented through  competing interest groups. Opponents further asserted there is no  evidence that government-financed campaigns attract more worthy  candidates than do the traditional system or that, once elected, the  publicly financed candidates vote any differently as legislators than do  traditionally financed candidates. Moreover, some opponents argued that  interest groups can still assert influence on the political process through  means other than contributing directly to candidates’ political campaigns,  such as contributions to political parties, independent expenditures on  behalf of or for opposing candidates, as well as providing nonfinancial  resources such as mobilizing members to volunteer for grassroots  activities.
section_title: Increase Voter Participation
paragraphs: Increasing voter participation, as indicated by increases in voter turnout,  was the fifth goal of public financing programs in Maine and Arizona.  Proponents asserted that public financing increases voter participation by  encouraging citizens to become involved in the political process and by  increasing electoral competition. Proponents contended that the public  financing programs increase communication between candidates and  voters and encourage participating candidates or volunteers to go door-to- door to meet with voters and to collect $5 qualifying contributions. As a  result, citizens would feel more involved in the political process and would  be more likely to vote in legislative elections. Further, proponents argued  that increased competition resulting from public financing would also  increase voter turnout because more voters would be attracted by a more  diverse set of candidates. Opponents stated that research on public  financing programs and their effect on voter turnout is limited or  anecdotal, and there is no evidence that citizens will become more  engaged in the political process and be more likely to vote. Further,  opponents cited the declining number of taxpayers who voluntarily  provide contributions to the presidential and state public financing  programs on their income tax forms as a reflection of the public’s waning  participation and support.
section_title: Other States with Public Financing Programs
paragraphs: Since the 1970s, states and localities have offered a variety of programs  providing public funds directly to candidates’ campaigns for statewide and  legislative races. A July 2009 Congressional Research Service report  identified 16 states offering direct public funding to candidates using two  major types of public financing frameworks. According to this report, 10  of these states offered public financing programs that were primarily  designed to match candidates’ private campaign contributions, thereby  reducing the need for private fundraising. These programs varied widely,  but generally the amount of public funds candidates received in this type  of program depended on the amount the candidates raised and provided  partial funding for candidates’ campaigns. Seven of these 16 states,  including Maine and Arizona, offered full public financing programs for  certain offices that provided fixed subsidies to candidates once they met  basic qualifications. During the 2007 and 2008 election cycle, these 7  states offered full public financing programs for candidates running for  those statewide and legislative offices shown in table 2.
Appendix III describes full public financing programs available in the 2007  and 2008 legislative elections in the two states other than Maine and  Arizona that offer them—Connecticut and New Jersey.
section_title: Public Financing Proposals at the Federal Level
paragraphs: In nearly every session since 1956, Congress has considered legislation for  public financing of congressional elections, although no law has been  enacted. There are several bills pending in the current 111th session of  Congress addressing public financing of congressional elections. Two of  these are companion bills (H.R. 1826 and S.752) respectively addressing  elections to the House of Representatives and the Senate by proposing  voluntary public funding systems with a mix of predetermined funding  amounts, matching funds, and vouchers for the purchase of airtime on  broadcast stations for political advertisements. Two other bills propose  variations for funding House elections—H.R. 2056 proposes a voluntary  public funding system for House elections, and H.R. 158 proposes a grant  system to exclusively fully fund House campaigns during general  elections. In July 2009 the House Administration Committee held  hearings on H.R. 1826. These bills were referred to committees in 2009  and as of April 2010 were pending.
section_title: Factors Influencing Effects of Public Financing Programs and Elections
paragraphs: Many factors, such as the popularity and experience of the candidates, can  influence the competitiveness and outcomes of elections and the  interpretation of the effects of public financing programs. For example,  term limits—limits on the number of terms elected officials such as  legislators can serve—and redistricting—the redrawing of state electoral  boundaries such as those for legislative districts in response to the  decennial census—are factors that complicate the interpretation of  available data. Other factors not directly related to public or private  financing can also affect electoral campaigns and outcomes, such as  economic conditions or particularly controversial ballot initiatives.
section_title: Legislative Candidates’ Participation in Public Financing Programs in Maine and Arizona Increased from 2000 to 2008; Limited Data on Candidates Are Available
paragraphs: In Maine and Arizona, legislative candidates’ participation in the public  financing programs (measured by the percentage of candidates  participating and the proportion of races with a participating candidate)  increased from 2000 to 2008; although limited data on candidates’  characteristics are available. Specifically, Maine candidates’ participation  rates more than doubled in the primary and general elections from 2000 to  2004 and remained high through 2008 (over 70 percent); among  incumbents, the majority participated from 2002 through 2008; and more  Democrats (rather than Republicans) participated. In Maine, participating  candidates were more likely to win their races. In Arizona, candidates’  participation rates more than doubled in the primary and general elections  from 2000 to 2008, with higher percentages of challengers (rather than  incumbents) and Democrats (rather than Republicans) participating. In  Arizona, nonparticipating candidates were more likely to win their races  than were participating candidates. Other than incumbency status and  political party affiliation, states did not maintain data that would allow us  to assess candidates’ characteristics, such as their experience or  demographic characteristics.
subsections: section_title: Maine Legislative Candidates’ Participation Increased from 2000 to 2008
subsections: section_title: Maine Legislative Candidates’ Participation Rates More Than Doubled in the Primary and General Elections from 2000 to 2004 and Remained High through 2008
paragraphs: The participation rate of legislative candidates (i.e., percentage of  legislative candidates participating in the public financing program) in  Maine’s primary elections more than doubled in the first three election  cycles after public financing became available. As shown in figure 1, the  participation rate increased from 32 percent in 2000 to 72 percent in 2004  and remained over 70 percent from 2004 to 2008. Similarly, the  participation rate of legislative candidates in Maine’s general elections  more than doubled from 33 percent in 2000 to 79 percent in 2004 and then  remained over 80 percent for the 2006 and 2008 elections.
When asked the main reasons for choosing to run their campaign with or  without public funds in the 2008 election, the 11 candidates we  interviewed in Maine offered a range of reasons why they chose to  participate or not participate in the public financing program. Five of the 6  participating candidates cited difficulties associated with raising enough  private funds to run a competitive campaign. Among the difficulties  mentioned were the amount of time and energy required to fundraise, as  well as the amount of funds needed to compete with a well-financed  opponent. In addition, 4 of the 6 participating candidates said that  participating in the public financing program allowed them to spend more  time focusing on communicating with voters. For example, one candidate  said that participating in the public financing program freed him up so he  could focus on meeting with constituents and learning what issues were  important to them, rather than having to spend his time asking for money.  Further, 3 of the 6 participating candidates said that they wanted to be free  of the influence of interest groups or other campaign contributors, and 2  of these candidates felt that it was strategically advantageous to  participate in the public financing program. One of these candidates  explained that he did not want to have to spend time raising funds while  his opponent could use the time to campaign and still receive the same  amount of money. We also asked candidates about specific factors they  may have considered when choosing to run their campaign with public  funds. Table 3 presents the number of participating candidates who said  that they had considered each of the following factors when they decided  to participate in the public financing program.
The 5 nonparticipating candidates we interviewed in Maine most  frequently mentioned opposition to using public funds for election  campaigns as one of the main reasons they chose not to participate in the  public financing program in 2008. For example, 4 of the 5 nonparticipating  candidates said they were opposed to public financing of elections for a  range of reasons, including concern over the state’s fiscal situation. One  nonparticipating candidate said he chose not to participate because he did  not want restrictions on how he ran his campaign. He explained that he  had more flexibility with private funds and could donate excess campaign  funds to nonprofit organizations after the election. In addition, one  candidate told us that he was not opposed to the public financing program,  but did not participate because he did not intend to run a campaign and  anticipated that another candidate would take his place before the general  election. We also asked the 5 nonparticipating candidates if they  considered any of the factors listed in table 4 when they chose not to  participate in the public financing program; their responses appear  alongside each factor in the table.
Incumbent candidates’ participation in the public financing program in  general elections in Maine generally increased from 2000 to 2008, with the  majority of incumbent candidates participating in the program from 2002  through 2008. As shown in figure 2, participating incumbent candidates,  as a percentage of all candidates, increased from 10 percent in 2000 to 29  percent in 2008.
Further, the percentage of participating incumbents grew from 27 percent  of incumbent candidates in 2000 to 80 percent of incumbent candidates in  2008.
section_title: Participating Candidates in Maine Were Generally More Likely to Win
paragraphs: Participating incumbents and challengers in Maine’s legislative races were  generally slightly more likely to win than nonparticipating incumbents and  challengers who ran in general elections held from 2000 through 2008, as  shown in table 5.
Since 2000, more Democrats than Republicans participated in the public  financing program in Maine primary and general elections, in terms of the  proportion of candidates who participated. For example, while the rate at  which Republican legislative candidates in the primary elections  participated in the public financing program increased by about 41  percentage points from 2000 to 2008 (from 22 percent to 63 percent), the  participation rate remains below that of Democrats, whose participation  rate increased by about 48 percentage points in the primary election  during the same period (from 39 percent to 87 percent), as shown in figure  3. For both Democrats and Republicans, most of the growth in  participation rates occurred between the 2000 and 2004 legislative  elections, whereas participation rates have been relatively stable over the  past three election cycles (2004, 2006, and 2008) in both the primary and  general elections. For example, participation rates increased in the  primary elections by about 4 percentage points among Democrats (from 83  percent to 87 percent), and by 1 percentage point among Republicans  (from 62 percent to 63 percent) between the 2004 and 2008 election cycles.  In all election years, more Democrats participated in the public financing  program than Republicans did, in terms of the proportion of candidates  who participated.
section_title: Arizona Legislative Candidates’ Participation Increased from 2000 to 2008
subsections: section_title: Arizona Legislative Candidate Participation Rates More Than Doubled in the Primary and General Elections from 2000 to 2008
paragraphs: In Arizona, the participation rate of legislative candidates in primary  elections doubled after the first election cycle when public financing  became available, from 24 percent in 2000 to 50 percent in 2002. The  participation rate then steadily increased over the next three elections to  59 percent in 2008, as shown in figure 4. Similarly, the participation rate of  legislative candidates in Arizona’s general elections almost doubled after  2000, when it was 26 percent, to 49 percent in 2002, and then steadily  increased over the next three elections to 64 percent in 2008.
The 11 candidates we interviewed in Arizona offered a range of reasons  why they chose to participate or not participate in the public financing  program when asked the main reasons for choosing to run their campaign  with or without public funds in the 2008 election. Four of the 5  participating candidates we interviewed cited wanting more time to focus  on interaction with voters when asked the main reasons for choosing to  run their campaign with public funds in the 2008 elections. One of these  candidates explained that collecting the $5 contributions strengthens  candidates’ connections to voters at the grass roots level. Candidates cited  other reasons for participation. The desire to be free of the influence of  interest groups or other campaign contributors was among the reasons 3  of the 5 candidates gave for participating in the public financing program.  One candidate explained that participating candidates are not reliant on  interest groups and are only beholden to their constituents. Three  candidates said difficulties associated with raising adequate private funds  to run a competitive election campaign was one of the reasons they chose  to participate. For example, one candidate said that as a first-time  candidate, he did not know how to raise money, so without the public  financing program he would not have been able to compete against the  incumbent candidate. Two candidates said it was strategically  advantageous to participate in the public financing program. One of these  candidates told us that he decided to participate in the public financing  program because he would feel like he was funding his opponents if he  raised private funds and the participating candidates in his race received  matching funds based upon his spending. We also asked candidates about  specific factors they may have considered when choosing to run their  campaigns with public funds. Table 6 presents the number of participating  candidates who said that they had considered each of the following factors  when they decided to participate in the public financing program.
The 6 nonparticipating candidates we interviewed most frequently cited  opposition to using public funds for election campaigns as one of the main  reasons they chose to use private rather than public funds for their  campaigns. Five of the 6 nonparticipating candidates said that they were  opposed to using public funds for election campaigns for various reasons,  which included the belief that public financing program forces taxpayers  to fund candidates that they may not support, and the belief that funds  could be better spent on government services, such as healthcare for  children, or to reduce the state’s deficit. In addition, 2 candidates said  they did not participate because they did not want restrictions on how  they ran their campaigns, such as the limit on the amount of money  candidates may raise. Another candidate told us that he is opposed to the  public financing program because he does not believe that the Citizens  Clean Elections Commission should have the authority to remove  legislators from office for violating the rules of the public financing  program. Additionally, 1 nonparticipating candidate said that she did not  participate because her primary race was uncontested, so the public  financing program would provide meager resources and not enough for  her to communicate with voters. We also asked the 6 nonparticipating  candidates if they considered any of the factors listed in table 7 when they  chose not to participate in the public financing program; their responses  appear alongside each factor in the table.
Incumbent candidates’ participation in the public financing program in  general elections in Arizona increased from 2000 to 2008; however, the  majority of incumbent candidates did not participate in the program over  these five election cycles. Figure 5 shows that participating incumbent  candidates, as a percentage of all candidates, generally increased from 4  percent in 2000 to 18 percent in the 2008 general elections.
Nonparticipating legislative incumbents and challengers in Arizona were  generally more likely to win than participating incumbents and challengers  who ran in elections held from 2000 through 2008, as shown in table 8.
