The Case Against Public Financing: A Manifesto

To a certain type of Goo-Goo liberal, public financing of elections seems like a splendid idea.

It isn’t. Here is why:

The New York Example
I’ve worked perhaps even more extensively in New York politics, where City Elections are publicly financed, than in Maryland. From my reading of the bill, it appears based upon the system used to finance New York City Council races. This isn’t a good thing.

In New York State Assembly races, you can effectively finance a campaign with the support of four donors. If you happened to be running for New York City Council, you need the support of hundreds of small donors to reach the match threshold to run an effective campaign. So candidates for City Council are forced to do congressional candidate level hours of call time (20-30/week).

I remember one of the most successful fundraisers in Democratic Politics once asked me whether I’d rather ask a  thousand people for a dollar, or one person for a thousand dollars. The answer for a candidate is obviously the second one.

I’m sure that if any sitting council members truly understood that come 2018, if they pass this, they will be spending six hours a day in a windowless room calling small time activists to beg for fifty dollar donations, this bill would die a swift death.

The New York State Legislature understands this perfectly well.

I remember having a long phone conversation with one of the head lawyers for the New York Senate Democrats on this topic. He vividly related to me the story of how he told the children of Billionaire Financier George Soros that no amount of money was going to buy him a public financing law. Why you ask?

Because most term limited New York City Councilman end up in Albany and will never go back to the nightmare that is raising small dollar donation for matching funds.

The Colorado Example
In Colorado, the max out donation is $400. Typically, a targeted State Senate race in Colorado maxes out at $200,000. (This cycle they will likely hit $225,000). However, $750,000-$1,000,000 is typically spent by the Colorado Senate Democratic Majority Fund in independent expenditure. This means that the real fundraising campaigns happen outside of the campaigns themselves.

Divorced of a candidate’s name or approval, this translates into lots of nasty, negative, no holds barred political advertising. To me this bill seems like a final attempt by Phil Andrews to kneecap Montgomery County business and union interests. While I find this a vile prospect, Phil’s plan is doomed to failure. At the end of the day, Real Estate Developers and Labor Unions are savvy people. They shall do in Montgomery and circumvent the system through independent expenditures.

The Second New York Example
Mike Bloomberg was elected Mayor of New York City as a Republican because his Democratic opponents were capped at $5  million dollars in spending while he dropped nine figures on his campaign. If you want Dana Buyer, Lou Simmons and Jonathan Shurberg on the Council–the top three self funders in Montgomery County in the 2014 Democratic Primary–please vote for this bill.

The Annapolis Example
Maryland Democrats consistently win districts that should send Republicans to Annapolis (with Democratic Performance indices giving Republicans up to a ten-point edge in many seats long held by Team Blue). This is not because we run better campaigns on the Democratic side in Maryland than anywhere in the country. We’re a decade behind New York, Virginia, California and dozens of others in that regard.

It’s because in Maryland’s one-party environment, traditional economic donors that would be inclined to support Republicans (think Comcast) donate to Democrats. Which explains why Jim Mathias, the most vulnerable Democrat in Maryland’s Senate, will face a Republican with less than $50,000 all in to spend. Mathias will have north of $300,000.

If you have Republican County Council candidates with $125,000 in the bank, Democrats should expect to have competitive general elections in districts 1, 2 and 3.

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MD-02 Tea Leaves

Dutch Ruppersberger is 68 so it’s possible he could choose to retire relatively soon. D2 is a bizarre gerrymander takes in few legislative districts in their entirety. However, it does take in all of District 6, which would position soon-to-be Sen. Johnny Olszewski well for a bid (or perhaps Delegate Eric Bromwell). While the Second does take in bits of Baltimore City, Howard and Anne Arundel Counties – none of them comprise a large enough portion of district to provide an effective base of support. I believe that any successful candidate would have to hail from Baltimore County.

I can’t tell based on a map of the 2nd district whether Senator Ed DeGrange overlaps at all in Northern Anne Arundel County. If he does, it’d likely be worth his taking a shot at this.

The Second District also includes a truly substantial portion of conservative Harford County. I believe there isn’t a large enough base of Democratic primary voters for a viable Harford based candidate to emerge. Former Mike Miller aide Pat Murray would nonetheless have been an interesting candidate if he hadn’t lost the primary in his bid for Delegate in this right-wing bastion.

Delegate Mary-Dulany James–and now Democratic senatorial nominee–might be a viable Harford candidate but I think she’s to far to the right of his D+7 district.

State Secretary of Transportation and former Baltimore County Executive Jim Smith lives in Cockeysville, which is split between MD-01, MD-03 and MD-02. He could likely raise well over $1 million dollars for a bid here. Secretary Smith is in his mid seventies though and I doubt he’d have the appetite.

