Legislature(2007 - 2008)CAPITOL 106
03/15/2008 11:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HJR37 | |
| HB374 | |
| HB261 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 374 | TELECONFERENCED | |
| += | HB 261 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | HJR 37 | TELECONFERENCED | |
HB 261-PUBLICALLY FINANCED ELECTIONS 12:11:59 PM VICE CHAIR ROSES announced that the last order of business was SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 261, "An Act establishing a program of public funding for the financing of election campaigns of candidates for state elected offices, to be known as the Clean Elections Act." 12:12:11 PM REPRESENTATIVE COGHILL moved to adopt the proposed committee substitute for sponsor substitute (CS) for SSHB 261, Version 25- LS0929\M, Bullard, 2/21/08, as a work draft. REPRESENTATIVE GRUENBERG objected for discussion purposes. 12:12:55 PM SUZANNE HANCOCK, Staff, Representative Gabrielle LeDoux, Alaska State Legislature, testified during the hearing on SSHB 261 on behalf of Representative LeDoux, prime sponsor. She stated that to her knowledge, the only change made in Version M was to replace all references to "clean elections" with "publicly financed elections." 12:13:26 PM REPRESENTATIVE GRUENBERG removed his objection, therefore, Version M was before the committee as a work draft. 12:13:44 PM REPRESENTATIVE GARDNER, Alaska State Legislature, as sponsor of SSHB 261, said she thinks there is broad support among the public for the proposed legislation. She said she is a believer in the initiative process and the committee process, and "any kind of policy change like this really needs the support and the detailed look that the committee process brings to it." 12:14:30 PM ERIC EHST, Director, Clean Elections Institute, told the committee that the institute was set up to monitor the implementation of "clean elections" in Arizona. He said he would address "some of the common questions and concerns, ... the urban legends that have grown up around public financing." He stated that Arizona has had public financing for four election cycles, having passed its [Clean Elections Act] in 1998 and begun the system in 2000. The system has grown in usage each year, up to the point where, in 2006, over 60 percent of eligible candidates used the system, with a projected usage in the 2008 election of up to 70 percent, he reported. Nine of the eleven current statewide officers, including the governor's secretary of state and attorney general, have been elected using the system, as have 38 of the state's 90 sitting legislators, he noted. MR. EHST said the system has been successful, there have been no problems in its implementation, and it is publically popular. The latest survey conducted by a nonpartisan organization shows that 81 percent of registered voters said they thought the system was important for the state. In the ten years since the Clean Elections Act was adopted, voter participation has increased; the 2006 election had the highest voter turnout for a nonpresidential race since 1982. Furthermore, the Act has increased the number of people who participate financially in the process through giving the $5-dollar qualifying contributions to candidates. The number of people who have received some financial contributions has increased exponentially. 12:18:02 PM MR. EHST turned to the issue of misperceptions related to the Clean Elections Act. The biggest question, he noted, is whether the Act results in a free ride for candidates, allowing them to get the public money and spend it on anything they want without being accountable. Mr. Ehst debunked that myth by relating that Arizona's system has set up much more accountability than there ever was in the campaign finance system prior to the Act. He backed that up by relating stories of candidates that did not qualify. He said the donated money must be spent for "actual campaign purposes" and at fair market value. Any complaints are investigated, and any fines or penalties come out of the candidates' pockets. 12:22:03 PM MR. EHST talked about the equalizing character of a matching fund system. He said, "If you're running as a Clean Elections candidate and your opponent, who's a traditionally funded candidate, raises more money than you get ... from the Clean Elections system, you get matching funds to make up for that - to level the playing field." If an independent expenditure campaign sends out a mailer either in favor of a candidate's opponent or against the candidate, he noted, that candidate gets matching funds "to make up for that." He said if a candidate receives a windfall right before elections and cannot spend it on his/her campaign, that money has to be returned to the fund. He said the system works efficiently to "identify these expenditures ahead of time, as early as possible, and get the matching money out to the candidates quickly." MR. EHST brought up a case in which a candidate for governor in Maine paid her husband $100,000 out of Clean Elections funds to be a consultant for her campaign. Doing so was not illegal, but Maine is working on making it so. It is not illegal in Arizona, he added. The candidate's husband was an actual professional campaign consultant. Another concern he related was in regard to the 2006 election campaign, "where the system was voted down on the ballot ...." He said that was a special case, in which the people who ran the initiative in California "were not the actual, national, clean money people working on doing this across the country." He emphasized the control systems that are in place to make certain the system is "effective and efficient and fair to everybody." 