State Parties: Independent Partners The Money Relationship Sarah M. Morehouse University of Connecticut [email protected] Prepared for delivery at the 2000 Annual Meeting of the American Political Science Association, August 31-September 3, 2000. Copyright by the American Political Science Association. ABSTRACT This study examines the money flow relationship between the state parties and their national partners. What impact does money coming from the national parties have on the organization and operation of state parties? This research examines state finance reports from political parties in 15 states compared to their reports to the FEC in 1996 and 1998. This time period covers both presidential and gubernatorial election cycles in the 15 states and 30 state parties. The research answers several questions:1) State parties raise, on average between 70 percent to 82 percent of all federal (hard) money raised for their state and 2) 40 percent to 60 percent of all non-federal (soft) money raised as well. 3) They contribute, on average, nearly half of all party money raised within their borders in a presidential election year and 90 percent of all money in mid-term election years. In view of this evidence, it is clear that state parties are not dependent upon the national parties but have maintained their autonomy as they become more professionalized and "parties in service." STATE PARTIES: INDEPENDENT PARTNERS Most state parties are multi-million dollar organizations with experienced executive directors and knowledgeable staffs. It is fierce competition which has driven these state parties into becoming service agencies which raise and spend millions on their own or in partnership with the national parties. State parties have regularized fundraising operations, candidate training programs, issue development and public opinion polling. They provide assistance to their candidates in other areas such as media consulting, and coordination of campaign assistance. With their greatly increased role in state-wide and congressional campaigns, they supplement the candidates' own personal campaign organizations. As the executive director of the Kansas Republicans said:" We are necessary but not sufficient." (John Potter 1998). Fifty years ago, a landmark report Toward a More Responsible Two-Party System noted that the two parties operated:"as two loose associations of state and local organizations, with very little national machinery and very little national cohesion" (APSA 1950,v). There was no central figure or organ which could claim authority to take up party problems, policies and strategy, the report claimed. The report called for a change in state organization, methods and objectives in the interest of creating a higher degree of party responsibility. (APSA 1950,46). Fifty years ago, most state parties were poor and weak. The reformers of the early decades of the twentieth century succeeded in emasculating the nineteenth century state party machines which had controlled nominations and provided resources and voters for the elections (Mayhew, 1986:212-237). Because state political parties were primarily labor intensive organizations, dependent upon patronage for party workers and funds, they were slow to adapt to a technologically based electoral system. At first they could not provide opinion polling, media advertising and fundraising consulting that have become standard procedures for state campaigns. Candidates had to buy these services elsewhere, and became expert at raising money, declaring their candidacies and running for office independently of the party. Since that time, as the states and the nation became more competitive between the parties, and technology made fundraising possible on a massive scale, parties began to strengthen their organizations, engage in sophisticated fundraising, and provide campaign assistance to their candidates (Bibby 1998, Patterson 3 1993). The trend toward stronger organizations and financial power which occurred earlier at the national level has resulted in a partnership between the national and state parties. It is an uneasy partnership at times, with the superior money raising power of the national parties often in conflict with the state-controlled fundraising capability of their state associates. The national committees are widely perceived as dominating their weaker partners in exchange for the money to function as effective organizations. This research is concerned with the money relationship between the state parties and their national partners. What impact does money coming from the national parties have on the organization and operation of state parties? Do the national parties contribute a controlling proportion of the state party financial resources? Data and Methods In order to understand this connection between the national committees and their state parties, party executive directors in 30 political parties in 15 states (including nine of the largest) were sent a questionnaire asking them about the impact of hard and soft money coming from the national parties on their party's activities and autonomy, their relationship with their legislative campaign committees, and their views on campaign finance reform. The response rate after a second badgering was 63 percent. These questionnaires and the follow-up phone interviews are an extremely valuable source of information about the condition of state parties today, and I will quote the directors as frequently as possible. A second line of inquiry consisted of the examination of the 30 state parties for contributions and spending for both state and national candidates. The Federal Election Commission reports for two-year election