Former Investment Banker and 2002 Candidate Oz Bengur might decide that the field is weak and take a crack at it.

 

Purple Line Station Downgrade, No Tunnel Under Wisc. Ave.

In closed session yesterday, the Montgomery County Council concurred with the recommendation of County Executive Ike Leggett and decided not to go move forward with the funding to facilitate redevelopment of the APEX building and a much improved Purple Line stop in Bethesda.

The Council had already greatly expanded the size of the building that could be built on the spot in the hopes of enticing the owner to redevelop or to sell to a developer. However, they balked at agreement with the roughly $70 million in costs to the County to facilitate the deal and make it economically feasible.

There are three major effects of this decision:

Less Well-Designed Purple Line Station

The Maryland Transportation Administration (MTA) had pressed the County to move forward with the APEX acquisition to allow construction of a well-designed Purple Line station. While the State now claims that the new station, projected to handle around 24,000 trips per day, will still be adequate, the failure to acquire the building requires major changes.

Passengers will need to cross the tracks–something MTA previously described as problematic but now says will be alright. Additionally, one of the platforms will have to be much smaller and the ease of accessibility to the system will decline. There will still be elevator banks for direct Purple to Red Line connections, though the entrances will need to be moved.

No Tunnel under Wisconsin Avenue

People wanting to continue on the much-used Capital Crescent Trail will have to make their crossing of Wisconsin Ave. at grade. Currently, there is a wide tunnel under the Air Rights Building that facilitates bike trips under Wisconsin Ave.

The original plans promised a new smaller tunnel under the Air Rights Building in tandem with the new Purple Line. This promise  evaporated after the project had moved on to a later stage when it became deemed to expensive.

Hope for the tunnel reemerged with the redevelopment of the APEX building. Indeed, Montgomery County government leaders expressed greater enthusiasm for the tunnel, most recently at a publicly televised debate before the Democratic primary.

The lack of a grade separated bicycle crossing will also likely anger area bicyclists concerned not just about ease of travel but public safety. The Washington Area Bicyclist Association (WABA),  has predicated its strong support on grade-separated crossings of major thoroughfares along the trail.

Less Development at APEX Site

One of the major goals of the construction of the Purple Line has been to stimulate development and economic growth, crucial to expanding the County’s tax base to pay to maintain infrastructure and services.

It will be more difficult and therefore much more expensive to tear down and construct a new larger building on the APEX site after the construction of the new Purple Line stop. As a result, it may never happen. Any redevelopment would be pushed much further into the future until (if ever) it become a profitable venture.

Conclusion

The developers working to arrange the deal (i.e. the purchase of the building from the current owners and money need to render its redevelopment economically feasible) could come back with a better set of numbers. So maybe it will all work out.

Right now, however, the County will be left will a Purple Line stop described to me as “adequate” or “functional” at best at its critical terminus and economic engine in Bethesda. It does nothing for trust in government, due to repeated broken promises from both MTA and the County over the tunnel and the politically convenient timing of these decisions.

Surprise! Silver Spring Transit Costs Up Again

Silver Spring Transit CenterThe costs of the Silver Spring Transit Center are set to rise by significant amounts again in 2014:

The additional expense could be considerable. Since early summer, contractors have drilled and excavated portions of the structure to install additional supporting steel. The “cap ties” are intended to strengthen the building. . . . Dise placed the cost of that work at about $1.6 million.

But more costly fixes are on the way. In coming weeks, workers will apply a two-inch layer of latex-modified concrete to roadways and other surfaces, a task that requires highly specialized equipment. The final major fix will be the addition of 255 strut beams to reinforce interior girders.

The new appropriation request is expected to include other costs, such as continued operation of the interim Silver Spring site for buses and fees for engineering consultant Allyn Kilsheimer, who was hired by the county to oversee the repairs.

This sort of fiasco does not exactly raise confidence in the ability of the County government to handle larger projects.

AFL-CIO Disses MoCo Council Incumbents

MD AFLIn the Democratic primary, the AFL-CIO endorsed incumbent Marc Elrich as well as challengers Beth Daly and Vivian Malloy for the at-large seats. Only Elrich won the nomination. The AFL-CIO did not endorse incumbents Nancy Floreen, George Leventhal, or Hans Riemer. They have now decided not to endorse any of these three (or anyone else) for the general election.

The AFL-CIO have also made no endorsement in District 1 (Roger Berliner), District 2 (Craig Rice), or District 3 (Sidney Katz). They had endorsed unsuccessful candidates Duchy Trachtenberg (District 1) and Ryan Spiegel (District 3).

District 4 Incumbent Democrat Nancy Navarro is their only new endorsed candidate. They had already endorsed Tom Hucker in District 5–their only other Montgomery County Council winner besides Marc Elrich.