12:25:30 PM VICE CHAIR ROSES asked Mr. Ehst if he is familiar with the Goldwater Institute Policy Report of March 28, 2006. MR. EHST answered yes. He said he has been rebutting that report. He said the report is full of data that has been distorted to "fit their conclusion," and there is little in it that is true. VICE CHAIR ROSES noted that the report found that the Arizona Clean Elections System had largely failed to live up to its stated goals - one being that there would be overall improvement in political participation. MR. EHST responded that the report's basis for saying that was primarily based on voter turnout, but the report distorted the voter turnout data to the point where it was totally unrecognizable. Mr. Ehst stated, "If you look at voter turnout by any objective measure, it has been rising steadily with each election since [the Clean Elections Act] was adopted." He reiterated that Arizona's 2006 voter turnout was the highest seen since 1982, a statistic that he noted is from Arizona's secretary of state. He said the Goldwater Institute Policy Report includes presidential years, nonpresidential years, primary elections, general elections, and even one presidential preference primary that was only for Republicans; therefore, there is no discernable trend in the data. Furthermore, he said, the report expresses voter turnout as "a percentage of voting-age population." He said that means everyone in the state over the age of 18, including very rapidly rising populations in Arizona of noncitizen immigrants and ex-felons, neither of whom can vote. He said he is sure the Goldwater Institute is not advocating that those groups be allowed to vote. He said voter turnout, as determined by the percentage of registered voters or as a percentage of voting eligible people, and by comparing like elections, has increased steadily. He added, "It has also risen significantly if you measure ... how many voters are actually giving money in the form of the $5- dollar contribution to candidates." 12:28:52 PM VICE CHAIR ROSES said another claim regarding the Clean Elections process is that it would encourage more candidates to run for office; however, the aforementioned report claims that from 2002 to 2004, the number of primary candidates for office fell from 247 to 195, the number of statewide candidates fell from 39 to seven, and the number of legislative candidates fell from 208 to 188. MR. EHST responded, "In raw number terms that's correct." He said 2002 was a record year for candidates for all offices because, simultaneously, the state was redistricting and term limits were put in play that went into effect as a result of the 2000 election. All of those factors, he explained, created a huge number of open seats. The number of candidates today is significantly higher than it was before the Clean Elections Act was adopted. He stated, "The Goldwater Institute ... - they pick the years that they want to, to make it look the worst that they can." He noted that the number of candidates who use the Clean Elections system has been rising steadily, as well. VICE CHAIR ROSES referred to the [United States General Accounting Office (GAO)] Report to Congressional Committees, dated May 2003. He read a statement from the report, which specifically references Maine and Arizona as the two states with a Clean Elections program, as follows: The average number of state legislative candidates per district race in Maine and Arizona in 2000-2002 elections were not notably different than the average for the two previous elections for '96 and '98. VICE CHAIR ROSES asked, "So, wouldn't that statement uphold the statement that the Goldwater Institute made in their report?" MR. EHST said he does not have the figures used in the GAO report, but he believes it is in error, particularly because it references the 2000-2002 elections, which actually had record numbers of candidates in Arizona. 12:32:47 PM MR. EHST, in response to a request from Vice Chair Roses, noted that the long-term trend regarding incumbency is not clear, yet the Goldwater Institute reported that incumbents are being reelected at the same rate. He said the problem is [the institute's] data only considers incumbent reelection rate in the general election, and in Arizona - particularly for the legislative seats - 26 of the 30 legislative districts "have a heavy majority for one party or the other." Any incumbent who can survive a primary challenge in Arizona is virtually guaranteed to be reelected, he relayed; however, in Arizona's 2002 and 2004 primary elections, a number of incumbents were "knocked off," and the incumbent reelection rate, which is usually in the high 90 percentile, was 73 percent in 2002 and still below 90 percent in 2004. He stated, "We do know that there are fewer uncontested ... primary races since Clean Elections, and that a number of incumbents have ... lost in primary challenges by Clean Elections-funded opponents." 