“Statements of Need”: the City Council’s Anti-Incumbent Law?

by Genova Burns LLC

This coming Monday, August 5, the NYC Campaign Finance Board (CFB) is scheduled to cut the first public funds checks for this year’s elections.  While candidates will qualify for different payment levels depending on the valid matchable contributions they raise, the maximum level of public funding is supposed to be the same for all candidates in the same race.  Except it’s not: some candidates will find their public funding capped at one quarter the amount their opponents may receive.

In races where an incumbent is seeking re-election, the CFB has indicated that only a candidate who files a “statement of need” may receive a full maximum payment.  For all other candidates in the same election, payments remain capped at one quarter of the maximum payable.  

Statements of need do not automatically increase the amount payable.  Rather, the candidate must demonstrate facts about an opponent that satisfy criteria set forth in the law.  Thanks to a federal court decision, that demonstration may no longer be based on the level of the opponent’s financing.  Instead, to demonstrate “need” the candidate must show facts such as an opponent’s endorsements, media exposure, positions held or relatives holding elective office.  Alternatively, a statement of need may show that an opponent received 25 percent or more of the vote for a public office in the same geographic area within the last eight years: a fact that can be shown about virtually every incumbent seeking re-election.   Thus, it is actually pretty straight forward for every challenger to qualify for the full maximum payment.

But it’s not so simple for an incumbent.  It may be the case that none of his or her challengers meet any of the competitiveness criteria specified in the law.  And the CFB may not consider even a large public funds check it has issued to a challenger as creating a “need” for an identical public funding ceiling for an opposing incumbent.  Given that these opposing candidates are subject to the same campaign spending limits, did the City Council really intend for incumbents to be more reliant on private contributions than their publicly financed challengers?

It’s a rather odd result, since the law generally treats all publicly financed opponents in an equal manner, with the same contribution limit and the same spending limits.  That is why the CFB has described the goal of the public financing program as “promoting fair competition among candidates competing in the same election” and rejected an interpretation it thought “could exacerbate disparities among [participating candidates] in the same election….”

This unequal interpretation is certainly not inevitable.  The law describes a “statement of need” submitted by a participating candidate as “attesting to the need and stating the reason for additional public funds in such election” and showing “conditions that reasonably demonstrate the need for such public funds.”  This language may be readily understood as pertaining to the need for additional public funds in an election (and therefore pertaining to all candidates in that election) as opposed to the need for additional public funds by only one candidate in that election.  The first interpretation opens the same spigot for all candidates in the election to receive the same maximum payment whereas the current interpretation secures additional public funds for only one candidate while retaining reduced cap for opposing candidates.

Since only one interpretation is consistent with the CFB’s goals of promoting fair competition and not exacerbating disparities among publicly financed candidates in the same election, might the CFB recognize the “need” to change its mind?

Please note that Genova Burns Giantomasi Webster does not currently represent any candidate required to submit a “statement of need” in order to receive a maximum public funds payment in the primary election. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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