So two-thirds of the new Council will have the election without the endorsement of the AFL-CIO in either the primary or the general election–7 out of 9 if you include the primary.

Rapid Transit at the MoCo Fair

Councilmember Roger Berliner: “There is nothing more fundamental to the future of Montgomery County than making this happen. And making it happen during the next four years.”

Councilmember Marc Elrich: “This is the best answer we have to both the need for capacity and the limited dollars available.”

Councilmember Cherri Branson: “I cannot tell you how important a bus-rapid transit system would be for Route 29 not only to alleviate some of the current congestion but even more importantly to help us develop the east part of the county.”  –

County Executive Ike Leggett: “It will happen in Montgomery County. This is the right thing for our future.”

Public Financing in MoCo

PF AtLarge PF DistrictPF Exec

The Cost and Impact of Public Financing

Montgomery County has moved closer to adopting a public financing system for county elections with approval of the bill by the Government Operations and Fiscal Policy Committee. As the Council packet explained, the bill proposed by retiring Councilmember Phil Andrews would encourage candidates to raise money in small amounts.

A candidate would need to obtain a specific number of small contributions from a County resident of between $5 and $150 in order to qualify for public funding. Each of these qualifying contributions must be received within 365 days before the primary election and at least 45 days before the primary. A candidate for Executive would need to collect at least 500 qualifying contributions and an aggregate total of at least $40,000 to qualify. A candidate for At-Large Councilmember would need 250 qualifying contributions and an aggregate total of at least $20,000. A candidate for District Councilmember must collect at least 125 qualifying contributions and an aggregate total of at least $10,000.

A candidate for Executive certified to receive public funding would be eligible for a matching contribution of $6 for each dollar of a qualifying contribution for the first $50 of the contribution; $4 for each dollar of the second $50; and $2 for each dollar of the third $50. The match for a candidate for Councilmember would be $4 for each dollar of the first $50, $3 for each dollar of the second $50, and $2 for each dollar of the third $50. . . . The maximum public contribution for a candidate for Executive would be $750,000 for the primary and $750,000 for the general election. The maximum public contribution for At-Large Councilmember would be $250,000 and the maximum public contribution for each election for District Councilmember would be $125,000.

A candidate who voluntarily accepts a public contribution must pay for all campaign expenses with the qualifying contributions, the matching public contributions, and a personal loan from the candidate and the candidate’s spouse of no more than $6000 from each.

But the really interesting part–the impact on the candidate funds–was placed at the far end of the report and has been highlighted in the screenshots at the top of the post. A key caveat in any examination of the Council analysis–and indeed, the point of the system–is that some candidates would change their behavior in response to the new incentives. So take these projections of its impact with a dollop of sour cream.

Would the Bill Achieve Its Goals?

The reason that the presidential public financing system died was the ability of candidates to raise far in excess of the amount available through the system. The rise of expenditures by outside groups and their legalization by the Supreme Court has also contributed to the demise of the system.

Not all candidates would necessarily want to participate in the system. The Council Staff report explained that only two district candidates and one executive candidate could have raised more through the proposed system than they raised without it. On the other hand, three of four at-large candidates could have raised more through the public financing system. Over time, the incentive to participate could decline and even disappear as in presidential elections. It will have no impact on candidates who can afford to self-finance their own campaigns.

Another issue that the bill cannot address is the participation of outside groups. Though the incentives to participate in the public financing system could constrain large donations and the total amount spent, it has no impact on expenditures by outside groups from MCGEO to the Koch brothers.

Moreover, it is not fully clear to me that it would necessarily level the playing field for candidates. In some cases, it might increase the advantage of incumbents or the person who has raised the most money. Challengers or less-well funded candidates might still like it because the initial dollars are the most crucial to viability. The marginal impact of expenditures tends to decline as the amount spent rises.

Some final potential quirky effects. First, potential donors might like if they cannot give such large amounts because they would not be asked to write such large checks. Second, candidates may perversely have to spend more time raising money if they have to raise it in small amounts rather than in large chunks from fewer people. The problem will get worse over time unless the limits are adjusted for inflation, like the federal limits in the Bipartisan Campaign Reform Act (a.k.a. McCain-Feingold).

The Next Mayor of Gaithersburg

In October, the Gaithersburg City Council will meet to appoint a new Mayor, as longtime chief executive Sid Katz awaits his uncontested elevation to the County Council.  After reaching out to my vast network of spies the following council members appear to be interested in pursuing the top job.

Jud Ashman – The early favorite would appear to be Councilman and Small Business Owner Jud Ashman (Republican turned Independent turned Democrat). He likely starts out with Cathy Dryzugla’s vote, meaning he needs only one other council member to reach a majority. However, this is made a bit more complex by the fact that everyone else on the Council appears to display at least some interest in running for Mayor.