12:35:27 PM VICE CHAIR ROSES asked for historical data regarding which party held the majority prior to the Clean Elections Act compared to today. MR. EHST replied that Arizona is a "fairly Republican state," and the majority has been held by the Republican Party since the 1960s, with the exception of one year in the early 1990s when the Democrat Party "took the state senate." The Republican majority still exists today in Arizona. He offered further details. 12:37:02 PM MR. EHST, in response to a question from Representative Johnson, explained that the funding of Clean Elections in Arizona is fairly unique, in that the primary funding mechanism, from which more than 60 percent of the money comes, is sourced from a 10 percent surcharge on all criminal and civil fines. The system generates a surplus of money that is then transferred to Arizona's general fund, which is currently being applied to the state's record budget deficit. He told the committee that [Clean Elections] is not a taxpayer funded system. 12:38:25 PM REPRESENTATIVE JOHNSON responded that he would hate to see a situation where the State of Alaska promoted crime to fund elections. He offered his understanding that SSHB 261 proposes that the Clean Elections would be funded publicly from the state treasury. MR. EHST, in response to a follow-up question from Representative Johnson, related that Maine's Clean Elections are financed through legislative appropriation, and the state is considering reducing the financing available to candidates, because of budget cuts. Connecticut just passed [a Clean Elections Act] by legislative action and will begin the system with its upcoming election, funding it through legislative appropriation. The pilot program for legislative seats in New Jersey is funded by legislative appropriation. Arizona is a financially conservative state, thus, it set up a system that would be self-funding. He stated, "While we ... certainly don't condone law breaking, there are plenty of speeders in the state to keep us flush." MR. EHST, in response to Representative Johnson, confirmed that it is his contention that [a Clean Elections system] has increased the number of candidates in Arizona. He clarified that although he works with activists and groups nationwide, his organization, whose mission is to monitor the implementation of the Clean Elections Act, is specific to Arizona. He said it is difficult to report the exact number of candidates, because the number varies widely by election. He reiterated that there were a record number of candidates in 2000-2002 because of the term limits and redistricting. He proffered that there were approximately 20 percent more legislative candidates in 2006 than in 1998, "which was a similar election." REPRESENTATIVE JOHNSON said, "Our fiscal note is based upon an election that happens, so I'm wondering if we can add 20 percent to the fiscal note on this." 12:42:05 PM REPRESENTATIVE GRUENBERG said it is easy to say that since "B" follows "A," therefore "A" caused "B," for example, but that is not always true, unless the situation is completely controlled and there is a causal connection shown, with no extraneous factors that could have caused the result. MR. EHST said he certainly understands and agrees with that. REPRESENTATIVE GRUENBERG said in this instance it sounds like there were at least two other factors that kicked in: term limits and redistricting. He asked Mr. Ehst if he could prove that "those two results were due to Clean Elections and not other factors." MR. EHST responded that without a scientifically pure study, it is not possible to absolutely prove one thing or another; however, he said there was definitely an effect in the 2000-2002 elections, particularly, of term limits and redistricting. He said, of course, redistricting happens every 10 years. He continued: We had, in those elections, ... fewer incumbents running for reelection. ... Because we are past the point where term limits took out a large number of incumbents at one time, we have now returned to the point where the number of incumbents running for office is essentially the same as it was before Clean Elections. The redistricting changes have now, since 2002, been worked out of the system. ... I certainly will agree that the 2000 and 2002 elections were anomalous for those reasons, which is why, when I go back and compare 2004 and 2006, back to 1996 and 1998, we can say - and I can't, again, prove absolutely - that Clean Elections is ... at least the sole cause for this, but we can say that: voter turnout is up; the number of candidates is up; the number of contested races is up; the races are closer than they used to be. ... The other influencing factors have had a chance to work their way out of the system since then. MR. EHST, in response to Representative Gruenberg, reviewed that the term limits went into effect with the 2000 election. The term limits are four consecutive two-year terms for the legislature. 