cycles, the year preceding and the election year, for presidential and midterm elections. State reports filed for the election cycles of 1995-1996 and 1996-1997 were studied extensively. Campaign finance reports filed with the state election agencies were also collected and examined. Therefore state money raising in a presidential election year could be compared with money raising in a gubernatorial election year (All 15 of the sample states elected governors in the 1997-1998 cycle.) In the presidential election of 1996, vast sums of "soft" money were raised by the national parties for issue advocacy. Hence this inquiry tests the monetary relationship between the state and national party during an election cycle when the national party 4 would be expected to dominate as well as in a midterm election year when gubernatorial elections claimed primary importance. The following questions were asked: 1) What percent of federal money (hard) is raised by the state parties? 2) What percent of non-federal money (soft) is raised by the state parties? 3) What criteria do national parties use to give money to state parties? 4) How dependent are state parties on money coming from their national partners? The Rules: Federal Money, Nonfederal Money, and State Money Laws and regulations that apply to congressional and presidential candidates are not the same as those in effect in state legislative and gubernatorial elections. Laws that apply to what parties on the state level may receive and spend are very different from those that apply to what the national parties may receive and spend. The constitutional mandate of federalism applies to the financing of politics at the different levels of government. Federal Money. To begin with, there are limits on how much money may be given to national and state parties to support federal candidates. Corporations and labor unions may not contribute or spend money directly for candidates or parties in connection with a federal election. PACs may give up to $15,000 and individuals may give up to $20,000 a year to a national party for expenditures to affect a federal election.(Both individuals and PACs may give $5,000 to state parties to use for federal candidates.) This money which may be given to parties for federal elections plus the money that may be given to federal candidates by individuals, PACs or parties is called federal money, or hard money, and is regulated by federal law. State and national parties are allowed to spend federally regulated money on behalf of individual senate and house candidates if it is spent independently of, or in direct coordination with the candidate. The Federal Elections Campaign Act strictly limits the amount a party committee may spend in coordination with a federal candidate ($35,000 for a House candidate in 2000). State party committees are allowed to spend the same coordinated amounts in House and Senate races as the national party organizations. But a state party may assign its spending authority to a national party 5 committee, in effect doubling the amount the national committee can spend. These assignments, known as agency agreements, effectively allow a national committee to spend the total amount allowed the national and state party committees in a House race ($70,000). Because these expenditures are coordinated expenditures, both the party and the candidate share control over them, giving the party some influence over how these monies are spent. This fact is considered by the state committees before they enter into agency agreements with the national party committees. They want to be sure a congressional or senatorial campaign committee will do justice to their candidate. Most of the executive directors who answered the questionnaire were satisfied with the agency agreements, claiming that their candidates could usually run their own campaigns. And most executive directors said that the hard money coming from the national committees had little impact on the autonomy of their parties. However, the Illinois Republican Director said the national party once wanted to run an issue ad in a southern Illinois district which they did not approve, so they did not enter into a cooperative arrangement with them for that district (Christine Dudley 1998). The Connecticut Republicans prefer to raise money within the state and the candidates' districts, but recognize that coordinated spending "increases competitiveness" (George Gallo 1998). Generally speaking, the national and state party committees work together to determine how best to allocate their resources to provide the greatest benefit to their candidates in targeted races (usually challengers and open seat candidates) (Corrado 1997). These coordinated expenditures are only made with federally regulated monies. A federal court ruling could alter the limits on coordinated expenditures for congressional candidates. In 1999, Judge Nottingham of the U.S. District Court for Colorado removed all limits on how much the parties can spend for their federal candidates. The ruling, in a long running case from Colorado, threw out spending limits as an unconstitutional infringement on the parties' freedom of speech. The Federal Election Commission voted to appeal the case and lost the appeal in the U.S. Court of Appeals for the 10th Circuit in May, 2000. The Commission is appealing the case to the Supreme Court. Note we are talking about federal money here, money that is raised and spent for federal candidates according to federal law. In an earlier round of the Colorado case, the Supreme Court ruled in 1996 that the parties could spend in excess of the federal limits as long as they operated entirely independently of their