In Arizona primary and general legislative elections, more Democrats than  Republicans participated in the public financing program, in terms of the  proportion of candidates who participated, although, as shown in figure 6,  the participation gap between Democrats and Republicans has narrowed  since 2000. For example, the percentage of Democrats who participated in  the public financing program during the primary election increased by  about 30 percentage points (from 42 percent to 72 percent) from 2000 to  2008, while the rate of participation among Republican candidates  increased by about 41 percentage points (from 9 percent to 50 percent)  over the same period.
section_title: In Maine and Arizona, a Greater Proportion of General Election Races from 2002 through 2008 Had at Least One Publicly Financed Legislative Candidate Compared to 2000
paragraphs: The majority of general election races in both Maine and Arizona had at  least one participating candidate in 2008, and the proportion of races with  a participating candidate has generally increased from 2000 through 2008  in both states. In Maine, the proportion of races with at least one  participating candidate doubled over the five election cycles, from 47  percent in 2000 to 96 percent in 2008, as shown in figure 7. In Arizona, the  proportion of races with at least one participating candidate increased  steadily over the five election cycles from 53 percent in 2000 to 82 percent  in 2008.
section_title: Limited Data Are Available on Candidate or District Characteristics and Candidate Experience
paragraphs: Data limitations preclude providing additional information about  legislative candidates or the districts in which they ran for office. For  example, Maine and Arizona state officials did not maintain data to analyze  candidates’ experience (e.g., whether they had previously held public  office with the exception of whether a candidate was an incumbent in a  given election and political party affiliation); qualifications (e.g., education  or work experience); wealth; or demographics (e.g., sex, age, race, or  ethnicity). Additionally, data were not available to address issues specific  to individual legislative districts, such as partisan composition, local ballot  initiatives and candidates, as well as economic or demographic factors  that could affect a candidate’s participation in the public financing  programs.
section_title: Changes in One Measure of Electoral Competition Could Not Be Directly Attributed to Maine’s and Arizona’s Public Financing Programs; No Overall Changes in Voter Choice, Campaign Spending, and Interest Group Influence, While Data Limitations Hinder Analysis of Changes in Voter Participation
paragraphs: We used a variety of statistical techniques to measure changes in five goals  of public financing before and after the implementation of public financing  and found some evidence of statistically significant changes in one  measure of electoral competition. For the rest, we found either no overall  changes or data limitations precluded any analysis of changes.  Specifically, there were differences in one of the measures used for the  goal of increased electoral competition—the winners’ margin of victory  decreased—but we could not attribute these differences directly to the  public financing programs because needed data were limited or  unavailable and there are certain factors that we could not measure, such  as candidate popularity, which affect electoral outcomes. There were no  statistically significant differences observed for the other measures of  electoral competition: contestedness (number of candidates per race) and  incumbent reelection rates. For three of the remaining four goals— increasing voter choice, curbing increases in campaign spending, and  reducing the influence of interest groups and enhancing citizens’  confidence in government—the measurable differences were not  statistically significant overall. While there is no indication that the  programs have decreased interest group influence, some candidates and  interest group officials GAO interviewed said that campaign tactics have  changed. We could not measure differences for the fifth goal—increasing  voter participation—because of data limitations, including differences in  how voter turnout has been measured over time for Maine and Arizona.
subsections: section_title: Changes in One Measure of Electoral Competition— Winner’s Victory Margin— Could Not Be Directly Attributed to Public Financing Programs in Maine and Arizona, While No Significant Changes Were Observed in Two Other Measures of Electoral Competition
paragraphs: Overall, the margin of victory in legislative races decreased significantly in  both Maine and Arizona compared to their respective comparison states  after the public financing programs were implemented; however, we could  not attribute these decreases directly to the public financing programs due  to factors such as candidate popularity and changing economic conditions,  which affect electoral outcomes. On the other hand, contestedness and  incumbent reelection rates did not significantly change over time in Maine  and Arizona. The candidates and interest group representatives we  interviewed from Maine and Arizona provided various perspectives on the  effect of the public financing programs on the advantage of incumbent  candidates and the number of close races.
subsections: section_title: For Legislative Races, the Margin of Victory Decreased in Maine and Arizona, While Contestedness and Incumbent Reelection Rates Did Not Change in both States
paragraphs: Overall, winner’s margin of victory in races decreased significantly in both  Maine and Arizona as compared to their respective comparison states after  public financing was available; however, we could not attribute these  decreases to the public financing programs due to factors such as the  qualifications or experience of the candidates and Presidential and othe  top-ballot races, which could motivate certain citizens to vote, thereby  influencing electoral outcomes. We used three different measures of  margin of victory in our analyses: (1) the average margin of victory for  contested races, (2) the percentage of close races (i.e., races decided by  less than 10 percentage points), and (3) the percentage of races that were  landslides (i.e., races decided by more than 20 percentage points).
As shown in tables 9 and 10, the average margin of victory for contested  elections declined from 22 percent before public financing (1996 and 1998)  to 19 percent after public financing (from 2000 through 2008) in Maine,  and from 31 percent before public financing to 27 percent after public  financing in Arizona. These changes, decreases of about 3 percent in  Maine and 4 percent in Arizona, were statistically significantly different  from the changes in the comparison states for both Maine and Arizona,  where the average margin of victory increased about 1 percent in both the  Maine and Arizona comparison states. The adjusted differences in the  changes between Maine and Arizona and their respective comparison  states are derived from statistical models that account for other factors  that may have explained the changes, and in the case of average margin of  victory the adjusted difference is statistically significant. Our fixed effects  statistical models take into account whether elections were for the House  of Representatives or Senate, and whether the races included incumbents.  However, our results may be sensitive to our choice of comparison states.  More information on these models and our choice of states is presented in  appendix I and the e-supplement accompanying this report,  GAO-10-391SP.
We obtained similar results when we measured the margin of victory by  contrasting the percentages of close races (defined as competitive races  with a margin of victory of less than 10 percentage points) and races that  were landslides (defined as competitive races with a margin of victory  exceeding 20 percentage points). Close races increased in Maine and  Arizona after public financing was available, by about 9 and 6 percentage  points respectively. The change observed in Arizona was significantly  different from changes in the respective comparison states, where the  percentage of close races increased only slightly or actually decreased.  Landslide races also decreased in Maine (by 7 percentage points) and  Arizona (by 12 percentage points). These changes were significantly  different from the changes in the comparison states after controlling for  the other factors in our model.
Figures 8 and 9 present the year-to-year outcomes (instead of the averages  for before and after public financing) for the three margin of victory  measures for Maine and its comparison states, and Arizona and its  comparison states.
Changes in contestedness—the percentage of all races that had at least  one more candidate running than the number of seats available—in Maine  and Arizona before and after public financing was available were no  different from changes observed in comparison states. As shown in tables  11 and 12, before public financing was available (1996 and 1998), 86  percent of the elections in Maine and 60 percent of the elections in Arizona  were contested. The percentage of contested elections after public  financing was available (from 2000 through 2008) increased in both states,  to 91 percent in Maine and 75 percent in Arizona. However, even after  controlling for other factors, these increases, of 5 percentage points and 15  percentage points respectively, were not statistically different from the  changes in comparison states where percentages of contested elections  increased by about 5 and 12 percentage points.
Further, year-to-year changes in the percentages of contested elections in  Maine and Arizona over time are not much different from in their  comparison states before or after controlling for other factors, as shown in  figure 10.
Incumbent reelection rates (i.e., the percentage of incumbents who were  reelected among those incumbents who ran in contested races) did not  change significantly in Maine and Arizona before and after public  financing was available. We first examined the proportion of contested  races with incumbents who won relative to all contested races with an  incumbent candidate. As shown in tables 13 and 14, in Maine the  percentage of races in which incumbents who were challenged were  reelected was 88 percent before public financing was available and about  90 percent after it was available. In Arizona, the percentage was 98 percent  before public financing and 97 percent after. Incumbent reelection rates in  comparison states did not change over time—staying around 93 percent  and 91 percent, respectively, in the two groups of comparison states.  Further, our statistical model that tested the difference in change across  time periods between the states with and without campaign financing  provided no evidence of any statistically significant difference.
Year-to-year changes in incumbent reelection rates for races in Maine and  Arizona over time are basically unchanged and not much different from in  their comparison states, as shown in figure 11.
We found similarly and consistently high reelection rates when we  considered individual incumbent reelection rates, the proportion of  individual incumbents who won out of all incumbents who ran. In Maine,  90 percent of all incumbents running in general elections races were  reelected in the years before public financing was available, and 90.2  percent after. In Arizona, the individual incumbent reelection rate for  general elections before public financing was available was 96.9 percent,  compared to 96.1 percent after public financing was available. Research  has shown that incumbent candidates may have an advantage over other  candidates because of several factors, such as visibility in the media, name  recognition, and the ability to perform services for constituents. Thus, the  high incumbent reelection rates observed in these states despite the  implementation of the public financing programs is not surprising.
Many other factors we could not control in our analyses may affect  electoral competition, including the popularity of candidates, extreme one- issue candidates, polarizing candidates, local ballot initiatives and issues,  economic conditions, and other aspects of political context. Further, the  size and statistical significance of our comparative results also may be  affected by our choice of comparison states. Thus, we cannot say  definitively whether any of the changes we observe can be attributed to  the campaign financing programs.
section_title: Candidates and Interest Groups Reported Various Perceptions on the Effect of Public Financing Programs on Electoral Competition
paragraphs: The candidates and interest group representatives we interviewed from  Maine and Arizona provided various perspectives on the effect of the  public financing programs on the advantage of incumbent candidates and  the number of close races.
Most candidates we interviewed in Maine (8 of 11) believed that the  advantage of incumbent candidates neither increased nor decreased as a  result of the public financing program. Further, 2 of 11 candidates said  that incumbents’ advantage had increased under the public financing  program. Among the reasons candidates gave for incumbents’ advantage  was their access to resources, such as campaign databases; political party  support; and officeholder privileges, such as a budget to distribute  communications (e.g., mailers and newsletters) to constituents. On the  other hand, 1 of the 11 Maine candidates said that the advantage of  incumbents had decreased as a result of the public financing program  since some incumbents have been defeated by participating candidates  who may not have run for legislative office without public financing.
Arizona candidates had mixed perceptions on the effect of the public  financing program on incumbents’ advantage. Four of 11 candidates said  that the advantage of incumbents neither increased nor decreased as a  result of the public financing program, citing incumbents’ benefits such as  name recognition, experience in running a successful election campaign,  and access to funding. Three candidates said that incumbents’ advantage  increased. One of these candidates explained that participating incumbent  candidates did not have to do as much outreach to voters as they would  have if they needed to raise private funds. However, 3 candidates we  interviewed stated that the advantage of incumbent candidates has  decreased. Among the reasons given for the decrease in incumbents’  advantage was that incumbents face more challengers under public  financing. Another candidate agreed that incumbents had to work harder  to defend their seats in the primary election; however, according to the  candidate, incumbents’ advantage had not changed in general elections  since many legislative districts are either heavily Democratic or  Republican.
The majority of candidates we interviewed in Maine (9 of 11) thought that  the number of close legislative races increased as a result of the public  financing program and provided a range of explanations for why. For  example, one candidate said that before the public financing program,  some candidates would run unopposed because potential challengers  lacked funds, but after public financing became available, more  challengers have entered races and have run competitively. However,  other candidates had different perspectives that were not consistent with  the statistical data we observed—one candidate said that the number of  close races decreased, and one candidate said that the number of close  races neither increased nor decreased as a result of the public financing  program. According to this candidate, the broader political climate  influenced elections more than the public financing program.
In Arizona, over half of the candidates (6 of 11) believed that the public  financing program had increased the number of close races. Candidates  attributed the increase to greater equality in financial resources among  candidates, more candidates running for office, and more extensive  discussion of the issues, among other reasons. On the other hand, in  contrast with the data we observed, 3 candidates we interviewed said that  the number of close races neither increased nor decreased as a result of  the public financing program. Additionally, 2 candidates said that the  number of close races increased in the primary election, where, according  to one candidate, there have been more challengers, but neither increased  nor decreased in the general election, since many districts are heavily  Republican or Democratic.
Half of the interest group representatives we interviewed in Maine and  Arizona (5 of 10) thought the closeness of races had not changed, although  our data analysis did reveal changes. For example, an Arizona  representative commented that the public financing program by itself had  not changed the closeness of races and that redistricting and the ability of  independents to vote in the primary has made the races closer. On the  other hand, 2 of the 10 representatives believed that the closeness of races  had changed. One representative from Maine stated that he believed there  may be a few more close races because of the public financing program  while an Arizona representative believed the closeness of races had  changed in the primaries because more candidates have an opportunity to  run with public financing and therefore may be more competitive. Finally,  2 of the 10 interest group representatives were unsure whether public  financing had changed the closeness of races and 1 of the 10 interest group  representatives did not respond.
section_title: No Observed Changes in Increased Voter Choice in Terms of the Average Number of Legislative Candidates and the Percentage of Third-Party and Independent Candidates Represented in Races in Maine and Arizona
paragraphs: While increasing voter choice, as measured by changes in the number of  candidates per race and changes in the breadth of political party  affiliations represented in races, was a goal of public financing programs,  there were no observed changes in these measures in Maine and Arizona  after the public financing programs were available. However, as discussed  later, candidates we interviewed provided a range of perspectives about  the role of third-party and independent candidates.
section_title: No Observed Changes in the Average Number of State Legislative Candidates per District Race
paragraphs: The average number of legislative candidates per primary and general  election race in Maine and Arizona did not vary greatly over the seven  election cycles examined—before (1996 and 1998 elections) and after  (2000 through 2008 elections) the public financing programs became  available, as shown in table 15.
During the 1996 through 2008 legislative elections in Maine and Arizona,  candidates from a variety of third parties and independents ran for office.  In Maine, these candidates included Green Party members and  independents. In Arizona, these candidates included members of the  Green, Natural Law, Reform, and Libertarian Parties, as well as  independents. As shown in tables 16 and 17, while there were some  changes in the percent of races with third-party or independent candidates  receiving 5 percent or more of votes cast—a proxy indicator for “viable”  candidates—there were no discernable trends from 1996 through 2008 in  Maine and Arizona.
The 22 candidates from Maine and Arizona we interviewed had mixed  views on the role of third parties and independents in the 2008 election  and the quality and types of candidates running for election. The majority  of candidates in Maine (7 of 11) and Arizona (7 of 11) said that the role of  third parties and independents neither increased nor decreased as a result  of the public financing programs. However, the other candidates had  differing perspectives. For example, one candidate in Maine told us that  public financing had increased the role of third-party and independent  candidates as it has been particularly helpful for third-party candidates  running against incumbent candidates.
Additionally, several candidates provided comments about the effect of  the public financing programs on the quality and type of candidates  running for legislative office. For example, in Maine, 3 of the 11  candidates told us that the public financing program had a positive effect  on voter choice, by allowing a greater diversity of candidates to run for  office and by improving the quality of political debate. On the other hand,  3 other Maine candidates thought the public financing program allowed  candidates to run for office who were not credible or who were  unqualified. In Arizona, 2 of the 11 candidates said that the public  financing program allowed candidates that were on the extremes of the  political spectrum to run and win, which has resulted in a more partisan  and divided legislature. However, another candidate said that many of the  participating candidates are experienced incumbent candidates.
section_title: Average Legislative Candidate Spending Varied in Election Cycles under Public Funding Programs in Maine and Arizona; Independent Expenditures Increased in Maine, and Officials Reported Independent Expenditures Also Increased in Arizona
paragraphs: Average legislative candidate spending varied from year to year in Maine  and Arizona in the five election cycles that occurred after public financing  became available (2000 through 2008). In Maine, average candidate  spending in House races decreased statistically significantly after public  financing became available as compared to the two elections before public  financing was available (1996 and 1998). However, we could not attribute  this decrease to the public financing program because of other factors,  such as reductions made to the amounts of funding publicly financed  candidates received during the 2008 elections. Average candidate spending  in Maine Senate races did not change significantly. In Arizona, data were  not available to compare legislative candidate spending before 2000;  however, in the five elections under the public financing program, average  candidate spending has increased. Independent expenditures have  increased fourfold in Maine, and state officials reported that independent  expenditures have increased in Arizona since 2000.
subsections: section_title: Average Maine Legislative Candidate Spending Decreased in House Races, but Did Not Change Significantly in Senate Races after Public Financing Became Available
paragraphs: While average legislative candidate spending varied from year to year in  Maine, as shown in figure 12, in the five elections after public financing  became available average candidate spending in House races decreased,  while average Senate candidate spending did not change significantly  compared to the two elections before public financing was available.  Specifically, average candidate spending in Maine House races decreased  from an average of $6,700 before public financing was available to an  average of $5,700 after public financing became available. A state official  told us that a 5 percent reduction in the set amount of public funding  distributed to participating candidates for the general election likely  contributed to the decrease in spending in the 2008 election.
As shown in figure 13, spending by Maine legislative incumbent  candidates, challengers, and open race challengers (i.e., candidates  running in open races with no incumbent candidates) varied from year to  year.