12:46:58 PM REPRESENTATIVE GRUENBERG said he presumes that in the '90s there were no term limits, while now there are. He asked, "Might that not have also had the effect of what you're saying?" MR. EHST clarified that when term limits first went into affect, there were a large number of legislators who were "term-limited" and had to leave office. Since then, the number of legislative incumbents running for reelections has rebounded to be essentially the same when comparing the election years 2006 with 1998, for example. He concluded, "So, while we didn't have term limits in the '90s, it isn't really now affecting the number of legislators running for reelections any more than just the natural number of people leaving office did in the 1990s." REPRESENTATIVE GRUENBERG pointed out that the first group of legislators elected under the new term limits have yet to complete their potential full term. MR. EHST clarified that starting in 2000, the term limits were effective for anyone who had served eight years, and a number of legislators were "termed out" in the years 2000 and 2002 and had to leave office, which created a large number of open seats in those years. Since then, he said, the number of legislators who are termed out does not appear to be changing the number of incumbents running for reelection any more than natural attrition did before term limits. REPRESENTATIVE GRUENBERG explained his point is that it is too soon to tell. It will be necessary to see the data from the next two elections. MR. EHST concurred. He continued: The data that I have, as I said, shows a large turnover in those two years that is, at least for the present, rebounded to the point where the number of incumbents running for reelection is essentially the same as it was in the 1990s, prior to term limits. And I don't think that the data from 2008, from what I've seen so far, looks like it's going to be significantly different than that. 12:50:53 PM REPRESENTATIVE GRUENBERG stated, "Incumbency can breed gentrification and unwillingness to change and keep a legislature in tune with the times." He mentioned term limits, redistricting, Clean Elections, and Alaska's 90-day session and said they all "express and proceed from a general public distrust of the legislature." He said the Institute of Governmental Affairs (IGA), in California, is a think tank connected with the Political Science Department at California State University Berkley that has studied the effect of term limits in California and the effect on the balance of power. Representative Gruenberg stated his belief that there is a value in incumbency, "because a strong legislature is important for a good balance of power and to ensure that the people are represented properly." He asked Mr. Ehst to comment regarding whether or not part of the Clean Elections proposal is to get a greater turnover in the legislature, and whether there may be problems in doing so from a systemic, institutional, or constitutional point of view. MR. EHST said he is not testifying as an advocate of term limits, and the purpose of Clean Elections is not to force incumbents out of office. He named the two primary purposes of Clean Elections: to reduce the influence of special interest money in the process of selecting elected officials; and to increase competition by giving more candidates the financial means to run for office. The incumbent reelection rate is not really a good measure of whether or not "Clean Elections is doing its job." Good measures include the number of candidates and whether or not voters are responding. 12:55:18 PM VICE CHAIR ROSES referred to the findings in the bill and cited the first sentence, [on page 1, lines 6-8], which read as follows: The legislature finds that providing a voluntary public financing system for all primary and general state elections would enhance democracy in the state in the following principle ways: VICE CHAIR ROSES highlighted one of those ways, [on page 1, subsection (1), lines 9-11], which read as follows: (1) it would affirm the principle of "one person, one vote," reduce the disproportionate and deleterious influence of large contributors, and restore the rights of citizens of all backgrounds to equal and meaningful participation in the democratic process; VICE CHAIR ROSES highlighted another of the ways public financing would enhance democracy, as written in the bill [on page 2, subsection (4), lines 1-3], which read as follows: (4) it would diminish the public perception of corruption, strengthen public confidence in democratic institutions and processes, and eliminate the danger of corruption caused by the private financing of election campaigns; VICE CHAIR ROSES asked Mr. Ehst if he agrees with those findings. MR. EHST responded that that is the goal, "to eliminate that influence - ... whether it's subconscious or not - on the system." VICE CHAIR ROSES asked Mr. Ehst if his group has conducted any surveys to ascertain whether or not the public feels that [Clean Elections] has "indeed accomplished that objective." MR. EHST replied that his group has not, but the state commission that runs the program has. He said he did not bring that report with him. He said the commission conducts an annual survey of registered voters through a well-established, nonpartisan survey organization. VICE CHAIR ROSES mentioned a United States General Accounting Office Report to the Congressional Committees on Campaign Finance Reform - a report regarding publicly funded elections. In it, 2002 survey results