Henry Maraffa – The last Republican on the Council is Real Estate Developer Henry Maraffa. He’s probably a bit to conservative to be elected Mayor today.

Mike Sesma – The only minority elected official in a rapidly diversifying municipality certainly cuts an appealing profile. He would need to convince Henry (who I suspect would  be more inclined to back ex-Republican Jud if he opts out of the race) and Ryan (who I believe would lean towards Mike naturally) over Ashman.

Ryan Spiegal- Coming off of a hard fought county council primary in District 3, Ryan Spiegal might be more interested in some well-deserved downtime. If not, the Democratic stalwart (despite an impeccable resume) faces a challenging path to the magic number of three votes.

Whomever the appointed Mayor is, I would be truly surprised if they didn’t face a spirited challenge for the seat in November 2015, either from a councilmember who lost on the appointment or from someone else in the community. The strongest contender, in my observant opinion, would be Montgomery County Young Gun Dan Campos. Campos is a dynamic Latino Businessman and ex-Capitol Hill Staffer who would give any councilman appointed Mayor a serious challenge.

 

MCDCC Ballot Questions Meeting

MCDCC precinct officials who attend the ballot questions meeting on September 17th at 7pm will help decide the Montgomery County Democratic Party’s positions on ballot questions. The information says that hearings were held at an earlier meeting, so I assume that

The procedure for determining the party’s position is somewhat complicated. The precinct officials vote on each question after hearing the recommendations of the ballot questions committee. [UPDATE: The ballot questions advisory committee no longer makes recommendation. This is a positive change as its membership, and thus decisions, can be idiosyncratic. Thanks to Paul Bessel for the correction.] They can vote to take a position for, against, or no position. If a majority of Central Committee members disagree with an affirmative or negative position taken by the precinct officials, they can change the recommendation to no position.

The meeting will be held in the Maryland Room, Clubhouse 1, Leisure World (3700 Rossmoor Blvd, Silver Spring, MD 20906. Click here for Directions to the Meeting.) Note: Leisure World is a gated community so you’ll be stopped and have to explain why you’re going there if you don’t live in Leisure World.

The actual questions should be less heated than the last time around when the MCDCC took a position in favor of giving the police chief more flexibility in the management of police by eliminating effects bargaining. All members of the County Council supported this decision but the FOP and other government employee unions opposed it vehemently.

Click here to download the 2014 Ballot Questions Report
Click here for more information about the Sept. 17th Meeting.

Why Do Light Rail Costs Only Go Up?

The Washington Post reports that cost estimates for the Purple Line in the DC suburbs have risen by $56 million while the Red Line in Baltimore now is estimated to cost another $220 million. Total cost estimates for the Purple Line are now $2.43 billion–more than double the original cost estimates. As with the previous increase, the State must foot the entire bill for the change.

MTA decided not to publicize the cost increase:

Henry Kay, who heads transit project development for the state, said the MTA didn’t publicize the increase because it was considered a “minor adjustment” on such a large, complex project. He said the additional costs came from refined estimates based on more detailed engineering and still-rising real estate prices.

“It doesn’t reflect some faulty approach” to cost estimating, Kay said. “It’s just the nature of a mega-project being developed over a number of years.”

Except that, as recently as March, Henry Kay also claimed that ““We have a high level of confidence” when they released their previous estimates. Moreover, as I pointed out in a previous post, the continual errors in one direction are highly suspicious:

The excuse that cost estimates have risen because the earlier estimates were only rough estimates is suspicious if only because cost estimates have always increased. They never decline. If the estimates are unbiased, the errors shouldn’t be off only in one direction.

Put more bluntly, if MTA is being straight with us, why have the costs continually risen instead of sometimes going down instead of up? And these changes have occurred even as they have tended to take out expensive features, such as the promised continuation of the Capital Crescent Trail through the Purple Line tunnel.

It would be useful to hear the Montgomery and Prince George’s County Councils debate what project they would give up to pay for the latest increase in costs even as they figure out how to pay for their share of the project. The Montgomery County Council still has to figure out how to pay for the trail–whose costs have also doubled to $95 million.

The County Council also to convince the owner of the APEX building in Bethesda to tear down the building so the station can be built there–something the County is rightly working hard to accomplish (it’s the right place) but will also take money.

Will the next increase break $2.5 billion? One question we should’ve asked long ago: at what point does this project in the form of light rail become too expensive, especially since (1) the CCT has already been transmuted from the previously promised light rail into BRT; (2) Montgomery County is planning a countywide BRT system; (3) MTA’s own estimates showed BRT as much more cost effective; and (4) we have many pressing transportation needs, including other public transit investments and the maintenance of existing infrastructure (e.g. Metro and MARC) to make.

Maryland Politics Watch

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