Testimony: Maryland Small Donor Incentive Act

By Emily Scarr
State Director

Below is our testimony on HB1017, a bill to establish small donor public financing for general assembly races. It's time to bring this program to the state level.

A Small Donor Incentive program for state legislative seats in Maryland will be better for candidates and elected officials, better for the public, and better for Maryland.

We believe Maryland elections should be funded by Maryland residents and contributions should be limited to what the average Marylander can afford to make. This will help ensure that all people have more or less equal opportunity to influence elections regardless of race, gender, age, or income. 

BACKGROUND: Recent decisions from the Supreme Court, like Citizens United and McCutcheon, have unleashed a wave of mega donors into the electoral process and we are feeling the effects at the local level. The meteoric rise of election spending since these Supreme Court decisions means candidates and elected officials are often trapped spending an increasing amount of time fundraising from big donors, giving them less time to hear from and serve their constituents. It has also exacerbated the already shrinking faith that citizens have in their elected officials and government.

Local offices are not exempt from these issues – in fact, we expect the removal of restrictions on aggregate contributions limits to lead to increased spending by mega donors on local elections. Our research has found that this decision will ultimately cause $1 billion in increased spending through the 2020 elections from less than 3,000 mega donors. 

An October 2017 Poll from the University of Maryland and the Washington Post found that Americans, regardless of political affiliation agree the money in politics is a big issue and are not happy with the way our democracy is going. 

  • 36% said they are not proud of the way democracy works in America, up from 18% in 2014.
  • Money in politics was listed as the #1 cause for dysfunction in the U.S. political system, with a whopping 96% of respondents saying it had “A lot” (65%) or “some” (31%) to do with the problem. 

MOMENTUM ACROSS THE STATE AND REGION: Small donor public financing programs are popular, effective, and gaining momentum in Maryland and throughout the country. In 2014, Montgomery County became the first Maryland county to establish a small donor incentive program for county races. The program was in effect for the 2018 election and was popular and effective. Candidates used the program to run competitive and winning campaigns for County Council District, At-Large, and County Executive seats. 

A forthcoming analysis from Maryland PIRG and Common Cause finds promising results from the program:

  • Small contributions and their match accounted for 99% of money for County Council candidates in the program vs small contributions accounting for 17% of money raised by non-participating Council candidates.
  • With matching funds, candidates in the program were able to compete financially with traditionally funded candidates. 
  • The average contribution for participating County Council candidates was $81 vs an average contribution of $255 for non-participating candidates.
  • On average, County Council candidates participating in the program received almost twice as many contributions than candidates not participating (600 vs 308).

Howard County finalized their own small donor matching program in July of 2017 after voters amended the county charter, the D.C. City Council finalizsed their program in 2018, and the Prince George’s County Council finalized their program in fall 2018. In 2018, Baltimore City Council passed an Amendment to the City Charter to establish a Fair Election Fund which passed on the ballot in November with overwhelming public support. The City Council will be finalizing the program this year. Similar programs have proved effective in Connecticut and New York City, where more than 90% of candidates frequently participate in the program. 

Maryland Congressman John Sarbanes is the author of the Government by the People Act, which would enact a similar program at the national level, as part of HR1. 

TIME TO ACT: Here is the basics of how the program works:

  1. Participating candidates have to reject all large and corporate contributions and only accept small contributions to their campaign. They must also reach qualifying requirements for dollars raised and donors engaged. 
  2. Once they qualify, they will receive limited matching funds for the small contributions from Baltimore residents, with the smallest donations receiving the highest match. This encourages candidates to focus their campaigns on city residents of all income levels and enables them to remain competitive with candidates not participating in the program. 

The fight to overturn Citizen’s United will be long, but this is something you can do now. There is no doubt that our democracy is in a fragile state. You have an incredible opportunity to empower Maryland residents in in our elections and build a democracy for the people. I hope you take it. 

We respectfully request a favorable report on HB1017.

[1] McCutcheon Money, U.S. PIRG and Demos, October, 2013. 

[2] Most Americans say politics have reached a dangerous new low point, Washington Post and University of Maryland, October 28, 2017. 

[3] States, Counties, and Municipalities Empower Small Donors and Curb the Power of Big Money in Politics, Dems, June 28, 2017. 

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