However, overall, the difference in average spending by incumbents and  challengers narrowed in both House and Senate races after public  financing became available. In addition, average spending by open race  challengers was relatively higher than either incumbent or challenger  spending averages in House races, but was not significantly different in  Senate races in the elections after public financing became available. In  Maine House races, incumbents spent $1,800 more on average than their  challengers in the two elections before public financing became available.  In comparison, the difference in average spending by incumbents and  challengers was not statistically significant in the five elections under the  public financing program. Open race challengers spent more on average  ($6,100) than either incumbents, who spent an average of $5,600, or  challengers running against incumbents, who spent an average of $5,400,  in the five elections under the public financing program. Before public  financing became available, incumbents spent an average of $7,700, more  than the average amount spent by challengers ($5,900) or open race  challengers ($6,300) during the same period.
The difference in average incumbent and challenger spending in Maine  Senate races also decreased in the period after public financing became  available. On average, incumbents spent nearly $10,500 more than their  challengers in the two elections before public financing became available;  however, after public financing became available, the difference between  average incumbent and average challenger spending was not statistically  significant. Similarly, spending by open race challengers in Senate races  was not significantly different from spending by either incumbents or  challengers in the elections after public financing became available.
As figure 14 shows, average spending by participating and  nonparticipating candidates varied in the five elections under the public  financing program. However, overall, spending by participating candidates  was not significantly different than spending by nonparticipating  candidates in both Maine House and Senate races in the five elections  under the public financing program.
Independent expenditures in Maine legislative races have increased by  about $500,000 in the five elections under the public financing program.  As figure 15 shows, independent expenditures increased from about  $150,000 in 2000 to a high of about $655,000 in 2006, with a large increase  occurring in the 2004 election. The Director of Maine’s commission told us  that he believes that the increase in 2004 was due principally to a change  in the definition of independent expenditures. While independent  expenditures decreased somewhat (by about $20,000) in the 2008 election  compared to the 2006 election, the total amount remained high.
Average candidate spending in Arizona legislative races has generally  increased in the five elections under the public financing program;  however, we were not able to compare these spending levels to those in  the period before public financing became available. As shown in figure  16, average candidate spending in Arizona House races has increased in  each subsequent election since 2000, with the exception of 2006, when  average spending declined about $1,000 from the previous election. In  2008, average spending increased to $48,700, a $13,000 increase from 2006.  In Arizona Senate races, average candidate spending has been increasing  following the 2002 election, after a decrease of about $10,000 in the 2002  election.
State officials told us that the way candidates have spent campaign funds  has changed since the implementation of the public financing program.  For example, they said that candidates have coordinated their campaigns  with other candidates in their district to maximize their campaign  resources. For example, two Republican candidates for the Arizona House  of Representatives may pool their campaign funds to send out one mailing  in support of both candidates, rather than each candidate sending out  separate mailings.
Average spending by challengers and incumbents fluctuated from year to  year, with challengers spending more in some elections, and incumbents  spending more in other elections in both Arizona House and Senate races,  as shown in figure 17.
Overall, there was no statistically significant difference between average  incumbent and average challenger spending in either Arizona House or  Senate races in the five elections under public financing. Further, spending  by open race challengers in House races was not significantly different  from spending by incumbents or challengers after public financing became  available. However, in each of the five elections examined, average  spending by open race challengers in Arizona Senate races was higher  than average spending by incumbents or challengers, and overall, open  race challengers spent between $14,600 and $16,200 more on average than  either incumbents or challengers.
Participating candidates spent more on average than nonparticipating  candidates in Arizona House, while in Senate races nonparticipating  candidates spent more on average than participating candidates in some  years and less in others, as shown in figure 18. Participating candidates in  Arizona House races spent $44,500 on average, compared to  nonparticipating candidates, who spent an average of $29,700 in the five  elections under the public financing program. In Arizona Senate races,  there was not a statistically significant difference between average  spending by participating and nonparticipating candidates in the five  elections examined. State officials said that the amount spent on  independent expenditures has increased since 2000. Therefore, they stated  that matching funds distributed to participating candidates for  independent expenditures may account for some of the difference in  average spending by participating and nonparticipating candidates.
According to state officials, independent expenditures have increased in  Arizona legislative elections under the public financing program. In 2008,  independent expenditures in Arizona House and Senate races totaled  $2,170,000. While complete data on independent expenditures specifically  in legislative elections were not available for elections prior to 2008, state  officials told us that independent expenditures have increased.
Furthermore, in our 2003 report, the Arizona Citizens Clean Elections  Commission identified independent expenditures in the 1998, 2000, and  2002 legislative and statewide elections. Independent expenditures in  both legislative and statewide races totaled $102,400 in 1998, $46,700 in  2000, and $3,074,300 in 2002. We reported in 2003 that the increase in  independent expenditures in the 2002 election was largely associated with  the gubernatorial race, with more than 92 percent of the independent  expenditures associated with two gubernatorial candidates.
section_title: Candidates and Interest Group Representatives Had Mixed Perceptions about the Effect of Public Financing Programs on Campaign Spending
paragraphs: The candidates and interest groups we interviewed in Maine and Arizona  had a range of experiences with and views on campaign spending,  independent expenditures, and issue advocacy advertisements.
Candidates’ and Interest Groups’ Views on Campaign Spending  While candidates and interest groups had varying views about whether  campaign spending had increased in the 2008 elections, in general they  indicated that equality in financial resources among candidates had  increased in the 2008 election as a result of the public financing programs.  In Maine, about half of the candidates (5 of 11) we interviewed said that  campaign spending increased in the 2008 election as a result of the public  financing program. Candidates provided a number of reasons for the  perceived increase in campaign spending. For example, one candidate said  that campaign spending increased because some participating candidates  spent more than they would have if they had raised private funds for their  campaigns. Another candidate noted that the amount of money spent by  participating candidates has increased in some races because they  received additional matching funds for independent expenditures made by  interest groups. Spending by nonparticipating candidates may have  increased in some cases as well, according to one candidate, since the  presence of a participating candidate in the race forces nonparticipating  candidates to take the election more seriously and spend more on their  campaigns than they would have otherwise. However, 3 other candidates  we interviewed in Maine contended that campaign spending had  decreased. For example, one candidate noted that spending had decreased  because of the spending cap placed on participating candidates. Three  candidates felt that spending in Maine legislative races had neither  increased nor decreased as a result of the public financing program. In one  candidate’s view, contribution limits have had a greater influence on  spending than the public financing program.
In Arizona, the majority of candidates (7 of 11) we interviewed believed  that candidate spending increased in the 2008 election as a result of the  public financing program. One nonparticipating candidate told us that,  because of the matching funds provision of the public financing program,  in 2008 he spent almost double the amount than he spent in any previous  campaign in order to get out his message and outspend his participating  opponent. Another candidate commented that the increase in independent  expenditures has driven up campaign spending by triggering additional  matching funds for participating candidates. On the other hand, 3  candidates felt that the public financing program led to a decrease in  campaign spending in the 2008 election. One participating candidate  explained that she could have raised more money traditionally than she  received from the public financing program. One candidate indicated that  spending neither increased nor decreased.
Regarding interest groups in Maine, two of the five representatives stated  that candidate spending increased. One of these representatives  commented that there has been an increase in money spent by candidates  because there is more access to money and the races are more  competitive. Further, this representative stated that the public financing  program gives challengers an opportunity to level the playing field when  running against incumbents. Participating candidates who would  otherwise not be able to raise enough private money can run a well- financed campaign using public funds and have an opportunity to present  their issues for debate in the race. On the other hand, three of the five  interest group representatives stated that candidate spending neither  increased nor decreased in the 2008 election as a result of the public  financing program. One of these representatives commented that the  amount of money spent by candidates has not changed because limits are  set by the legislature. However, this representative opined that the amount  of money spent on behalf of the candidates in the form of independent  expenditures had increased dramatically and consistently. He went on to  say that the public financing program is reducing the disparity between the  candidates who can raise the money and those candidates who cannot  raise the money and that a candidate who is not serious can receive as  much money as a serious candidate.
In Arizona, four of the five interest group representatives believed that  candidate spending increased as a result of the public financing program.  For example, one of these representatives said that the public financing  program has moved money from the candidates to independent  expenditures, and that political parties are playing a significant role in this  shift. Another interest group representative believed that candidate  spending increased but was unsure if this increase was due to the public  financing program, noting that increased campaign spending could be  attributed to more competitive races or the rise in the cost of campaign  materials due to inflation. Further, he noted that a pattern has emerged in  which candidates run as participating candidates during their first  election, and after being elected run subsequently as nonparticipating  candidates. These legislators have name recognition and can raise the  money required to run their campaigns and can also help other candidates  get elected. On the other hand, one of the five representatives believed  that campaign spending had neither increased nor decreased and that  money has been redirected from the candidate campaigns to independent  expenditures. He did not believe that his organization was spending any  less money on campaigns.
In general, candidates and interest group representatives in Maine and  Arizona reported that equality in financial resources among candidates  had increased in the 2008 election as a result of the public financing  programs. In Maine, the majority of the candidates interviewed (7 of 11)  said that equality in financial resources among candidates increased as a  result of the public financing program. Two candidates commented that  candidates from different political parties compete on a roughly equal  playing field under the public financing program. Another Maine candidate  said that both nonparticipating and participating candidates spend about  the same amount on their campaigns. However, 2 candidates we  interviewed said that equality in financial resources had decreased as a  result of the public financing program. According to one candidate, more  money may be spent by political action committees than by candidates in a  race, which can reduce equality. One nonparticipating candidate  responded that the public financing program increased equality in  financial resources among participating candidates, but decreased equality  in financial resources among nonparticipating candidates, and 1 candidate  was not sure how the public financing program had influenced equality in  financial resources among candidates.
In Arizona, about half of the candidates (6 of 11) thought equality in  financial resources among candidates had increased. Two of these  candidates commented that in their experience, candidates spent roughly  the same, regardless of their political party affiliation or if they  participated in the public financing program or used traditional means to  finance their campaigns. On the other hand, 1 candidate said that equality  in financial resources had decreased, and commented that he was  outspent by his participating opponents by a ratio of 13 to 1. Three of the  11 candidates we interviewed said that the equality in financial resources  neither increased nor decreased as a result of the public financing  program. For example, one candidate told us that incumbents continue to  outspend their opponents and that nonparticipating candidates have  developed strategies to maximize their financial advantage, such as raising  funds at the end of the campaign so participating candidates have little  time to spend matching funds. The remaining candidate was not sure  about the change in resource equality.
Seven of the 10 interest group representatives we interviewed in Maine (3  of 5) and Arizona (4 of 5) said that equality in financial resources among  candidates as a result of the public financing programs had increased. For  example, an Arizona interest group representative commented that the  public financing law holds the candidates’ financial resources even. On the  other hand, 1 of the 5 representatives from Maine stated that equality in  financial resources among candidates decreased and commented that  since monetary limits are set statutorily, it is the independent expenditures  that skew the financial resources among candidates. Finally, 2 of the 10  representatives, 1 from Maine and 1 from Arizona, believed that equality in  financial resources neither increased nor decreased, while 1 of these  representatives further commented that even though financial resources  stayed the same, some nonparticipating candidates had a financial  advantage because they asked for larger donations from interest groups.
Candidates’ and Interest Group Representatives’ Views on  Independent Expenditures  Independent expenditures were of varying importance in the races of the  candidates we spoke with. The majority of the Maine legislative candidates  we interviewed (7 of the 11) reported that independent expenditures were  of little or no importance to the outcome of their races in the 2008  election. One candidate explained that no independent expenditures were  made on his behalf because he was perceived to be the likely winner.  However, 2 candidates we interviewed said that independent expenditures  were moderately important, and 2 candidates said that independent  expenditures were extremely or very important to the outcome of their  races in the 2008 election. The candidates who had independent  expenditures made in their races shared their experiences with us. One  candidate said an independent expenditure made on his behalf could have  possibly hurt his campaign since the expenditure was for a mailer that was  poorly conceived and included a photograph of him that was of low  quality. Another candidate who participated in the public financing  program in Maine said that she and her participating opponent received  large amounts of matching funds in response to independent expenditures  made by business, trucking, state police, and equal rights groups that went  towards mailings, television ads, and newspapers ads. However, the  candidate thought that other factors played a greater role in the outcome  of her election.
In Arizona, independent expenditures reportedly played an important role  in the outcome of 6 of the 11 candidates’ races, with 5 candidates saying  that independent expenditures were moderately important and 1  candidate reporting that independent expenditures were extremely  important. One of these candidates said that groups made independent  expenditures on behalf of his opponent to produce a number of mailers as  well as billboards and television commercials that hurt his election  campaign by shifting the focus away from the issues that he had  concentrated on. Another candidate said that groups made independent  expenditures opposing her near the end of her 2008 campaign; however,  since she participated in the public financing program, she received  matching funds and was able to respond. On the other hand, 5 candidates  reported that independent expenditures were of little or of no importance  in the outcome of their races. One candidate said that while there was a lot  of money spent on independent expenditures in his race, the independent  expenditures did not play a big role in the outcome of the election since  roughly the same amount was spent on behalf of both him and his  opponent. Another candidate explained that since she was an incumbent  and her reelection was secure, not much was spent on independent  expenditures in her race.
Eight of the 10 interest group representatives in Maine (5 of 5) and Arizona  (3 of 5) we interviewed said their groups made independent expenditures  in support of candidates in the 2008 elections; although, the  representatives had varying views about the influence the expenditures  had on the outcome of the races. All 5 Maine interest group  representatives made independent expenditures in the 2008 elections, and  all expenditures included mailers in support of candidates. Three of these  5 Maine representatives were not sure how much influence the  expenditures had on the outcome of the elections. On the other hand, the  remaining 2 representatives had different views. One Maine representative  believed that her group’s expenditures were effective in getting the  candidate’s message out to the voters. Finally, another Maine  representative, who made several independent expenditures, said his  experience was mixed, and the candidates he made independent  expenditures on behalf of lost in more cases than they won. In Arizona, 3  of the 5 interest groups made independent expenditures. Two of these  representatives said the expenditures were for mailers in support of  candidates and believed that they were beneficial because the candidates  won. The third representative said that his group made expenditures for  both positive and negative mailers, and he believed that the expenditures  were ineffective and was not sure what role they played in the outcome of  the 2008 elections.
Candidates’ Views on Issue Advocacy Spending  While Maine and Arizona legislative candidates we interviewed offered  varying views on issue advocacy spending, 14 of the 22 candidates stated  that issue advocacy advertisements were of little of no importance to the  outcome of their races in the 2008 elections. Issue advocacy spending is  often viewed as those forms of media advertisements that do not expressly  advocate for or against a clearly identified political candidate. For  example, such issue advocacy ads do not use terms like “vote for,” “vote  against,” or “reelect.” In general, courts have not upheld campaign finance  law regulation of issue advocacy spending upon the reasoning that the  rationales offered to support such regulations did not justify the  infringement upon constitutional free speech protections. According to  state officials in Maine and Arizona, neither Maine nor Arizona track issue  advocacy spending.