show that when asked if Clean Elections increased their confidence in the public process, 8 percent of those surveyed in Maine and 15 percent of those surveyed in Arizona answered yes. VICE CHAIR ROSES asked Mr. Ehst if he finds those statistics surprising. MR. EHST responded that he does not find the public perception surprising considering that when that survey was done in 2002, there had been one election conducted in both Maine and Arizona, and in Arizona, only about 25 percent of the candidates used the system. There was very little experience with the system at that point. He said quantitative effect on public policy is difficult to prove, because it is hard to track how taking special interest money out of the campaign process actually affects legislation. VICE CHAIR ROSES next read a quote from the 2007 Maine Commission on Governmental Ethics and Election Practices - a report on Maine's Clean Elections Act - as follows: Candidates are quite critical of the growth in independent expenditures made by political action committees and political parties. It is important to remember that the public funding cannot be a panacea for all ills of the electoral system. VICE CHAIR ROSES noted that the commission reports it saw no change in the public's confidence related to big money influence as a result of Maine's Clean Election Act. He asked Mr. Ehst if he finds that surprising. MR. EHST answered no. He said independent expenditures are a free speech issue and occur in all campaigns, whether or not the candidates are publicly financed. Furthermore, the amount of independent expenditures is rising exponentially across the country in races everywhere. He remarked that Clean Elections provides candidates who run "using the system" with additional funds to level the playing field, if they are the targets of independent expenditures. VICE CHAIR ROSES said he appreciates that and is not trying to be argumentative. He explained: When someone states that the main purpose of the bill is to accomplish those two objectives, and we have two reports that actually clearly state from surveys that were done that it indeed did not accomplish those objectives - and one being from 2007, it gives me a little bit of pause as to whether or not we're going to have that same opportunity in this state to claim that it's going to make that kind of a change when history shows in the other states that it didn't. 1:02:37 PM REPRESENTATIVE JOHNSON asked what the contribution levels and limits in Arizona were prior to the adoption of its Clean Elections Act. MR. EHST responded that Arizona has some of the lowest individual contribution limits in the country, put in place by citizen initiative in the 1980s, with built-in inflationary factors. He noted that in 2008, the amount of money that a legislative candidate can take from any individual is $390. He related that there is no limit on the aggregate amount that a candidate can collect or spend on his/her campaign, but the limits apply to contributions from individuals and PACs. Arizona does not allow any corporate or business contributions to candidates. In response to Representative Johnson, he said the contribution limit for a "normal" PAC is the same as for an individual, but offered his understanding that "super" PACs can give about $1,700. He noted also that Arizona has a limit on the amount of contributions that a candidate can collect in aggregate from PACs. 1:05:34 PM REPRESENTATIVE JOHNSON asked Mr. Ehst to talk about third-party expenditures. MR. EHST responded: If you had asked me in 2002 or 2004, I would have said independent expenditures were going down because of Clean Elections, because ... committees knew that if they made these expenditures targeting Clean Elections candidates, ... the Clean Elections candidates would get matching funds. In 2006, it appears that they rebounded it, at least to some extent, but I can't quantify it. ... We don't have a reporting system that ... allows us to know how much in aggregate there are in independent expenditures ... or in what races they're made. The only ... place where we could see it would be to look at the ... actual matching funds given to Clean Elections candidates. REPRESENTATIVE JOHNSON asked if the increase in voter turnout, previously noted by Mr. Ehst, had been "adjusted for population." MR. EHST answered yes. He clarified, "When I say, 'increase in voter turnout,' I'm not speaking in ... broad numbers of voters turning out, although that has increased rapidly." He stated that under both the percentage of registered voters and the number of people eligible to vote, the voter turnout has increased significantly in "like elections." In response to a follow-up question from Representative Johnson, he reported that the official voter turnout number for Arizona's 2006 general election was 60.47 percent - the highest since 1982. That number, in 1998, the last election before the Clean Elections Act was adopted, was 46 percent. 