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To the limit: how Austin caps campaign finance

Tuesday, July 19, 2016 by Audrey McGlinchy, KUT

Candidates for the five City Council districts scouting for new or incumbent leadership filed their first campaign finance reports Friday. And while we’re still in the very initial months of fundraising, some races have begun to resemble the tale of David and Goliath – financially speaking, that is.

While Council Member Don Zimmerman’s competition for the District 6 seat, Jimmy Flannigan, pocketed nearly $47,000, the incumbent’s campaign coffers have seen just over $36,000 in contributions. have yet to see any new deposits. Meanwhile in District 7, a roughly $12,000 gap exists in between incumbent Council Member Leslie Pool and challenger Natalie Gauldin’s contributions.

But the races in Districts 2 and 4 are the most financially disparate. Incumbent Council Member Delia Garza towers over her two challengers Casey Ramos and Wesley Faulkner. Among all the candidates, District 4 Council Member Greg Casar has raised the most – nearly $80,000 – while his opponent, Louis Herrin III, collected and spent nil.

While Casar’s $80,000 is a good showing at this early stage of fundraising, it’s pennies compared to the last local election numbers we saw, when the Ridesharing Works for Austin – an Uber- and Lyft-funded political action committee – spent just over $9 million. That’s because different rules govern each process. Fundraising for a ballot campaign is much more free-form. Campaign finance for candidates looks something like this:

Contributions

The city caps individual contributions to Council and mayoral candidates at $350. (Political action committees are considered “persons,” and so this limit applies to them as well.) Corporations cannot donate to these campaigns, per state law. There’s no limit on the total amount of individual contributions from Austin voters – but outsiders are subject to a ceiling: no more than $36,000 from non-Austin voters. A letter sent to Council members from the Office of the City Clerk in May reiterated contribution limits:

(1) No candidate for Mayor or City Council and his or her campaign committee shall accept campaign contributions in excess of $300 (see below for current index amount) per contributor per election from any person, except for the candidate and small-donor political committees. The amount of the contribution limit shall be modified each year with the adoption of the budget to increase or decrease in accordance with the most recently published federal government, Bureau of Labor Statistics Indicator, Consumer Price Index (CPI-W U.S. City Average) U.S. City Average. The most recently published Consumer Price Index on May 13, 2006, shall be used as a base of 100 and the adjustment thereafter will be to the nearest $50.00. (Using the current CPI, the campaign contribution limit amount is modified to $350.00.)

A candidate can also contribute (or, loan) personal funds to his or her own campaign. There is no limit on the amount. During his 2014 campaign, Mayor Steve Adler loaned himself more than $400,000.

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Otherwise, there are few limits on the total amount of contributions – unless, of course, the candidate has signed Austin’s Fair Campaign Finance contract.

A lawsuit filed by Zimmerman challenging the limits is currently awaiting a judge’s decision. The lawsuit claims that both the per-person $350 limit and the $36,000 “outsider” limit “makes it difficult for Zimmerman to amass sufficient funds to engage in communications such as direct mail advertisements to constituents/district voters, and television and radio advertisements, which are necessary to mount an effective campaign, as well as other campaign activities.”

Expenditures

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There are no limits on expenditures (again, unless the candidate has signed Austin’s Fair Campaign Finance contract). There are certain reporting requirements, though: A candidate must report expenditures made on his or her behalf, unless the candidate was unaware or did not consent for a person or committee to spend on behalf of his or her campaign. So, if a PAC spends $500 on signs for a candidate without that candidate knowing, that PAC itself must report the expenditure.

Code Section 2-2-32 et seq. requires special reporting of such independent expenditures. A form identified as Schedule ATX 1 “INDEPENDENT EXPENDITURES NOT BY A CANDIDATE” must be filed with the City Clerk’s office by every person other than a candidate or a candidate’s committee who expends a specified aggregate amount during any calendar year to promote the election or defeat of any candidate in a City election. Such form must be filed within the deadlines specified in the cited Code section.

Political Action Committees (PACs)

Although PACs are treated as individuals – and are therefore subject to the $350 cap – there is only one limit on how much money candidates running for Council or mayor can accept from a PAC. And that’s when the PAC is considered a small-donor committee. The city defines it this way:

A small-donor political committee is a political committee which has accepted no more than $25 from any contributor during any calendar year, has had at least 100 contributors during either the current or previous calendar year, has been in existence for at least six months, and has never been controlled by a candidate.

A candidate can accept only up to $1,000 from a small-donor PAC. Otherwise, have at it, would-be Council members and mayors.

This story is the result of a partnership between the Austin Monitor and KUT News. It has been corrected to accurately reflect contributions to Zimmerman’s campaign and the District 2 race so far.

Photo by Jorge Sanhueza-Lyon/KUT.

A complete list of Austin Monitor donors can be found here.

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