In Maine, 7 of the 11 candidates we interviewed reported that issue  advocacy advertisements were of little or of no importance to the outcome  of their races. One of these candidates explained that his race was not  targeted by issue advocacy ads because he was expected to win and his  opponent was not perceived to be very competitive. Another candidate we  interviewed had a negative issue advocacy ad made in his race, but he did  not think it affected the outcome of the election. The candidate told us the  issue advocacy ad listed the tax increases he voted for alongside a smiling  picture of him; however, according to the candidate, the ad only told half  of the story, since the bill that contained the tax increases was revenue  neutral and raised some taxes while lowering others. In contrast, 4 of the  11 candidates we interviewed said that issue advocacy was moderately  important in their 2008 races. For example, 1 of these candidates said that  issue advocacy advertisements highlighting the candidates’ positions on  education issues was a factor in the outcome of his race.
Similarly, in Arizona, the majority of candidates interviewed (7 of 11) said  that issue advocacy ads were of little or no importance to the outcome of  their races in the 2008 election. For example, 1 candidate told us that he  did not think that issue advocacy ads made a difference in his race  because the ads did not mention the candidates’ names. Another candidate  said that there were some issue advocacy ads that played an information  role in his race by presenting a comparison of the candidates’ beliefs;  however, the candidate thought the ads were of little importance in the  outcome of the election. On the other hand, 3 candidates said that issue  advocacy ads were moderately important to the outcome of their races.  According to one candidate, issue advocacy advertisements on crime,  abortion, and education funding influenced the outcome of his race.
section_title: Voting-Age Citizens, Candidates, and Interest Group Representatives We Interviewed Perceived That the Public Financing Programs Did Not Decrease Interest Group Influence or Increase Public Confidence, Although Some Reported That Campaign Tactics Have Changed
paragraphs: Our surveys of voting-age citizens and interviews with candidates and  interest group representatives in Maine and Arizona indicated that the  public campaign financing programs did not decrease the perception of  interest group influence and did not increase public confidence in  government. However, candidate and interest group representatives  reported that campaign tactics, such as the role of political parties and the  timing of expenditures, had changed.
subsections: section_title: Perceived Interest Group Influence Did Not Decrease as a Result of the Public Financing Program
paragraphs: In 2009, the percentage of voting-age citizens in Maine and Arizona who  said that the public financing law had greatly or somewhat increased the  influence of special interest groups on legislators was not significantly  different from those who said that the law had greatly or somewhat  decreased special interest group influence. For example, among those  polled in Maine in 2009, the percentage of voting-age citizens who said that  the influence of interest groups greatly or somewhat increased was 17  percent, while 19 percent said that the interest group influence had greatly  or somewhat decreased, as shown in table 18. An additional 19 percent felt  that the law had no effect on the influence of interest groups on  legislators. In Arizona in 2009, 24 percent believed the public financing law  greatly or somewhat increased the influence of interest groups, while 25  percent felt it greatly or somewhat decreased interest group influence.  Additionally, 32 percent of those polled indicated that the public financing  law had no effect on the influence of interest groups.
Both Maine and Arizona candidates and interest group representatives had  mixed views about changes in interest group influence as a result of the  public financing programs in their states. In Maine, a little over half of the  candidates (6 of 11) said that the likelihood that elected officials serve the  interests of their constituents free of influence by specific individuals or  interest groups neither increased nor decreased as a result of the public  financing program. One of these candidates said the public financing  program has not met the goal of decreasing the influence of interest  groups, since interest groups will always find ways to influence legislators  and the election process. However, 4 candidates we interviewed in  Maine—all of whom participated in the public financing program—said  that that likelihood that elected officials serve free of influence by  individuals or groups greatly increased or increased. One of these  candidates explained that participating candidates are more empowered  to serve as they see fit and are less willing to listen to political party  leadership. On the other hand, a different candidate said that the elected  officials are less likely to serve free of influence by specific individuals or  groups as a result of the public financing program. The candidate  explained that under the public financing program, lobbyists and special  interest groups have focused less on individual candidates, and more on  winning favor with the Democratic and Republican party leadership.  According to this candidate, interest groups are spending more, since the  contribution limits do not apply to contributions to political parties. In  turn, the candidate said that political parties are buying the loyalty of  candidates by providing know-how, campaign staff, and polling data  during the election.
For Arizona, about half of the candidates interviewed (5 of 11) said that  the public financing program did not affect the likelihood that elected  officials serve the interests of their constituents free of influence by  specific individuals or groups. One of these candidates said that the  influence of special interest groups still exists, even if it does not come in  the form of direct contributions. She explained that interest groups  approach candidates with questionnaires and ask them to take pledges on  different policy issues and also send their members voter guides and  scorecards that rate candidates. Two other Arizona candidates we  interviewed commented that under the public financing program, interest  groups have been contributing to campaigns in different ways, such as  providing campaign volunteers, and collecting $5 qualifying contributions  for participating candidates. In contrast, 4 of the 11 candidates said that  the likelihood that elected officials serve the interests of their constituents  had decreased as a result of the public financing program. One of these  candidates explained that the role of interest groups has increased, as they  have become very skilled at producing advertisements with independent  expenditures. On the other hand, 2 candidates we interviewed said that the  public financing program increased the likelihood that elected officials  serve the interests of their constituents free of influence by specific  individuals or groups. One of these candidates said that in her experience  as a participating candidate and state senator, interest groups are not “in  her ear all of the time,” and legislators are free to make decisions based on  the interests of their constituents.
With regard to Maine interest groups we interviewed, the five  representatives we interviewed had varying views about the likelihood  that elected officials serve the interests of their constituents free of  influence by specific individuals or interest groups and about changes in  interest group influence as a result of the public financing program. Two  representatives believed that the likelihood that elected officials serve the  interests of their constituents free of influence had increased, and one  representative stated that it had decreased. The two remaining  representatives stated that it had neither increased nor decreased. One of  these representatives commented that candidates are predisposed to  certain issues based on their core beliefs and there is not any correlation  between public financing and the likelihood that the elected officials will  serve the interests of their constituents free of influence. With regard to  changes in interest group influence, three Maine representatives stated  that they have less of a relationship with candidates. One of these three  representatives stated that interest groups are one step removed from the  candidate because to make independent expenditures they cannot directly  coordinate with the candidate. As a result, this representative further  stated that interest groups have established stronger relationships with  political parties. Another of these representative believed that the public  financing program has slightly decreased the role of interest groups  because money tends to be funneled through the political parties. Also,  there has been more emphasis on interest groups giving their  endorsements of candidates rather than giving them money.
With regard to Arizona interest groups we interviewed, four of the five  representatives said that the likelihood that elected officials serve the  interests of their constituents free of influence by specific individuals or  interest groups neither increased nor decreased as a result of the public  financing program. One of the five representatives stated that the  likelihood that elected officials serve the interests of their constituents had  decreased but did not elaborate. Regarding interest group influence, two  of the five representatives expressed opinions about whether changes in  interest group influence as a result of the public financing programs have  occurred. For example, one of these representatives stated that prior to  the public financing program, interest groups made direct contributions to  the candidates, but now they have to make independent expenditures or  give money to the political parties. This representative stated that public  financing has led to fringe candidates entering races and has caused a  polarization in the legislature that has decreased the role of interest  groups. Another representative stated that the interest groups do not  directly support the candidate’s campaigns and, instead, make  independent expenditures. He also stated that there has also been an  increased emphasis on volunteer campaign activities in which interest  groups use their members to help certain candidates.
section_title: Public Confidence in Government Did Not Increase as a Result of the Public Financing Programs in Maine and Arizona
paragraphs: In 2002 and 2009, the percentage of voting-age citizens in Maine and  Arizona who said that their confidence in state government had somewhat  or greatly decreased was not significantly different from those who said  that their confidence had somewhat or greatly increased as a result of the  public financing law. Additionally, the predominant response in both  states was that respondents did not believe that the public financing  program had any effect on their confidence in state government, as shown  in table 19. For example, in Maine in 2009, the percentage of voting-age  citizens who stated that the public financing law had no effect was 42  percent while the percent who felt that their confidence had somewhat or  greatly increased was 20 percent, and the percent who felt their  confidence had somewhat or greatly decreased was 15 percent. In Arizona,  the percentage of voting-age citizens who stated that the public financing  law had no effect was 39 percent in 2009, while the percent who felt that  their confidence had somewhat or greatly increased was 26 percent, and  the percent who felt their confidence had somewhat or greatly decreased  was 22 percent.
In Maine and Arizona, over half of the candidates we interviewed reported  that the public’s confidence in government had not changed as a result of  the public financing programs. Over half of the candidates in Maine (6 of  11) said the public’s confidence in government neither increased nor  decreased as a result of the public financing program. One of these  candidates explained that he did not think many people were aware of the  public financing program. Three of the 11 candidates said that the public’s  confidence in government decreased in 2008 because of the public  financing program. According to one candidate, people have been  disappointed with the quality of the candidates, and their confidence in  government has decreased as a result. On the other hand, 2 of the 11  candidates said that the public financing program increased the public’s  confidence in government.
In Arizona, 7 of the 11 candidates interviewed said that the public’s  confidence in government neither increased nor decreased as a result of  the public financing program. The remaining 4 candidates were divided.  Two candidates said that the public’s confidence in government greatly  increased or increased as a result of the public financing program. One of  these candidates commented that the public financing program goes  beyond providing public financing by providing a public forum and  publications that play an important role in informing voters about the  races and candidates. However, 2 candidates said that the public’s  confidence in government has decreased as a result of the public financing  program. One of these candidates said that the public financing program  resulted in a more divisive government, which has slightly decreased the  public’s confidence in government.
section_title: Candidates and Interest Groups Representatives Reported Campaign Tactics Changed as a Result of the Public Financing Programs
paragraphs: Candidates and interest group representatives in Maine and Arizona  provided a range of perspectives on how campaign tactics have changed  under the public financing programs. Their observations included changes  in how money is spent and the role of political parties and the timing of  campaign activities.
Candidates in both Maine and Arizona identified changes regarding how  money is spent and the role of political parties since the implementation of  the public financing programs. For example, in Maine, one candidate told  us that private funding that would have gone directly to fund candidate  campaigns has been redirected to political parties, who strategically focus  their resources in certain races to help elect their candidates. Candidates  reported that political parties have helped support candidates by providing  advice, polling services, campaign volunteers, distributing campaign  literature, and making automated telephone calls to constituents on behalf  of candidates. According to another Maine candidate, political parties are  advising candidates to participate in the public financing program so that  the political parties and political action committees can raise more money  for their organizations. However, other candidates had different  perspectives on the role of political parties under the public financing  program. For example, one candidate told us that since participating  candidates receive public financing, they are less dependent on political  parties for money, less willing to listen to the party leadership, and are  more empowered to make their own decisions.
Candidates in Arizona reported similar changes in how money is spent and  the role of political parties. For example, one candidate commented that  now more money is being funneled through the political parties rather  than being directly provided to the candidates. Another candidate said that  political parties have used the public financing program as a vehicle,  explaining that when candidates use public funds for their campaigns, the  money that would have normally gone to the candidate is now diverted to  other candidates or causes. According to one candidate, after public  financing, political parties are more active and have more extensive field  operations to support candidates in a greater number of districts. Further,  four candidates said that political parties are gaming the public financing  system to maximize support for their candidates. For example, one  candidate explained that if two Republican candidates or two Democratic  candidates were running in the same multimember district, then partisan  groups could make independent expenditures on behalf of one candidate  that would trigger matching funds for the other participating candidate.  However, two candidates said their party did not get involved in their  races in the 2008 election, and one candidate said she did not observe any  change in the role of political parties since the implementation of the  public financing program. Furthermore, one candidate said that under the  public financing program, candidates have more independence from  political parties, noting that she relies on support from a broad  constituency in her district, not just from her political party.
Interest group representatives in both Maine and Arizona identified  changes regarding how money is spent and the role of political parties  since the implementation of the public financing programs. For example,  in Maine, one interest group representative stated that the group  coordinates its expenditures through the party caucus committees and  other interest groups. He said that substantial contributions from the  caucuses are now made to candidate campaigns without the candidates’  knowledge. These committees are also engaged in public polling on an  ongoing basis to identify voting patterns and constituent concerns in order  to identify candidates to support. Another representative stated that  because she made contributions to the political party, she does not have a  way to know how her political action committee money is being spent  because the committee makes independent expenditures on behalf of the  candidate. Further, she stated that for participating candidates, the only  thing an interest group can do is give an endorsement. In turn,  participating candidates use these endorsements in their campaign  advertisements. On the other hand, one representative said that there has  not been much difference in campaign tactics since public financing has  been available, and another representative said that the same tactics, such  as direct mailers and going door-to-door for monetary solicitations, have  been used.
Interest group representatives in Arizona similarly reported that public  financing has changed campaign strategies. For example, one  representative said that there is an increased reliance on volunteer  activities, especially for statewide races. This representative stated that  the amount of public funds for statewide candidates is not adequate, so  candidates must rely on volunteers to get their message out. Volunteer  activities, such as handing out flyers door-to-door or working phone banks  to call voters, have become increasingly important. Another representative  stated that since more candidates are participating in the public financing  program and cannot accept direct contributions, there is more money  available to nonparticipating candidates. He has noticed that  nonparticipating candidates are asking for more money from interest  groups than before public financing. According to another representative,  campaign strategies are evolving. For example, a recent strategy has been  the teaming of public and private candidates to maximize their resources  such as on mailers.
Candidates and interest group representatives in Maine and Arizona also  commented on how the public financing program has changed the timing  of some campaign activities. In Maine, three candidates said that  candidates or interest groups are changing the timing of spending in order  to minimize either the amount or the effectiveness of matching funds  distributed to opponent participating candidates. For example, one  participating candidate told us that supporters of his opponent distributed  mailers right before the date when communications that support or  oppose clearly identified candidates are presumed to be independent  expenditures and trigger matching funds for participating opponents.  Another strategy, according to one candidate, is for nonparticipating  candidates or interest groups to spend money in the days immediately  before the election, when participating candidates’ ability to use the  money is effectively restricted due to time constraints. In response, one  candidate told us that participating candidates have television, radio, or  other advertisements ready in case they receive additional matching funds  that need to be spent quickly.
In Arizona, five candidates said that the tactics surrounding the timing of  campaign spending have changed since the implementation of the public  financing program. For example, one candidate said that the start of the  campaign season is determined by the date on which spending by or on  behalf of candidates triggers matching funds. In addition, one candidate  explained that nonparticipating candidates have changed the timing of  fundraising efforts, so that more funds are raised at the end of campaign,  when it is more difficult for participating candidates to spend matching  funds effectively. As in Maine, one candidate in Arizona said that  participating candidates have responded to this tactic by preparing  advertisements ahead of time, just in case they receive additional  matching funds.
Interest group representatives in Maine and Arizona also commented on  how the public financing program has changed the timing of some  campaign activities. In Maine, one interest group representative stated that  candidates were strategically timing their advertisements to gain a  competitive advantage. For example, candidates are thinking about from  whom to get their seed money, and when to qualify for the money. In  addition, usually, incumbents have an advantage because they can send  out newsletters to constituents close to the election without triggering  matching funds. This representative stated the biggest consideration  regarding campaign strategies is how and when matching funds will be  triggered by the independent expenditures. She said that independent  expenditures are made in the last 5 days before an election on the  assumption that the opposing participating candidate cannot make  effective use of the matching funds. In Arizona, one interest group  representative said that generally nonparticipating candidates control the  timing of their fundraising and spending, and participating candidates  make plans to spend matching funds to counter last-minute attack  advertisements.
section_title: Data Limitations and Differences in Measurement Hinder Analysis of Changes in Voter Participation in Maine and Arizona
paragraphs: While increasing voter participation, as indicated by increases in voter  turnout, was a goal of public financing programs in Maine and Arizona,  limitations in voter turnout data, differences in how voter turnout is  measured across states and data sources, and challenges isolating the  effect of public financing programs on voter turnout hindered the analysis  of changes over time.