1:08:58 PM VICE CHAIR ROSES asked if there were any "hot topic" issues that were on the ballot then. He relayed, for example, that any ballot issue having to do with the permanent fund dividend would bring increased numbers of voters. MR. EHST responded that Arizona has a large number of ballot measures on the ballot in every election. He reiterated his comments regarding the steady rise of voter activity since the adoption of the Clean Elections Act. 1:10:35 PM REPRESENTATIVE GRUENBERG recollected that Arizona is part of the Sun Belt and Baby Boomers turning 61, and others are moving to Arizona in increasing numbers. He asked if that may be one reason that the numbers are increasing. He noted that seniors tend to vote more. MR. EHST said he cannot answer that question in quantitative terms. Notwithstanding that, he said Arizona has been part of the Sun Belt for many years now. He said he does not believe that the state's population is significantly older now than it was in 1998. He said Arizona also has a lot of young people moving to the state, as well. REPRESENTATIVE GRUENBERG asked if any studies have been conducted to determine whether people who move to the sun belt tend to vote more than the people who are already there, perhaps because they may be more upwardly mobile or more inclined to be civically involved. MR. EHST said he doesn't know that such a study has been done. He noted that Latinos are rapidly becoming an increasingly larger part of Arizona's population, and national statistics show that that group tends to vote in lower numbers than the rest of the population. In response to a follow-up question from Representative Gruenberg, he explained that Arizona has a few majority/minority districts where Latinos and Native Americans are concentrated, and the number of Latino candidates and voters has not increased significantly after the adoption of the Clean Elections Act. REPRESENTATIVE GRUENBERG said because of the "Motor Voter Act," over the past 10-15 years there have been a lot of names that have not been accurate on voter rolls. He asked Mr. Ehst if Arizona has taken steps to "cleanse that roll," which would increase the percentage of voters by lowering the denominator when the out-of-date names are removed from the list. MR. EHST confirmed that the state has done so, to some extent, several times over the course of time. However, he said that has not changed the number of voters on the rolls enough to change the trend in voting. He said George Mason University conducts a good academic study nationwide of voter turnout, and that data - using the definition of voting eligible population, which is not related to how money people are actually on the voter rolls but by using census data to determine how many people in the state actually could vote - shows that voter turnout in Arizona has been rising steadily, as well. 1:18:15 PM REPRESENTATIVE JOHNSON recalled that it is Mr. Ehst's opinion that Clean Elections increases the number of candidates that run for office, but others argue that it does not. He stated that if there is an increase, then the fiscal note is wrong. He added, "And if it doesn't increase the number of candidates, then that is an argument that we should be making, in terms of participation on this bill." 1:19:02 PM REPRESENTATIVE GRUENBERG described a loophole regarding fundraising. He suggested that ratcheting down spending may favor incumbents more, because their challengers could not raise the money to get the publicity to get the incumbents out of office. If the challenger feels the only way to get a message out is by not going after public funding, the situation becomes worse, "because then the public funds the incumbent's race entirely," he said. MR. EHST said he is not sure he understands the question. Notwithstanding that, he said adopting a public financing system does not prevent any candidate from raising funding the traditional way, and allowing candidates to qualify for public financing does not decrease the amount of money that any candidate is getting. 1:20:53 PM VICE CHAIR ROSES explained that Representative Gruenberg had been referring to SSHB 261, which proposes a limitation on expenditure, which may not be the case in Arizona. MR. EHST offered his understanding that in every state that offers public financing, the candidate who receives it signs a contract that promises he/she will not spend any more money than he/she gets from the public fund. He continued: Now, that goes back to the setting of the amount that a candidate receives to run for office. It has to be a fair amount to run a campaign. And also, you have the matching funds or equalizing funds, that if they are out-spent by an opponent or if there is an independent expenditure working against them, they get extra money to make up for that. There is a limit on that, otherwise you could potentially break the bank. ... What we have seen in Arizona is that [in] 90-95 percent of the races, ... the expenditures for all candidates fall within the amount of funding that a Clean Elections candidate gets from the system - either the initial funding that they get or the additional matching funds that they get. MR. EHST said there have been a few instances where there has been a candidate who has gone out and raised a huge amount of money, far surpassing the Clean Elections spending or matching funds limit, thereby outspending his/her opponent. He offered details of just such an occurrence in Arizona's 2006 election. He said he has spoken with several candidates who have told him losing in that manner was