candidates. The National Republican Senatorial Committee set up 6 spending units to operate independently in the final few months of the 1996 campaign, and Democrats later followed suit. Both parties claim it is cumbersome to set up separate entities prohibited from coordinating their activities with the candidates they are supporting. The May, 2000 Appeals Court ruling removes the requirement that the parties operate independently of their own candidates if they spend beyond set limits. As the presidential cycle of 1999-2000 began, political parties planned to raise as much "hard" (federal) money as possible in anticipation of unlimited coordinated or independent spending for their congressional candidates. Nonfederal Money. In general, nonfederal money, or "soft" money as it is commonly called, refers to unlimited contributions which are funneled through the soft money accounts of the national parties and state party committees and are prohibited from being used in connection with federal elections. Soft money may be used for party overhead expenses as well as shared activities which benefit all candidates. Soft money is raised in excess of the federal contribution limits or from federally prohibited sources. Soft money is subject only to the laws of the state where it is spent. Thus if a state allows unlimited corporate and union contributions to state parties, then the non-federal portion of any "generic" party activity in that state can be paid for with unlimited corporate or union funds. On the other hand, if a state imposed contribution limits on parties that were at least as strict as the federal law, then there would be no soft money "loophole" in that state. Twenty-four states place limits on contributions to state parties, but some of them allow very generous contributions. In the states these soft money funds are used to enhance the whole national, state and local ticket by supporting volunteer and grass-roots party building activities such as voter registration and identification, certain types of campaign material (slate cards), and voter turnout programs and issue advertising without violating the limits imposed on party contributions and expenditures made in connection with a federal election. Federal court rulings handed down in the late 1980's required the FEC to allocate the costs of state party administrative expenses and the cost of generic (grass-roots) activities mentioned above, that indirectly affect all candidates in ways that reflected the proportion of federal and nonfederal candidates on the ballot. This formula typically requires state parties to allocate one-third of the costs of generic party expenses to their hard money accounts (Common Cause 1998, 3) although this is not always the case. State parties pay for these general overhead expenses out of two funds: federal money for the federal portion and nonfederal money for the 7 state portion. In 1996, a presidential election year, Minnesota parties paid out 60 percent in federal money and 40 percent in nonfederal money for expenses incurred for administrative and grassroots efforts. In 1998, a gubernatorial election year, the allocation formula was 17 percent federal and 83 percent nonfederal. In 1996, both national parties also spent a significant amount of soft money for the first time on issue advocacy ads designed to promote party issue positions. These ads did not expressly advocate the election or defeat of particular federal candidates and were used to publicize the parties' position on the administration's health care proposal, the 1995 federal budget debate, President Clinton's first term record and issues related to the 1996 congressional races. Increasingly these ads have been run in states and congressional districts with the obvious purpose of helping a particular congressional candidate without explicitly urging people to vote for or against any candidate. These ads must be paid for with a combination of hard and soft money according to the FEC formula. As I explained, in the states, the soft money is spent according to state laws which may or may not be stricter than the federal limits. For example, in 1996, the Democratic national party committees transferred $1 million in soft money to the Connecticut state party but it had to be raised according to Connecticut law and be matched by the FEC formula. Much of the money was spent on television ads promoting the record of President Clinton and the Democratic party. The funds also were used to help pay the salaries of a 15-member campaign staff that worked on behalf of both federal and state Democratic candidates. Some of the soft money was contributed directly to state candidates. One candidate for state senate received $45,000 from the party soft money account( Common Cause 1998, 6). While this may sound sensational, this "soft" money came from the national party's individual account because Connecticut law bans money raised from corporations and unions. So the soft money that was transferred to Connecticut was from an account which was raised from individuals by the Democratic National Committee. Naturally the $1 million was welcome to the Connecticut Democrats, but it was not raised in unlimited amounts from corporations, and unions. Generally, soft money is raised by both the state parties and the national parties to pay for these issue ads. State Money. Many state party executive directors speak of money which is raised and spent according to state laws as "state money," rather than nonfederal (soft money). There are 24 states where contributions by individuals and PACs to political parties are limited, and 12 of these states have stricter limits than the 8 federal ones (i.e. no soft money loophole). Table 1 shows what these contribution limits are (for 1998). In these states, the parties have to raise the money to pay for the nonfederal share of administrative and generic activities according to the dictates of state law. Furthermore, they may not accept "soft" money from the national party unless it has been raised according to state law. There are 24 states (including 13 of the above) where the parties are limited in what they may contribute to state-wide candidates. Twelve of the states without contribution limits to parties have limits on party spending for candidates. Since they cannot spend much money on their candidates, this offers an unusual opportunity for the national parties to send soft money funds to these states to be used for issue advocacy, for example. One night the Democratic National Committee (DNC) wired $150,000 to the Minnesota Democratic Party account with the instructions that it be transferred the next morning to a New York advertising agency. This appears to make the Minnesota Democrats into a conduit for the DNC's purposes, but it must be remembered that the issue ads had to be paid for according to the FEC formula for Minnesota (40% soft money and 60% federal money). Obviously the regulatory environment in a state structures the way parties can support their candidates. Malbin and Gais report that Minnesota's rules for political parties did not accomplish their goal, which was to limit the power of interest groups and increase the importance of parties. Minnesota parties may receive unlimited contributions from individuals and PACs but may not contribute more than $20,000 to the governor's campaign. Both these goals would be better served if contributions to the parties were limited and contributions by the parties to candidates were not. The writers anticipate that state parties faced with spending limits may spend independently to help their state candidates, in line with the Supreme Court's 1996 decision in Colorado State Republican Party v.Federal Election Commission which held that unlimited independent spending by a political party has the same First Amendment protection as unlimited spending by an individual or group. (Malbin and Gais 1998, 123-130). The Colorado ruling applied to federal money, but it may become the entering wedge in a universal application. And indeed it has because in September,1999 a Federal District Court Judge in Minnesota ruled that state party independent spending could not be limited. In total, 37 states have some limitations on contributions to and/or spending by state parties. These parties may not accept or spend national party "soft" money unless it is in conformity with state law. For instance, New York parties can receive soft money 9 from the national committees if it is raised in $69,900 or smaller amounts from individuals and PACs. There are seven states which limit the total amount of money coming to the state party from the national party. New Jersey has passed a law that limits the amount of soft money from the national committees to a total of $59,000 per year: Hawaii limits soft money to $50,000 and Kansas limits soft money to $25,000 per year. Other states which place much stricter limits of under $5,000 are: California, Colorado, Vermont, and West Virginia. Some states (MA, SC, WA) specify that soft money can be unlimited if it goes to administrative and housekeeping accounts, which is not much of a limitation. Connecticut passed a law in 1998 that bans the receipt of soft money entirely from the national committees. The Connecticut bill passed the state senate unanimously and the house by a vote of 1463. The Republican executive director said that: "We would prefer not to have soft money exist as an option. We have been forced to beg national officials for some funds simply to compete with the opposition. Our position is that soft money takes the power away from our local base" (George Gallo 1998). The Governor said proudly that Connecticut was the first state in the nation to explicitly ban soft money from state politics. It is important to recognize that the national parties are able to raise unlimited nonfederal (soft money) funds from sources that are not permitted under the federal contribution limits.In 1995-1996, the DNC raised $124 million and the RNC raised $138 million in soft money (about a third of what they raised in total hard and soft). These funds, placed in nonfederal accounts, are used to support national overhead and fundraising expenses as well as support of state parties. National committees can raise this money in the states but often do so as a joint fundraiser with the state parties who have insisted that they are entitled to a negotiated share of the "take." According to the Texas Democrats, they are financing a lot of the DNC budget. Texas donors give to a huge fundraiser and the Texas party asks for its share with the threat that its donors may not be as generous the next time if the share is not forthcoming (Jorge Ramirez 1998). The New York Democratic party asked for 25 per cent of all the profits from DNC fundraisers in 1998 but received 7.5 percent. Chair Judith Hope said:"We raised over $1.2 million in 1997. Let me tell you what the DNC contributed to the state party in 1997: $6,600" (Nagourney 1998,B1). No wonder the New York parties want to have their share: more soft money is raised by the national parties in New York than any other state. This discussion was intended to emphasize the fact that the rules under which each state party operates are sovereign with 10 respect to what the party may raise and spend for state candidates. The national committees may not give money