Voter turnout is typically calculated as a percentage of the voting-age  population (VAP) or voting-eligible population (VEP) who cast a ballot in  an election. The calculation of changes in voter turnout over time  depends less on the specific data used for the numerator and denominator  than it does on the consistency of how these data were collected over time  and the use of comparable time frames and types of elections (e.g.,  presidential and congressional races). However, data reporting issues,  changes in measurement, and other factors affect the calculation of voter  turnout estimates.
With respect to data limitations, data on voter turnout are not consistent  across states or data sources. Depending on the source, the numerator of  the turnout calculation (i.e., who cast a ballot in an election) may include  the total number of approved ballots cast, the number of ballots counted  whether or not they were approved, self-reports of voting information, or  the number of ballots cast for the highest office on a ticket, such as for  president. For example, official voter turnout data compiled by the  Election Assistance Commission (EAC) are based on surveys of states;  however, states vary in their policies, for example, related to voter  registration, as well as in which turnout statistics they report. Some  states report voter turnout as the highest number of ballots counted,  whereas other states report voter turnout as the number of votes for the  highest office. Further, which specific statistic is reported is not  necessarily constant over time. For example, EAC data prior to 2004  provide voter turnout based on the number of votes for the highest office  on the ticket. Beginning in 2004, EAC reported total ballots cast, counted,  or total voters participating for Maine and Arizona, but has not  consistently reported the vote for highest office in these states. The  Federal Election Commission (FEC) also provides information on turnout  for federal elections, but the specific highest office in a given state and  year could be for a state office such as governor that would not be  reported along with federal election results.
Other voter turnout statistics, including those based on surveys of U.S.  residents as part of the Census Bureau’s Current Population Survey (CPS)  or the American National Election Studies, rely on respondents’ self- reports of voting behavior. However, self-reports of voting behavior are  subject to overreporting because many respondents perceive that voting is  a socially desirable behavior. Additionally, estimates of voting based on  self-reports can fluctuate depending on the wording of the question used  in a survey. Further, survey results are generalizable only to the population  covered by the survey, or sampling, frame. The CPS sampling frame  excludes individuals living in group quarters such as nursing homes,  meaning that estimates of turnout based on CPS data would not include  turnout among these individuals. Data on other forms of voter  participation, such as volunteering for a campaign, contacting media,  donating money, fundraising, and contacting representatives on issues of  concern, are limited because they are rarely collected with the express  purpose of making state-level estimates, and surveys with this information  are not usually designed in a manner to allow comparison across  individual states over many years.
In addition, measurements of the denominator of voter turnout differ with  respect to whether citizenship or other factors that affect eligibility are  taken into account. Turnout estimates produced by the Census Bureau  have historically used the VAP as a denominator, which includes those  U.S. residents age 18 and older. In theory, a more accurate estimate of  voter turnout can be made by adjusting VAP to account for the statutory  ability of individuals to vote, in particular by removing noncitizens from  the estimate. This is particularly important at the state level because the  proportion of noncitizens varies across states and over time. However,  the practical application of such adjustments may be complicated by the  timing of available data relative to the date of the election or by other data  limitations. For example, although the Census Bureau began to produce  estimates of a citizen VAP for EAC in 2004, the estimate is calculated as of  July 1 of the election year and does not adjust for population changes that  may occur between July and the time of the election. Other alternatives for  adjusting VAP for citizenship include calculating estimates between  decennial Census surveys. The Census data currently provided to EAC  include adjustments for citizenship based on another alternative, the  American Community Survey (ACS). The ACS uses a different sampling  frame than other surveys used to adjust for citizenship, such as the CPS,  and has slightly different estimates of citizenship. In addition to  adjustments for citizenship, researchers have also adjusted VAP to  account for other factors that affect eligibility to vote, including state  felony disenfranchisement laws, and overseas voting, among others. To  make these adjustments, researchers use alternative data sources such as  information on the population in prison from the Department of Justice’s  Bureau of Justice Statistics; however, these adjustments cannot always be  applied similarly because of differences across states over time (such as in  the proportion of probationers that are felons).
Lastly, changes in voter turnout cannot be attributed directly to public  funding as there are a number of factors that affect voter turnout. Voter  turnout can be affected by demographic factors such as age, income, how  recently a person registered to vote, and previous voting history. For  example, studies have shown that much higher percentages of older  Americans vote than do younger citizens. Voter turnout can also be  influenced by a broad range of contextual factors, including the candidates  and their messages, mobilization efforts, media interest, campaign  spending, and negative advertising. These potential confounding factors,  along with aforementioned difficulties in calculating precise and  consistent turnout information at the state level, prevented us from  quantifying the extent to which, if any, Maine’s and Arizona’s public  financing programs affected these states’ voter turnout. Additional  information about factors influencing the determination of changes in  voter participation in Maine and Arizona can be found in the e-supplement  accompanying this report—GAO-10-391SP.
section_title: Concluding Observations
paragraphs: Seven years ago our 2003 report concluded that with only two elections  from which to observe legislative races—2000 and 2002—it was too early  to precisely draw causal linkages to resulting changes. Today, following  three additional election cycles—2004, 2006, and 2008—the extent to  which there were changes in program goals is still inconclusive. There  were no overall observable changes in three of the four goals, and we  cannot attribute observed changes with regard to the winner’s victory  margin in Maine and Arizona to the public financing programs because  other factors, such as changing economic conditions and candidate  popularity, can vary widely and affect election outcomes. Further,  essential data needed, such as uniform voter registration and turnout data  across states, do not currently exist to enhance analyses conducted and, in  the case of the fifth goal, increasing voter participation, to allow for  analysis of changes. While undertaking considerable efforts to obtain and  assemble the underlying data used for this report and ruling out some  factors by devising and conducting multiple analytic methods, direct  causal linkages to resulting changes cannot be made, and many questions  regarding the effect of public financing programs remain.
Public financing programs have become an established part of the political  landscape in Maine and Arizona and candidates have chosen to participate  or not participate based on their particular opponents and personal  circumstances and values. The public financing program is prevalent  across these states, and in each election cycle new strategies have  emerged to leverage aspects of the public financing program by candidates  and their supporters to gain advantage over their opponents. The trend of  rising independent expenditures as an alternative to contributing directly  to candidates is clear and its effect is as yet undetermined.
section_title: Third-Party Views and Our Evaluation
paragraphs: We requested comments on this draft from the Maine and Arizona Offices  of the Secretary of State and the commissions overseeing the public  financing programs in each state. We received technical comments from  the Arizona Citizens Clean Elections Commission, which we incorporated  as appropriate. We did not receive any comments from the other agencies.
We are sending copies of this report to interested congressional  committees and subcommittees. In addition, the report will be available at  no charge on the GAO Web site at http://www.gao.gov.
If you or your staffs have any questions concerning this report, please  contact me at (202) 512-8777 or jenkinswo@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Key contributors to this report are listed in  appendix IV.  illiam O. Jenkins, Jr.
section_title: Appendix I: Objectives, Scope, and Methodology
subsections: section_title: Objectives
paragraphs: In accordance with the congressional direction specified in Senate Report  110-129 to revisit and update our 2003 report on the public financing  programs in Maine and Arizona to account for data and experiences of the  past two election cycles, this report    provides data related to candidate program participation, including the  number of legislative candidates who chose to use public funds to run  for seats in the 2000 through 2008 elections in Maine and Arizona and  the number of races in which at least one legislative candidate ran an  election with public funds; and    describes statistically measurable changes and perceptions of changes  in the 2000 through 2008 state legislative elections in five goals of  Maine’s and Arizona’s public financing programs—(1) increasing  electoral competition by, among other means, reducing the number of  uncontested races (i.e., races with only one candidate per seat in  contention); (2) increasing voter choice by encouraging more  candidates to run for office; (3) curbing increases in the cost of  campaigns; (4) reducing the influence of interest groups and, thereby,  enhance citizens’ confidence in government; and (5) increasing voter  participation (e.g., voter turnout)—and the extent to which these  changes could be attributed to the programs.
section_title: Overview of Our Scope and Methodology
paragraphs: To obtain background information and identify changes since our 2003  report, we conducted a literature search to identify relevant reports,  studies, and articles regarding the public financing programs in Maine and  Arizona, as well as campaign finance reform issues generally, which had  been published since May 2003 when our report was issued. Based on our  literature review, discussions with researchers who have published  relevant work on public financing programs or state legislatures, and  suggestions by state officials in Maine and Arizona, we interviewed 9  researchers and 17 representatives of advocacy groups and other  organizations concerned with campaign finance reform or issues related to  state legislative elections. See the bibliography for a listing of the reports  and studies we reviewed.
We reviewed the state statutes governing the public financing program— Maine’s Clean Election Act and Arizona’s Citizens Clean Elections Act— from 2002 through 2009 and other documentation related to the public  financing program, such as candidate handbooks and annual reports, to  determine any changes in the programs since our 2003 report. In addition,  we interviewed state election officials in the commissions responsible for  administering the two programs—Maine’s Commission on Governmental  Ethics and Election Practices and Arizona’s Citizens Clean Elections  Commission. We also interviewed officials in Maine’s and Arizona’s Offices  of the Secretary of State, the agencies responsible for supervising and  administering state elections activities, such as tabulating official election  results. Through our discussions with Maine and Arizona state officials  and our review of changes to the public financing statutes in both states  from 2002 through 2009, we determined that the five goals of the public  financing programs, as set out in our 2003 report, have not changed.
We reviewed the Web sites of Maine’s Commission on Governmental  Ethics and Election Practices (www.state.me.us/ethics) and Arizona’s  Citizens Clean Elections Commission (www.azcleanelections.gov) to  obtain information on the public financing programs, such as candidate  handbooks and forms necessary in order to run for office. Additionally, we  reviewed information on state elections on the Web sites of Maine’s  Secretary of State (http://www.maine.gov/sos) and Arizona’s Secretary of  State (http://www.azsos.gov). Officials from these state agencies told us  that their respective Web sites were current and reliable for our review.
In addressing the objectives, we obtained and analyzed, to the extent  possible, available statistical data from Maine’s and Arizona’s commissions  and Secretaries of State offices on candidate program participation,  election outcomes, and reported campaign spending from the 1996  through 2008 state legislative elections. We assessed the quality and  reliability of electronic data provided to us by officials in Maine and  Arizona by performing electronic testing for obvious errors in accuracy  and completeness; validating the data using other sources; and reviewing  the associated documentation, such as system flow charts. We also  interviewed state officials about their data systems and any issues or  inconsistencies we encountered with the processing of the data. When we  found discrepancies, such as nonpopulated fields, we worked with state  officials to correct the discrepancies before conducting our analyses.  Based on these tests and discussions, we determined that the data  included in the report were sufficiently reliable for our purposes. Although  the public financing programs in Maine and Arizona cover both legislative  and certain statewide offices, we limited the scope of our review to  legislative candidates, since most of the elections for statewide offices  occurred every 4 years and sufficient data would not have been available  to conduct our analyses and draw conclusions.
To obtain candidates’ and interest groups’ perspectives about the public  financing programs, we conducted telephone interviews with a  nonprobability sample of 22 out of 653 candidates who ran in 2008 state  legislative primary and general elections in Maine (11 out of 452  candidates) and Arizona (11 out of 201 candidates). We conducted  interviews with candidates from each state from June through September  2009. We selected these candidates to reflect a range of those who did and  did not use public financing, won or lost in primary and general elections,  had different political party affiliations, ran for election in different  legislative chambers, and were incumbents and challengers. In our  interviews, we asked similar, but not identical, questions to those from our  2003 report. Specifically, we included questions about the candidates’  views on factors influencing their decision to participate or not participate  in the public financing program, the effects of the public financing  program on electoral competition and campaign spending, and changes in  the influence of interest groups on elections. We coded the candidates’  responses to the interview questions and conducted a content analysis to  categorize responses and identify common themes.
Further, we interviewed a nonprobability sample of 10 interest group  representatives—5 in Maine and 5 in Arizona. In Maine, we selected these  interest groups from a listing of approximately 80 registered interest  groups provided by a Maine state official. In Arizona, we selected interest  groups from a total of approximately 220 interest groups, which we  identified through the Arizona Secretary of State campaign finance Web  site as contributors to campaigns during the 2008 election cycle. We  selected these interest groups based on several factors, including industry  sectors, such as communications or construction, range of contributions  made to political campaigns, and availability and willingness of the  representatives to participate in our interviews. Results from these  nonprobability samples cannot be used to make inferences about all  candidates or interest groups in Maine and Arizona. However, these  interviews provided us with an overview of the range of perspectives on  the effects of the public financing programs. Results from the candidate  interviews are included in report sections regarding candidate  participation, voter choice, electoral competition, campaign spending, and  interest group influence. Results from the interest group interviews are  included in report sections regarding electoral competition, campaign  spending, and interest group influence.
Further details about the scope and methodology of our work regarding  each of the objectives are presented in separate sections below.
section_title: Candidate Participation
paragraphs: To provide data related to candidate program participation, including the  number of legislative candidates who chose to use public funds to run for  legislative seats (“participating candidates”) in the 2000 through 2008  elections in Maine and Arizona and the number of races in which at least  one candidate ran an election with public funds, we obtained data from  Maine’s and Arizona’s commissions and Offices of the Secretary of State.  Specifically, for each state, we obtained or calculated data showing  the number of legislative candidates who chose to use public funds to  run for seats in the 2000 through 2008 elections,  the seats (i.e., House or Senate) for which they were candidates,  the political party affiliation of the candidates,    whether the candidates were incumbents or challengers,    whether the candidates were successful in their races, and  the number of races in which at least one legislative candidate ran an  election with public funds.
As used in our report, “challengers” consist of all nonincumbent  candidates. Thus, a candidate who was not an incumbent is called a  challenger, even if that candidate did not face an opponent. Also, in  counting races to calculate the proportion of races with at least one  participating candidate, we included all races in which there was a  candidate on the ballot regardless of whether or not the candidate faced a  challenger. Additionally, we eliminated from our analyses all candidates  with zero votes and write-in candidates whose names did not appear on  the ballot.
section_title: Electoral Competition
paragraphs: In designing our approach to assess electoral competition, we first  reviewed literature published since our 2003 report and interviewed  researchers and representatives of organizations and advocacy groups  who are concerned with public financing and campaign finance reform  issues in general. Specifically, we reviewed articles and interviewed  researchers and representatives of organizations concerned with public  financing issues who had conducted studies and research on electoral  competition in states. Based on our review of the literature and these  discussions, we concluded that there is no agreement on a standardized  methodology to measure electoral competitiveness in state legislative  elections. Thus, we used many of the same measures of electoral  competition as those in our 2003 report, including the    winners’ victory margins, which refers to the difference between the  percentage of the vote going to the winning candidate and the first  runner up;    percentages of contested races; which refers to the percentage of all  races with at least one more candidate running than the number of  seats in contention; and,  incumbent reelection rates, which refers to the percentage of  incumbents who were reelected.