okay, because without the Clean Elections public funding, they never would have been in the race in the first place. He said the system cannot make up for that kind of funding, and no system ever will. 1:24:46 PM REPRESENTATIVE JOHNSON described a hypothetical scenario in which one party ran an advertisement that promoted its own party and put down another. He asked if that would qualify every candidate in the other party for matching funds. MR. EHST answered not necessarily. He said, "That's one of the things that we have wrestled with in refining the system." He said there is an exception built into Arizona law that allows political parties to make expenditures for "slate cards" which list a particular party's candidates. He stated: Both parties have ... tried to make end runs around the Clean Elections law by producing slick, 12-page mailers that are all about a particular candidate and why this particular candidate is wonderful. And on the back page, in 10-point type, it lists two other candidates' names. ... We have now put into the Clean Elections administrative rules a very tight definition of what fits into that exception, and candidates do get matching funds for political party expenditures that ... do blatantly either support one of their opponents or attack them. VICE CHAIR ROSES told Mr. Ehst that he has represented the issue well. 1:28:29 PM TIM JUNE, Chair, Alaskans for Clean Elections, said Alaskans for Clean Elections is the group forwarding the Clean Elections Initiative. He said Alaskans for Clean Elections adopted an number of the recommendations in Maine's 2007 report. The initiative proposes that any group spending more than $500 would have to report to the Alaska Public Offices Commission (APOC) and state whether the expenditure was either for or against a particular candidate. There would be an appeal process, in case a candidate disagrees that the independent expenditure was "either for or against them." MR. JUNE, in response to Representative Johnson's comments about the need to increase the fiscal note, said he thinks the fiscal note was based on Maine's Clean Elections Act specifically. He said the system requires three or four election cycles "to really come into its own." In Maine, the first election cycle showed about 33 percent participation, by the second cycle it increased to 67 percent, and by the third cycle, the number grew to about 81 percent candidate participation in Clean Elections. MR. JUNE, in response to a comment by Representative Gruenberg regarding the level of spending in political races, said he does not have any hard facts and figures, but thinks it could be agreed upon that in terms of a typical election cycle in Alaska, out of the 50 legislative races in each cycle, there are probably only eight to ten of those that are truly competitive when comparing dollar-for-dollar expenditure. He said Clean Elections brings out the opportunity for candidates to use Clean Elections funding. He predicted there would be more competitive races. He echoed Mr. Ehst's statement that the point of Clean Elections is not to replace incumbents, but to give whoever wins, if they are able to use the Clean Elections system, "a somewhat arm's-length distance, in terms of not having special interest influence or the influence of private donors." 1:32:22 PM MR. JUNE referred to page 23 of chapter 3 of the Maine 2007 report, which he related shows that because of Maine's Clean Elections Act, the total amount of private contributions received by legislative candidates has fallen sharply, by nearly 77 percent. Furthermore, the report shows that in survey responses to the commission, a significant number of candidates and legislators have stated their belief that campaign contributions have some expectation of access and influence. 1:33:07 PM REPRESENTATIVE GRUENBERG said there are and have been candidates that have businesses that advertise locally or statewide on television. He remarked, "It's like a 24/7 presence of that candidate for publicity's sake." He said sometimes the candidates are incumbents and sometimes they are challengers, but "this becomes tax deductible because it's a business expense." He said, "So, business finances this publicity and so does the federal government, in the sense that it's a tax deduction." He observed that those activities are not at all covered under SSHB 261 or under current law, and there are some potential constitutional issues there. He asked Mr. June how the legislature should deal with that, because it seems to him that those individuals have a tremendous advantage over everybody else. MR. JUNE said he agrees. Although constitutionally the state cannot control what a private individual does with private finances for advertising, some states have created a law so that no seated legislator can have his/her picture in any literature put out to constituents if that literature is paid for with state money. He said there are mechanisms to control that situation and that some states are using to minimize the incumbent's advantage. He concluded, "But in terms of private funds, I don't have an answer for you Representative Gruenberg." 1:36:01 PM VICE CHAIR ROSES announced that SSHB 261 was heard and held.
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