monopoly_money.jpgA report by the city’s Ethics Commission says it expects each of the nine major mayoral candidates to qualify for, and opt into, San Francisco’s public financing program. The commission expects this program will end up costing the city $8.1 million over the next few months.

The city has thus far doled out $1.67 million to various candidates in the race. City Attorney Dennis Herrera leads the pack, having received $475,000. Trailing Herrera are Supervisor Bevan Dufty with $471,000, Supervisor Michela Alioto-Pier with $332,000, and Sen. Leland Yee with $246,000. Supervisors David Chiu and Tony Hall are tied with venture capitalist Joanna Rees at $50,000. Supervisor John Avalos’s contributions have yet to be made available and Assessor Phil Ting hasn’t raised enough money at this time to quality for city funds.

Once a candidate raises the $25,000 needed to qualify, every dollar they receive in contributions from San Francisco residents above that level will be matched by four dollars in public funds. The city’s contribution to any campaign is maxed out at $900,000.

Once participants opt into the program, they are required to abide by a spending cap of $1.475 million. However, if that ceiling is broken by a candidate who has not taken pubic funds, it will then be lifted for all participants.

Interestingly, this provision may not survive all the way to the November elections. A case currently before the U.S. Supreme Court regarding an Arizona pubic financing law similar to the one in San Francisco could prohibit lifting the cap no matter how much money other candidates in the race raise. Judging by the current court’s predisposition towards funneling the maximum number of dollars into the political system under the banner of the First Amendment, there’s a very good chance the provision’s days are numbered.

Ethics Commission Director Justin St. Croix, said it’s a no brainer for any candidate who qualifies for public financing to take advantage of it. “There’s the expectation that publicly financed candidates spend less time raising money and have more time to talk to voters,” he said.

A 2006 study by UC Berkeley’s Goldman School of Public Policy backs up St. Croix’s assessment. The study found that while San Francisco’s public financing program neither significantly decreased expenditures nor widened the pool of candidates (both of which were among the program’s goals), it greatly reduced the amount of time candidates spent fundraising–leaving more time for them to outreach to voters on specific issues.

This election is the fist time that the city’s public financing system will be utilized in a mayoral race. Legislation instituting the public financing of mayoral races was passed by the Board of Supervisors in 2006. A similar system has been in place for supervisorial elections since 2002.

Ironically, both Alioto-Pier and Dufty voted against the ordinance when they were on the Board but are now willing recipients of hundreds of thousands of dollars in public financing.

2007 would have been the system’s first test; however, even though Gavin Newsom qualified for public financing, he chose not to opt into the program. None of his electoral opponents in that election raised enough money to qualify.

Even without personally using any of it on his campaign, Newsom was responsible for a significant depletion of the pool of money the city set aside for public campaign funding. In the waning years of his administration, Newsom borrowed $6.2 million from the fund to cover a portion of the city’s budget deficit. While he repaid a some of that money, $4 million is still outstanding. The city had to pull the money to fund public financing for the upcoming election cycle from other portions of the budget.

One of the most intriguing aspects of every major candidate accepting public financing is the case of Joanna Rees. Boasting a personal fortune in the tens of millions (not to mention a bevy of deep-pocketed friends), Rees has the assets to easily bury the rest of competition with an expensive, Meg Whitman-style style advertising assault if she opted out of public financing. But she didn’t. Her choice to take public money is an interesting testament to the strong signal opting into public financing sends San Francisco voters.

“There’s…[an] assumption that publicly financed candidates are not as beholden to their supporters,” says St. Croix. In an election that’s likely to come down a small number of votes, that independence is a perception that no candidate can afford to lose.

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