To assess changes in electoral competition in Maine and Arizona, we  examined changes in these three measures of electoral competition in  state legislative races by comparing the two elections before public  financing became available to the five elections with public financing.  However, unlike our 2003 report, we obtained and analyzed general  election data from 1996 through 2008 from four comparison states that did  not offer public financing programs for legislative candidates to determine  if changes identified in Maine’s and Arizona’s general election outcomes  for that same time period were similar to or different from changes  observed in the four comparison states.
subsections: section_title: Four Comparison States
paragraphs: We selected the four comparison states—Colorado, Connecticut, Montana,  and South Dakota—based on a number of factors, including geographic  proximity to Maine or Arizona; the capacity of the state legislature; the  presence of legislative term limits; structure of the state legislature, such  as legislative districts with more than one representative; and district size.  In selecting our comparison states, we also reviewed other factors such as  demographic and economic characteristics, including age, race, and  poverty levels, and urban/rural population distribution, and  recommendations from researchers and experts with knowledge of state  legislatures we interviewed. Although all states were potentially  candidates for comparison to Maine and Arizona, we eliminated some  states (such as those with odd-year election cycles or a unicameral  legislature) from our review because of their dissimilarity to Maine and  Arizona, and focused primarily on those states that were recommended to  us by researchers and experts we interviewed with knowledge of state  legislatures. We also considered whether a state had reliable electronic  data that covered the 1996 through 2008 general elections and whether the  state was able to provide the data to us within the time frame of our  review. No state we considered perfectly matched Maine or Arizona across  the full range of characteristics we reviewed. Table 20 summarizes some  of the characteristics we used to select the four comparison states for  comparison to Maine and Arizona.
We conducted analyses, to the extent possible, of the four comparison  states’ election data for 1996 through 2008 for comparison with Maine and  Arizona to determine whether any trends or patterns observed in states  with public financing were also seen in the four comparison states that do  not have public financing programs. For our analyses, we compared  Maine with the election outcomes of Connecticut, Montana, and South  Dakota. We compared Arizona with the election outcomes of Colorado,  Montana, and South Dakota. Generally, when conducting these analyses,  we separated House and Senate elections and grouped Maine’s and  Arizona’s election outcomes before the public financing program became  available (1996 and 1998 elections) and election outcomes after public  financing (2000 through 2008) with election outcomes in the comparison  states during the same time periods.
section_title: Victory Margins
paragraphs: We measured victory margins in three ways. First, we calculated the  average margin of victory for contested elections, defined in single- member districts as the difference in the number of votes between the  winner and first runner up, divided by the total vote count. This measure is  generally equivalent to the calculation of margin of victory in our 2003  report. For multimember districts, we defined the margin of victory as  the number of votes going to the second winner minus the number of  votes going to the runner up, excluding the number of votes going to the  first winner from the denominator. Second, we compared whether  changes in the margin of victory had an effect on the competitive nature of  elections as defined by the distribution of the vote outcome between the  winner and first runner-up. We compared close elections—defined as a  difference of less than 10 percentage points in votes between the winning  and losing candidates—with elections that were not as close—10  percentage points or more difference in votes between the winning and  losing candidates. Third, we compared “landslide elections” or races with  decisive winners—defined as a difference of more than 20 percentage  points in votes between the winning and losing candidates—with elections  that were not landslides—defined as 20 percentage points or less  difference in votes between the winning and losing candidates.
section_title: Number of Contested Races
paragraphs: We measured the number of contested races by contrasting elections in  which the number of candidates exceeded the number of seats available in  the race with elections in which the number of candidates was equal to the  number of seats available.
section_title: Incumbent Reelection Rates
paragraphs: We measured incumbent reelection rates in two ways. First, for those  general election races with incumbents that were contested, we calculated  the percentage of races with incumbents who won compared to all races  with incumbents. Second, we calculated the percentage of individual  incumbents who won, relative to all incumbents who ran. To assess  whether our calculations of incumbent reelection rates were sensitive to  redistricting that forced incumbents from formerly separate districts to  run against each other, we calculated the individual incumbency  reelection rate excluding incumbents who participated in races with more  incumbents than seats. Although we were not able to assess other  potential effects of redistricting on incumbent reelection rates, such as  those caused by demographic changes in a candidates’ constituency, we  conducted a limited analysis of geographic changes in state legislative  district boundaries.
section_title: Multivariate Analyses
paragraphs: We used two types of multivariate statistical methods, fixed effects  regression and hierarchical loglinear models, to evaluate how the  competitiveness of races in Maine and Arizona changed after the  implementation of public financing programs. Although multivariate  methods do not allow us to directly attribute changes in outcomes to  states’ public financing programs, they do allow us to assess whether  changes in Maine and Arizona were unique relative to a set of comparison  states, controlling for other factors, and whether the observed changes  were different from what would have occurred by chance. Our statistical  models and estimates are sensitive to our choice of comparison states for  Maine and Arizona, thus researchers testing different comparison states  may find different results.
We estimated fixed effects regression models to rule out broad groups of  variables that may explain the patterns in our data without directly  measuring them. Fixed effects models account for unmeasured factors  that do not change over time (such as the structure of the state  legislature), or that change in the same way (such as which party controls  the U.S. Congress), for all states or legislative districts. This feature is  particularly useful for our analysis because comprehensive and reliable  data are not available on many of the factors that affect the  competitiveness of state elections, such as long-term district partisanship,  local economic conditions, and candidate quality.
We estimated a variety of fixed effects models to gauge the sensitivity of  the results to different assumptions and alternative explanations. These  included the following:    Models that included fixed effects for districts and each combination  of state and chamber of the legislature. These models estimate the  district effects separately than the state effects.
Models that excluded multimember districts. These models confirm  that our results are not sensitive to our choice of measure of margin of  victory for multimember districts.
Models that logged the margin of victory to normalize the data to  account for outlying data. These models reduce the potential influence  of highly uncompetitive races.
Models that excluded races with no incumbent running for reelection.
These models account for the possibility that term limits influenced  whether a race was contested because they exclude those seats that  were open because of term limits.
Models that excluded races from Connecticut in 2008 when public  funding became available. Full public financing was available for the  first time to state legislative candidates in the 2008 elections in  Connecticut.
Models that excluded races in which the number of incumbents  exceeded the number of available seats. These models confirm that  our results are not sensitive to our definition of an incumbent “win”  when more incumbents than available seats participated in a race.
We included fixed effects for each year and, where appropriate, controlled  for whether an incumbent was running for reelection. We estimated the  models of both continuous and binary outcomes using linear probability  models and robust variance estimators, due to the fact that all of our  covariates are binary (i.e., all of the variables stand for the presence or  absence or something, such as incumbency).
We also estimated loglinear models to evaluate the changes in these  outcomes in House and Senate elections in Maine, Arizona, and the four  comparison states. In our analyses, we fit hierarchical models to the  observed frequencies in the different four-way tables or five-way tables  formed by cross-classifying each of the four outcomes by state (Arizona  vs. other states and Maine vs. other states), chamber (Senate vs. House),  time period (before public financing programs were available in elections  prior to 2000 and after public financing programs were available in 2000  and later elections), and whether an incumbent was or was not involved in  the race.
We followed procedures described by Goodman (1978) and fit hierarchical  models that placed varying constraints on the odds and odds ratios that  are used to describe the associations of state, chamber, and time period  with each outcome. Ultimately, we chose from among these different  models a “preferred” model that included factors that were significantly  related to the variation in each outcome and excluded those factors that  were not.
We are issuing an electronic supplement concurrently with this report— GAO-10-391SP. In addition to summary data on election outcomes in  Maine and Arizona, the e-supplement contains additional discussion on the  following issues:  summary tables of the election data obtained from the four  comparison states;  fixed effects model assumptions, sensitivity analysis, and results;  loglinear model methods and results;    margin of victory measures in multimember districts;  incumbency reelection rates and the potential effect of district  boundary changes following the 2000 Census; and  voter turnout calculations and data.
section_title: Voter Choice
paragraphs: To determine whether public financing encouraged more state legislative  candidates to run for office, we calculated the average annual number of  candidates per legislative primary and general election races for seven  election cycles, including two elections preceding the public financing  program—1996 and 1998—and five elections after public financing  became available—2000 through 2008. Also, to determine whether there  were different types of candidates running for office, we compared the  percentage of races with third-party or independent legislative candidates  who received at least 5 percent of votes cast for each of these seven  election cycles. We chose our threshold based on research and interviews  with state officials that suggested 5 percent of votes is commonly required  for parties to gain access to and retain ballot placement. Ballot placement  is critical in that it enables voters to use party information to make voting  decisions, and allows them to see alternative party candidates at the same  level as major party candidates without having to recall a specific  candidate name. This definition of viability focuses on voter choice, and is  distinct from whether a candidate is “electable” or competitive with other  candidates.
section_title: Campaign Spending
paragraphs: To determine changes in candidate spending, we obtained available  campaign spending and independent expenditure data from Maine and  Arizona. Specifically, we obtained summarized campaign spending and  independent expenditure data from Maine’s Commission on Governmental  Ethics and Election Practices, the state agency responsible for campaign  spending reports. We found that Maine’s campaign spending data for the  1996 through 2008 election cycles and independent expenditure data for  the 2000 through 2008 election cycles were sufficiently reliable. In Arizona,  we obtained campaign spending and independent expenditure data from  the Secretary of State’s office. Due, in part, to several upgrades to  Arizona’s campaign finance data systems over the time period reviewed,  we found that Arizona’s campaign spending data for the 2000 through 2008  election cycles and independent expenditure data for the 2008 election  cycle were sufficiently reliable, with limitations as noted. For example, up  to the 2008 election, Arizona’s campaign spending database did not include  precise data to identify and link each candidate to his or her campaign  finance committee(s), the entities responsible for reporting candidates’  contributions and spending. Further, the candidates’ campaign finance  committees can span several election cycles and include spending reports  for candidates who ran in several races for the same or different offices,  such as House or Senate. Thus, to the extent possible, we matched  candidates and candidate campaign finance committees through  electronic and manual means, identified and calculated relevant candidate  spending transactions, and sorted the data by election cycle dates.  Further, although Arizona’s Secretary of State office collected independent  expenditure data from 2000 through 2008, it did not collect data on the  intended beneficiaries of independent expenditures until the 2008 election  cycle. Therefore, we limited our analysis of independent expenditures to  the 2008 elections since we could not identify which candidates benefited  from the expenditure. We worked with state officials responsible for the  public financing programs and campaign finance data systems in Maine  and Arizona to develop our methodology for analyzing these data. These  officials reviewed summaries we wrote about their respective databases  and agreed that they were generally accurate and reliable.
We calculated the average House and Senate legislative candidates’  spending in Maine for seven election cycles, from 1996 through 2008 and in  Arizona for five election cycles, from 2000 through 2008. For comparisons  across years and to observe any trends, we adjusted all candidate  spending for inflation with 2008 as the base year using the Department of  Commerce’s Bureau of Economic Analysis gross domestic product implicit  price deflator.
section_title: Interest Group Influence and Citizens’ Confidence in Government
paragraphs: To assess changes in interest group influence and citizens’ confidence in  government, we included questions in our interviews with candidates in  Maine’s and Arizona’s 2008 elections and interviews with interest groups in  both states. Also, we contracted with professional pollsters who  conducted omnibus telephone surveys with representative samples of  voting-age citizens in Maine and Arizona. Generally, this polling effort  was designed to determine the extent to which voting-age citizens in each  state were aware of their state’s public financing program and to obtain  their views about whether the program has decreased the influence of  interest groups, made legislators more accountable to voters, and  increased confidence in government.
In order to compare responses, the survey consisted of largely similar  questions to those asked for our 2003 report. The questions for Maine and  Arizona were identical, except for some minor wording differences  customized for the respective states, as shown in table 21. Follow-up  questions (e.g., questions 2, 3, and 4 in each set) were not asked of any  individual who, in response to question 1, acknowledged knowing “nothing  at all” about the applicable state’s clean election law or was unsure or  declined to answer. Since we pretested largely similar questions with  members of the general public for our 2003 report, we did not pretest  questions for this effort.
subsections: section_title: Contracted Polling Organizations
paragraphs: To conduct the Maine poll, we contracted with Market Decisions  (Portland, Maine), the same polling organization that conducted the Maine  poll for our 2003 report. During October 19, 2009, to November 2, 2009, the  firm completed 404 telephone interviews with randomly selected adults  throughout Maine. The sample of the telephone numbers called was based  on a complete updated list of telephone prefixes used throughout the  state. The sample was generated using software designed to ensure that  every residential number has an equal probability of selection. When a  working residential number was called, an adult age 18 or older in the  household was randomly selected to complete the interview. The 404  completed interviews represent a survey response rate of 42.5 percent.
To conduct the Arizona poll, we contracted with Behavior Research  Center, Inc. (Phoenix, Arizona), the same polling organization that  conducted the Arizona poll for our 2003 report. During September 9  through 18, 2009, the firm completed telephone interviews with 800 heads  of households in Arizona. To ensure a random selection of households  proportionately allocated throughout the sample universe, the firm used a  computer-generated, random digit dial telephone sample, which selected  households based on residential telephone prefixes and included all  unlisted and newly listed households. Telephone interviewing was  conducted during approximately equal cross sections of daytime, evening,  and weekend hours—a procedure designed to ensure that all households  were equally represented regardless of work schedules. Up to five  separate attempts were made with households to obtain completed  interviews. The 800 completed interviews represent a survey response rate  of 42.98 percent.
section_title: Survey Error
paragraphs: All surveys are subject to errors. Because random samples of each state’s  population were interviewed in these omnibus surveys, the results are  subject to sampling error, which is the difference between the results  obtained from the samples and the results that would have been obtained  by surveying the entire population under consideration. Measurements of  sampling errors are stated at a certain level of statistical confidence. The  maximum sampling error for the Maine survey at the 95 percent level of  statistical confidence is plus or minus 6.7 percent. The maximum sampling  error for the Arizona survey at the 95 percent level of statistical confidence  is plus or minus 5 percent.
section_title: Voter Participation (Turnout)
paragraphs: To examine changes in voter participation, we reviewed information about  voter turnout data from the Census Bureau, Federal Election Commission,  United States Election Assistance Commission, the American National  Election Studies, and other resources, including two repositories of  elections data and information—George Mason University’s United States  Election Project (the Elections Project) and the Center for the Study of the  American Electorate. We identified these sources through our review of  the literature and through discussions with researchers. To determine the  extent to which changes in voter participation could be assessed over  time, we reviewed documentation and research on these potential data  sources, including information on collection and measurement of the  voting-age population (VAP) or voting-eligible population (VEP) and the  type of turnout recorded. Finally, we examined data and methodologies  for measuring changes in voter turnout and other forms of participation to  determine whether changes in participation could be precisely measured  at the state level. We found that the different data sources required to  calculate changes in turnout are not always comparable across sources  and over time, because of differences in the way that data are collected or  changes in how turnout is defined. As such, there was no need to conduct  electronic testing to further assess the reliability of the data for our  purposes. This does not indicate that the data are unreliable for other  purposes. We also discussed voter turnout calculations with state officials  and researchers. Additional detail about our work related to voter  participation is included in the e-supplement to this report— GAO-10-391SP.
We conducted this performance audit from November 2008 through May  2010, in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Overview of the Public Financing Programs for Legislative Election Campaigns in Maine and Arizona
paragraphs: Maine voters, by a margin of 56 percent to 44 percent, passed the Maine  Clean Election Act (Maine’s Act) in November 1996. Arizona voters, by a  margin of 51 percent to 49 percent, passed the Citizens Clean Elections  Act (Arizona’s Act) in November 1998. These ballot initiatives established  optional financing programs for candidates desiring to use public funds to  finance their campaigns as an alternative to traditional fundraising means,  such as collecting contributions from individuals or political action  committees. The Maine and Arizona programs were the first instances of  state programs that offered public funding intended to fully fund most  campaign costs of participating candidates seeking state legislature seats  and certain statewide offices. Both states’ public financing programs  became available for candidates beginning with the elections in 2000.
Generally, participating candidates—those candidates who forgo private  fund raising and who otherwise qualify to take part in the respective  state’s public financing program—are to receive specified amounts of  money for their primary and general election campaigns. Under Maine’s  and Arizona’s laws, nonparticipating candidates—those candidates who  choose to continue using traditional means for financing campaigns—are  subject to certain limits on contributions and reporting requirements.
This appendix provides an overview of the public financing programs for  legislative election campaigns in Maine and Arizona. Detailed information  is available on the Web sites of the state agencies responsible for  administering the respective program—Maine’s Commission on  Governmental Ethics and Election Practices (www.state.me.us/ethics) and  Arizona’s Citizens Clean Elections Commission  (www.azcleanelections.gov).
subsections: section_title: Maine’s Public Financing Program
subsections: section_title: Purposes of Maine’s Public Financing Program
paragraphs: Other than noting that the public financing program is an alternative  financing option available to certain candidates, Maine’s Act has no  section that specifically details the purposes, goals, or objective of the law.  To get the initiative on the ballot, a coalition of interest groups, the Maine  Voters for Clean Elections, collected about 65,000 signatures. At that time,  the coalition and other proponents advertised that the public financing  program would “take big money out of politics” by limiting what  politicians spend on campaigns, reducing contributions from special  interests, and increasing enforcement of election laws. They said that the  initiative, if passed, would decrease the influence of wealthy individuals,  corporations, and political action committees in politics, and would level  the playing field so that challengers would have a chance against  incumbents. They asserted that politicians would then spend more time  focusing on the issues that affect all of their constituents rather than spend  time on pursuing money for their campaigns. Further, proponents also  advertised that the public financing program would allow candidates who  do not have access to wealth the opportunity to compete on a more equal  financial footing with traditionally financed candidates, restore citizen’s  faith and confidence in government, and give new candidates the  opportunity to run competitively against incumbents. In 2003 we reported  that according to Maine state officials and interest group representatives  we interviewed there was not any organized opposition to the initiative  when it was on the ballot.
A 2007 report by the Maine Commission on Governmental Ethics and  Election Practices reaffirmed that the goals of the program are generally  to increase the competitiveness of elections; allow participating  candidates to spend more time communicating with voters; decrease the  importance of fundraising in legislative and gubernatorial campaigns;  reduce the actual and perceived influence of private money in elections;  control the increase of campaign spending by candidates; and allow  average citizens a greater opportunity to be involved in candidates’  campaigns.
section_title: Requirements to Receive Public Funding in Maine
paragraphs: In Maine, candidates who wish to participate in the state’s public financing  option and receive funds for campaigning must first be certified as a Maine  Clean Election Act candidate. Certified candidates, among other things,  must (1) forgo self-financing and all private contributions, except for a  limited amount of “seed money,” which are funds that may be raised and  spent to help candidates with the qualifying process prior to certification,  and (2) demonstrate citizen support by collecting a minimum number of $5  contributions from registered voters. For example, as table 22 shows, to  qualify for public financing during the 2008 election cycle, a candidate in a  Maine House race had to gather $5 qualifying contributions from at least  50 registered voters, and could raise no more than $500 of seed money.
section_title: Amounts of Allowable Public Funding for Participating Candidates in Maine
paragraphs: After being certified by the state as having met qualifying requirements,  participating candidates receive initial distributions (predetermined  amounts) of public funding and are also eligible for additional matching  funds based on spending by privately funded opponents in conjunction  with independent expenditures against the candidate or on behalf of an  opponent.
For example, in Maine’s 2008 election each participating candidate in a  contested race for the House of Representatives (i.e., a race with more  than one candidate per seat in contention) received an initial distribution  of public funds in the amount of $1,504 for the primary election and an  amount of $4,144 for the general election. Also, under Maine’s Act, the  maximum allowable matching funds available to a participating candidate  in a legislative race were capped at double the initial distribution that the  candidate received for his or her contested race, as shown in table 23.
Under Maine’s Act, prior to being amended in 2009, the commission was  required to recalculate the initial distribution amounts at least every 4  years, based upon average expenditures in similar races in the two  previous election cycles. Under this statute, the commission was not  required to recalculate the initial distribution amounts in 2008 and  intended to use the same payment amounts as in 2006. However,  according to a state official, due to a shortfall in the state’s General Fund  budget, the Maine State Legislature approved a 5 percent reduction in the  general election distribution amounts, which took effect in the 2008  legislative elections. Beginning in the 2012 elections, in response to a 2009  amendment, the state will be required to recalculate the initial distribution  amounts every 2 years taking into account several factors such as average  candidate spending and increases in costs of campaigning.
Matching funds are triggered when required reports show that the sum of a  privately funded opponent’s expenditures or obligations, contributions  and loans, or fund revenues received exceeds a participating candidate’s  sum of fund revenues. Further, the calculation used to assess whether  matching funds are triggered is to include reported independent  expenditures that benefit an opponent’s campaign. Generally, independent  expenditures are any expenditures made by individuals or groups, other  than by contribution to a candidate or a candidate’s authorized political  committee, for any communication (such as political ads or mailings) that  expressly advocates the election or defeat of a clearly identified  candidate. During the final weeks before an election, the definition of  independent expenditure expands beyond express advocacy to include a  broader range of communications directed to the public.
In 2008, a total of about $3 million in public funds was authorized for the  332 participating candidates who ran in the Maine primary or general  elections for state legislature.
section_title: Revenue Sources for Maine’s Public Financing Program
paragraphs: Various revenue sources are used to support Maine’s public financing  program. As table 24 shows, appropriations were the largest funding  source in Maine in 2008. Table 24 also indicates that in 2008, about 6  percent of Maine’s funding came from state income tax checkoff donations  and other voluntary donations. This included $194,970 in funding from  state income tax checkoff donations, which represented about 7 percent  of the 665,503 total returns filed in tax year 2007 in the state.
section_title: Administration of Maine’s Public Financing Program
paragraphs: Maine’s Act utilizes a commission, the Maine Commission on  Governmental Ethics and Election Practices, to implement the public  financing program and enforce provisions of the act. The commission  consists of five members appointed by the Governor. Nominees for  appointment to the commission are subject to review by the joint standing  committee of the state legislature having jurisdiction over legal affairs and  to confirmation by the state legislature. The commission is to employ a  director and a staff to carry out the day-to-day operations of the program.  In addition to financing election campaigns of candidates participating in  the public financing program, the Maine Clean Election Fund is also to pay  for administrative and enforcement costs of the commission related to  Maine’s Act. In 2008, the commission’s total expenditures from the fund  were $3,357,472, including $552,426 in personnel, technology, and other  administrative costs.
section_title: Reduced Contribution Limits and Additional Reporting Requirements for Nonparticipating Candidates in Maine
paragraphs: Before the passage of Maine’s Act, political campaigns were financed  completely with private funds. There were no limitations placed on  expenditures by candidates from their personal wealth. Under Maine’s Act,  nonparticipating candidates are not limited in the amount they may spend  from their personal financial resources on their own campaigns. While not  faced with limits on the total amount of money that they can raise or  spend, nonparticipating candidates are subject to certain limitations on  the amount that an individual, corporation, or political committee can  contribute to the campaigns of nonparticipating candidates. In the 2008  elections, for example, a nonparticipating candidate for the state  legislature could accept up to $250 from a donor per election. Prior to the  2000 election, the candidates could have collected up to $1,000 from  individuals and up to $5,000 from political committees and corporations.
Additional reporting requirements are placed on nonparticipating  candidates who have one or more participating opponents. For example, a  nonparticipating candidate with a participating opponent must notify the  commission when receipts, spending, or obligations exceed the initial  allocation of public funds paid to the participating opponent. Further, the  nonparticipating candidate must file up to three additional summary  reports so that the commission can calculate whether the participating  opponent is entitled to receive any matching funds.
section_title: Maine Reporting Requirements for Independent Expenditures
paragraphs: Under Maine law, individuals or organizations making independent  expenditures in excess of $100 during any one candidate’s election must  file reports with the state. Reporting requirements for independent  expenditures are important for helping to determine if matching funds are  triggered. Independent expenditures are generally defined as any  expenditure for a communication, such as campaign literature or an  advertisement that expressly advocates the election or defeat of a clearly  identified candidate that is made independently of the candidate, the  candidate’s committee, and any agents of the candidate. However, under  Maine’s campaign finance laws, expenditures by a group or individual to  design, produce, or disseminate a communication to support or oppose a  clearly identified candidate during the final weeks before an election with  a participating candidate will be presumed to be independent  expenditures, even if the communication does not expressly advocate a  candidate’s election or defeat. This “presumption period” was first  implemented in the 2004 Maine election. In 2008, the presumption period  was 21 days before a primary election and 35 days before a general  election. The law relating to the presumption period for a general election  increased the period from 21 to 35 days in 2007. As table 25 shows, Maine  has reporting requirements based upon the amount and timing of the  independent expenditures to help ensure that participating candidates  receive any additional matching funds they may be eligible for in a timely  manner, particularly in the days before the election.
section_title: Arizona’s Public Financing Program
subsections: section_title: Purpose of Arizona’s Public Financing Program
paragraphs: Arizona’s Act contains a “findings and declarations” section that addresses  the intent of the program. Specifically, the “findings” subsection of the  Citizens Clean Elections Act, passed by voters in 1998, noted that the  state’s then-current election financing-system  allows elected officials to accept large campaign contributions from  private interests over which they have governmental jurisdiction;  gives incumbents an unhealthy advantage over challengers;    hinders communication to voters by many qualified candidates;  effectively suppresses the voices and influence of the vast majority of  Arizona citizens in favor of a small number of wealthy special  interests;    undermines public confidence in the integrity of public officials;  costs average taxpayers millions of dollars in the form of subsidies and  special privileges for campaign contributors;    drives up the cost of running for state office, discouraging otherwise  qualified candidates who lack personal wealth or access to special  interest funding; and  requires that elected officials spend too much of their time raising  funds rather than representing the public.
Further, the “declarations” subsection of Arizona’s 1998 Act stated that:  “the people of Arizona declare our intent to create a clean elections system  that will improve the integrity of Arizona state government by diminishing  the influence of special interest money, will encourage citizen  participation in the political process, and will promote freedom of speech  under the U.S. and Arizona Constitutions. Campaigns will become more  issue-oriented and less negative because there will be no need to challenge  the sources of campaign money.”
section_title: Requirements to Receive Public Funding in Arizona
paragraphs: As in Maine, Arizona candidates who wish to participate in the state’s  public financing option and receive funds for campaigning must first be  certified as a Clean Election candidate. Certified candidates, among other  things, must (1) forgo self-financing and all private contributions, except  for a limited amount of “early contributions,” which are funds that may be  raised and spent to help candidates with the qualifying process prior to  certification, and (2) demonstrate citizen support by collecting a set  number of $5 contributions from registered voters. To qualify for public  financing during the 2008 election cycle, a candidate for Arizona’s House  of Representatives had to gather at least 220 qualifying $5 contributions,  and could collect no more than $3,230 in early contributions, as shown in  table 26.
section_title: Amounts of Allowable Public Funding for Participating Candidates in Arizona
paragraphs: After being certified by the state as having met qualifying requirements,  participating candidates receive initial distributions (predetermined  amounts) of public funding and are also eligible for additional matching  funds when an opposing nonparticipating candidate exceeds the  participating candidate primary or general election spending limits.
In Arizona’s 2008 elections, each participating candidate for the House of  Representatives or Senate who was in contested party primary elections  (i.e., races with more than one candidate per seat in contention) received  an initial distribution of public funds in the amount of $12,921. After the  primary, successful major party candidates who were in a contested  general election race then received an additional $19,382, as shown in  table 27. Independent candidates received 70 percent of the sum of the  original primary and general election spending limits. Unopposed  candidates (i.e., those in an uncontested race) received only the total of  their $5 qualifying contributions as the spending limit for that election.
Participating candidates also received additional matching funds up to  predetermined limits when an opposing nonparticipating candidate  exceeded the primary or general election spending limits. Matching funds  were also provided to participating candidates when independent  expenditures were made against them or in favor of opposing candidates  in the race. The calculation to assess whether matching funds for  participating candidates are triggered is to include reported independent  expenditures that, in general, are made on behalf of nonparticipating or  another participating candidate in the race by individuals, corporations,  political action committees, or other groups. A January 2010 federal  district court ruling held Arizona’s Citizens Clean Election Act to be  unconstitutional. More specifically, the U.S. District Court for the District  of Arizona held that Arizona’s matching funds provision burdens First  Amendment speech protections, is not supported by a compelling state  interest, is not narrowly tailored, is not the least restrictive alternative, and  is not severable from the rest of the statute thereby rendering the whole  statute unconstitutional. On May 21, 2010, the U.S. Court of Appeals for  the Ninth Circuit reversed the district court ruling on the basis that the  matching funds provision imposes only a minimal burden on First  Amendment rights, and bears a substantial relationship to the state’s  interest in reducing political corruption.
In total, about $6 million in public funds was distributed in 2008 to the 120  participating candidates for the Arizona legislature.
section_title: Revenue Sources for Arizona’s Public Financing Program
paragraphs: Arizona’s public financing program is supported through various revenue  sources. As table 28 shows, a surcharge on civil and criminal fines and  penalties was the largest funding source. Table 28 also indicates that in  2008, $6.6 million, or about 39 percent of the fund’s revenue, came from  state income tax checkoff donations and other voluntary donations.
section_title: Administration of Arizona’s Public Financing Program
paragraphs: Arizona’s Act established the Citizens Clean Elections Commission to  implement the public financing program and enforce provisions of the act.  The commission consists of five members selected by the state’s highest- ranking officials of alternating political party affiliation. No more than  two commissioners may be from the same political party or county, and  commissioners may not have run for or held office, nor been appointed to  or elected for any office for the 5 years prior to being chosen as a  commissioner. One new commissioner is to be appointed each year. As  established by Arizona’s Act, the commission is to employ an Executive  Director to facilitate administration of the program. The Executive  Director is responsible for, among other things, educating and assisting  candidates in compliance with the act’s requirements, limits, and  prohibitions, assisting candidates in participating and obtaining public  funding, as well as determining additional staffing needs and hiring  accordingly. Arizona’s Act caps commission spending for a calendar year  at $5 times the number of Arizona resident personal income tax returns  filed the previous calendar year. Of that amount, the commission may use  up to 10 percent for administration and enforcement activities and must  use 10 percent or more for voter education activities. The remainder of  commission spending goes to participating candidates’ campaign funds. In  calendar year 2008, the commission’s expenditures totaled $14,741,043— $850,447 for administration and enforcement, $6,179,857 for voter  education, and $7,710,739 for campaign funds. With regard to the  $7,710,739 spent for campaign funds in 2008, $1,715,395 was for statewide  candidates and $5,995,344 was for legislative candidates.
The commission’s responsibility for administering and enforcing Arizona’s  Act covers related contribution limits, spending limits, and reporting  requirements that affect both participating and nonparticipating  candidates. Cases of possible violations may be initiated with the  commission in one of two ways: (1) either by an external complaint or (2)  through information that comes to the commission’s attention internally.  The commission may assess civil penalties after investigating compliance  matters and finding probable cause of a violation unless the candidate  comes into compliance within a set time frame or settlement agreement is  reached. Under certain circumstances, the commission can remove a  legislator from office for violating specified Arizona Clean Elections Act  spending or contribution limits. For example, the commission, for the first  time, acted to remove a state legislator from office for exceeding spending  limits by over 10 percent—about $6,000—in his publicly funded election  campaign during the 2004 primary election. The commission’s action was  upheld by an Arizona administrative law judge and an appeal by the  legislator was unsuccessful in the Arizona court system.
section_title: Reduced Contribution Limits and Additional Reporting Requirements for Arizona Nonparticipating Candidates
paragraphs: Before the passage of Arizona’s Act, political campaigns in Arizona were  financed completely with private funds. There were no limitations placed  on expenditures by candidates from their personal wealth. Under  Arizona’s public financing laws, nonparticipating candidates are not  limited in the amount they may spend from their personal financial  resources on their own campaigns. While not faced with limits on the total  amount they can spend on their own campaigns, nonparticipating  candidates are subject to certain limitations on the amounts of  contributions they can accept. For example, in Arizona, contributions  from individuals were limited to $488 per donor for nonparticipating  candidates for the state legislature for the 2008 election cycle. The Arizona  act reduced the limits on individual contributions to nonparticipating  candidates by 20 percent.
Nonparticipating candidates have additional reporting requirements. For  example, a nonparticipating candidate opposed by a participating  candidate, must, in general, file a report with the Secretary of State if the  campaign’s expenditures before the primary election exceed 70 percent of  the original primary election spending limit imposed on a participating  opponent or if the contributions to a nonparticipating candidate has  exceeded 70 percent of the original general election spending limit.
section_title: Arizona Reporting Requirements for Independent Expenditures
paragraphs: Under Arizona law, individuals or organizations making independent  expenditures must file reports with the Secretary of State. According to  commission officials, the commission coordinates with the Secretary of  State to determine if participating candidates are eligible for matching  funds based upon independent expenditures opposing participating  candidates or supporting other candidates in their race. Under Arizona  law, independent expenditures are generally defined as expenditures such  as campaign literature or advertisements that expressly advocate the  election or defeat of a clearly identified candidate that is made  independently of the candidate, the candidate’s committee, and any agents  of the candidate. As table 29 shows, the amount and timing of the  independent expenditure in relation to the election dictates when and how  the independent expenditure must be reported.
In addition, according to commission and state officials, Arizona has made  changes intended to improve and clarify the process of reporting  independent expenditures, given their importance in determining  matching fund disbursements under the public financing program. For  example, these officials told us that they made a number of updates to the  office’s campaign finance system for the 2008 election to help improve the  reporting and tracking of independent expenditures and the timely  disbursement of matching funds to participating candidates. One update  required individuals or committees making independent expenditures to  report the unique identification number of the candidate that is the  beneficiary of an independent expenditure. A Secretary of State official  told us that prior to the 2008 election the beneficiary of the independent  expenditure was inconsistently identified in a text field, and there was no  systematic way to distinguish independent expenditures made on behalf of  specific candidates or ballot initiatives.
section_title: Appendix III: Information on Public Financing Programs for State Legislative Election Campaigns in Connecticut and New Jersey
paragraphs: After Maine voters passed the Maine Clean Election Act in November 1996  and Arizona voters passed the Citizens Clean Elections Act in November  1998, a similar public financing law (Connecticut’s Act) was introduced in  the Connecticut state legislature in October 2005 and enacted in December  2005, establishing the Citizens’ Election Program. Connecticut’s Act  established an optional financing program for candidates for the state  legislature beginning in 2008 and certain additional statewide offices  beginning in 2010 to use public funds to finance their campaigns as an  alternative to traditional fundraising means, such as collecting  contributions from individuals or political action committees. In addition,  the New Jersey Fair and Clean Elections Pilot Project was enacted into  law in August 2004 and the 2007 New Jersey Fair and Clean Elections  Pilot Project Act was enacted into law in March 2007. These acts  respectively established pilot projects offering optional public financing of  campaigns for candidates seeking election to the General Assembly from  certain legislative districts for the 2005 election and for candidates seeking  election to the General Assembly and the Senate from certain legislative  districts in the 2007 election.
Detailed information is available on the Web sites of the state agencies  responsible for administering the respective programs—Connecticut’s  State Elections Enforcement Commission (SEEC)  (www.ct.gov/seec/site/default.asp) and New Jersey’s Election Law  Enforcement Commission (www.elec.state.nj.us).
subsections: section_title: Connecticut’s Public Financing Program
subsections: section_title: Purpose of Connecticut’s Public Financing Program
paragraphs: Connecticut’s Act established the Citizens’ Election Program, which  offered full public financing for participating candidates for the House of  Representatives and Senate of the state legislature, also known as the  General Assembly, beginning in 2008, and will expand to certain statewide  offices, such as governor and attorney general, beginning in 2010.  Connecticut’s State Elections Enforcement Commission (SEEC) outlined  the following goals of the public financing program:  to allow candidates to compete without reliance on special interest  money,  to curtail excessive spending and create a more level playing field  among candidates,  to give candidates without access to sources of wealth a meaningful  opportunity to seek elective office in Connecticut, and  to provide the public with meaningful and timely disclosure of  campaign finances.
section_title: Requirements of the Public Funding Program in Connecticut
paragraphs: In Connecticut, candidates for the state legislature who wish to receive  public funds for campaigning must qualify by, among other things, (1)  raising a certain total amount of money, in amounts between $5 and $100,  in qualifying contributions from individuals, and (2) collecting a certain  number of these qualifying contributions from individuals who reside in  the district for which the candidate seeks legislative office, as shown in  table 30. In addition, candidates can contribute a limited amount of  personal funds to their candidate committees before applying for the  initial distribution of public funds. The maximum amount of personal  funds allowed per candidate varies depending on the office sought. Any  allowable amount of personal funds a candidate contributes is not  considered as part of the qualifying contributions, and reduces the initial  distribution by a corresponding amount.
After meeting the requisite qualifications and meeting the ballot  requirements administered by the Secretary of State, participating  candidates from major political parties may receive initial distributions of  public funding as shown in table 31. Minor party candidates can receive  varying amounts of public funding depending on whether they meet  certain requirements. For elections held in 2010 and thereafter, SEEC is  to adjust the amount of public funding for legislative candidates every 2  years to account for inflation.
Participating candidates are also eligible for supplemental public funding  up to certain specified amounts, based on spending by nonparticipating or  participating opposing candidates whose aggregate contributions, loans,  or other funds received or spent exceed the applicable spending limit—the  amount of qualifying contributions plus applicable full initial distribution  for a participating candidate in that race. In addition, on the basis of  required independent expenditure reports or a SEEC determination, a  participating candidate can also receive additional matching funds, in  general, if such independent expenditures are made with the intent to  promote the defeat of the participating candidate. Such additional funds  are to be equal to the amount of the independent expenditure but may not  exceed the amount of the applicable primary or general election grant for  the participating candidate. If such independent expenditures are made by  an opposing nonparticipating candidate’s campaign, additional matching  funds are only to be provided if the nonparticipating candidate’s campaign  expenditures plus the amount of independent expenditures, exceed the  applicable initial public funding amount for the participating candidate.
section_title: Revenue Sources and Expenditures Made from Connecticut’s Public Financing Program Fund
paragraphs: The primary revenue source for Connecticut’s public financing program is  derived from the sale of abandoned or unclaimed property in the state’s  custody, such as funds left in saving or checking accounts; stocks, bonds,  or mutual fund shares; and life insurance policies. As of March 3, 2010, the  Citizens’ Clean Election Fund has about $43 million, a fund established by  Connecticut’s Act for the public financing program. In addition, the  Citizens’ Election fund receives funds from voluntary contributions and  interest earned on the fund’s assets, and if the amount from the sale of  abandoned or unclaimed property is less than the amounts specified under  state law to be transferred to the Citizens’ Election Fund, then the  difference is to be made up from corporation business tax revenues.  During the 2008 election cycle, about $8.3 million was distributed to 250  participating candidates in the general election and about $3 million was  expended for SEEC administrative costs.
section_title: Candidate Participation in Connecticut’s Public Financing Program in 2008
paragraphs: About three-fourths (250 of 343) of legislative candidates in Connecticut’s  general election participated in the public financing program, and there  was at least one participating candidate in over 80 percent of the races, as  shown in table 32.
Of the participating legislative candidates in Connecticut’s general  election, more than half, or 130 of 250 candidates, were incumbents. Of  those participating candidates who were elected to office, about 95  percent of the incumbents were elected, or 123 of 130 participating  incumbent candidates, and about 23 percent of the challengers were  elected, or 28 of 120 participating challenger candidates, as shown in table  33.
section_title: New Jersey’s Public Financing Program
subsections: section_title: Purpose of New Jersey’s Public Financing Program
paragraphs: In 2004, the New Jersey Fair and Clean Elections Pilot Project was enacted  into law and established an optional public financing program for General  Assembly candidates in two legislative districts in the 2005 general  election. Under New Jersey’s 2005 public financing program for  legislative candidates, the state Democratic party chairperson and the  state Republican chairperson each chose one district to participate in the  program. In one of the selected districts, two out of the four candidates for  the state Assembly qualified for public funds, and in the other district, no  candidates qualified. In 2007, the state legislature expanded the number  of districts covered by the program to Senate and General Assembly  candidates in three legislative districts and made several changes in the  program, such as decreasing the number of contributions each candidate  was required to collect from registered voters in his or her district.
The goals of the 2007 New Jersey Clean Elections Pilot Project are  to end the undue influence of special interest money,  to improve the unfavorable opinion of the political process, and  to “level the playing field” by allowing ordinary citizens to run for  office.
section_title: Requirements of the Public Financing Program in the 2007 New Jersey Clean Elections Pilot Project
paragraphs: To participate in the 2007 Clean Elections Pilot Project, candidates needed  to, among other things, (1) file a declaration of intent to seek certification  with the New Jersey Election Law Enforcement Commission (ELEC), the  agency responsible for the public financing program; (2) agree to  participate in at least two debates; and (3) after certification, limit their  expenditures to the amounts raised as “seed money” and qualifying  contributions, and public funds received from the fund. During the  qualifying period, candidates may accept seed money contributions of  $500 or less from individuals registered to vote in New Jersey, but in  aggregate seed money contributions may not exceed $10,000. A candidate  seeking certification must obtain at least 400 contributions of $10 (i.e.,  $4,000) to receive the minimum amount of public funds available and at  least 800 contributions of $10 (i.e., $8,000) to receive the maximum  amount of public funds. The contributions must be from registered voters  from the legislative district in which the candidate is seeking office. In  addition, if two state Assembly candidates from the same party are  running in the same legislative district, they both must agree to participate  in the public financing program to become certified and eligible to receive  public funds.
The amount of public funds received by a certified candidate depended  upon several criteria: (1) whether or not the candidate is opposed, (2)  whether or not the candidate is a major party candidate, and (3) whether  the candidate ran in a “split” district, one that, in general, was selected  jointly by members of the majority and minority parties in the legislature.  After being certified, a candidate nominated by a political party who has  also received at least 400 qualifying contributions would receive a grant  amount of $50,000 if opposed and $25,000 if unopposed. If the candidate  were running in a “competitive” district, then such a candidate could  collect funding in equal proportion to the number of remaining qualifying  contributions (after the initial 400) up to a maximum of 800 qualifying  contributions for a total amount of public funds not to exceed the average  amount of money spent by all candidates in the two preceding general  elections for those offices. If a candidate is running in one of the two  “nonsplit” districts, that is, one district selected by the members of the  majority political party, and one district selected by the members of the  minority political party, then the candidate could collect funding in equal  proportion to the number or remaining qualifying contributions (after the  initial 400) up to 800 qualifying contributions for a total not to exceed  $100,000. Qualifying contribution amounts received would be deducted  from grant amounts. For example, if a candidate raised 400 $10 qualifying  contributions, the amount dispersed to the candidate would be $46,000  ($50,000 minus $4,000 collected in qualifying contributions).
Participating candidates may also receive additional funds under certain  circumstances. When a campaign report of a nonparticipating candidate  shows that the aggregate amount of contributions exceeds the amount of  money provided to an opposing participating candidate, ELEC may  authorize an additional amount of money equivalent to the excess amount,  up to a maximum of $100,000 to each opposing participating candidate in  the same district as the nonparticipating candidate. In addition, when a  participating candidate files a written and certified complaint to ELEC,  and ELEC determines that (1) a nonparticipating candidate is benefiting  from money spent independently on behalf of the nonparticipating  candidate or that (2) a participating candidate is the subject of unfavorable  campaign publicity or advertisements by an entity not acting in concert  with the opposing nonparticipating candidate, ELEC may authorize an  additional amount of money up to a maximum of $100,000 to the opposing  participating candidate in the same legislative district who is not  benefiting from the expenditure.
section_title: Revenue Sources and Expenditures for the 2007 New Jersey Clean Elections Pilot Project
paragraphs: For the 2007 pilot project, the New Jersey state legislature funded the  program with approximately $7.7 million from the state’s general funds. In  addition, voluntary donations, earnings received from the investment of  money in the fund, and fines and penalties collected for violations of the  public financing program are also sources of revenue. All unspent money  is to be returned to the fund. About $4 million was distributed to  participating candidates for the 2007 pilot project. According to a state  official, New Jersey’s public financing program, which contains matching  funds provisions, was not reauthorized for the 2009 elections due to both  concerns about a federal district court ruling holding that the matching  funds provisions of Arizona’s Citizens Clean Elections Act to be  unconstitutional, as well as state budget constraints.
section_title: Participation in the 2007 New Jersey Clean Elections Pilot Project
paragraphs: In the 2007 Pilot Program, 16 of the 20 legislative candidates running for  office in the three legislative districts participated in the program, and  every winning candidate participated. Two of the 16 participating  candidates received funds in addition to their initial distribution of public  funds due to independent expenditures made on behalf of opposing  nonparticipating candidates.
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Mary Catherine Hult, Assistant  Director; Nancy Kawahara; Geoff Hamilton; Tom Jessor; Grant Mallie;  Heather May; Amanda Miller; Jean Orland; Anna Maria Ortiz; Doug Sloane;  Michelle Su; Jeff Tessin; Adam Vogt; and Monique Williams made  significant contributions to this report.
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