to a state party unless it conforms to rules in that state. On the other hand, federal rules with respect to congressional candidates are sovereign. State parties may not support their congressional candidates with state money (unless, of course, it is raised according to federal standards). Areas of overlap are the administrative and generic expenses to benefit the whole ticket which are paid out of both federal and nonfederal (or state) money accounts according to a formula set by FEC for each election cycle. National Parties and State Parties: Financial Partners Reported in Table 2 for the fifteen states and the thirty parties is the state party percentage of federal (hard) money raised and of non-federal (soft money) raised for the 1996 Presidential year and 1998, the midterm year. The funds represent the total hard and soft money raised by state party committees, national party committees, and senatorial and congressional committees. The data were collected from each state party's campaign finance reports filed with the FEC which contained contributions and expenditures for combined state and national party activity (allocated between federal and nonfederal money according to ballot composition). Since 1990, the FEC requires state parties to keep at least two accounts, federal and nonfederal, for every federal election cycle. The non-federal account should reflect activities that relate solely to state electoral activities. The federal account reflects any kind of activity that might influence federal elections. There is a very high correlation between raising and spending, and raising was used in Table 2. Extreme care was used to make sure there was not double-reporting in state and FEC reports. The states are arranged by population. The first and second columns give the total hard money funds raised in 1996 and 1998 by both state and national parties and the percent of these funds raised by the state parties. The third and fourth columns give the total soft money funds raised in 1996 and 1998 by both state and national parties and the percent of these funds raised by the state parties. Hard Money Raised The 1950 Committee on Political Parties of the American Political Science Association would gaze in amazement and approval at the financial division of responsibility between the state and national parties displayed in Table 2. "State party organizations 11 must raise at least enough funds under federal rules to pay the federal portion of their general overhead expenses" (Biersack 1996, 111). Apparently this is not a great problem for the state parties since the average state share contributed toward its federal money total in 1996 was 70 percent. In the 1997-1998 cycle, the state parties contributed an average 82 percent of the total raised in hard money funds. Hard money funds from the two national parties dropped dramatically from 1996, a Presidential election year, in which they contributed a total of $38,233,000 to their state parties to 1998 when their combined total was $10,303,000. Apparently, state parties were able to make up the difference. In other words, state parties contribute a very large share of the money raised according to federal law for overhead expenses such as administrative and generic expenses, fundraising expenses, issue advertising and voter turnout programs. Soft Money Raised National party soft money raising increased continuously from 1992 until the 1995-1996 Presidential cycle (when it reached a high of 124 million for Democrats and 138 million for Republicans). Understandably, the election cycle of 1997-1998 showed a decrease of 14 percent over the Presidential election cycle. In spite of this, the amount of soft money more than doubled since the last midterm election of 1994: Republican "soft money" accounts raised $131.6 million, a 151% increase over 1993-1994 and Democrats collected $92.8 million, an 89% increase. Because the national parties have been raising nonfederal (soft) money in huge amounts in the last four years,they are running short of the federal funds needed to pay for congressional races, for instance. Meanwhile the state parties raise money in smaller contributions to conform to state law, or simply because their citizens are not large donors and money raised this way conforms to federal law as hard money. Some state parties such as the Connecticut and Ohio Democrats "sell" federal money for nonfederal money to their national partners and make a profit by doing so--a 10 to 15 percent commission according to Common Cause (1998). Most state party executive directors claim that they are not dependent upon soft money, even in a presidential election year. According to the executive director of the Georgia Republicans: "We are not addicted, but we take what we can get" (Joe King 1998). Other executive directors claimed soft money was a help, but that they could get by without it if it were cut off 12 for some reason. The Pennsylvania Republican Party executive director said it was valuable for voter contacting, but that they were not very dependent upon soft money (Hank Hollowell 1998). State parties do not raise nonfederal money as avidly as federal money, and the average percent contributed by the state parties in our sample to the soft money account in 1996 was about 41 percent and in 1998 the average was about 59 percent. There is a great diversity among the states with regard to this form of funding, which leads to speculation about which states are most likely to receive this federal largesse. These are the funds which make up a large portion of the administrative and generic activities and issue advertising. La Raja tested for the impact of transfers of national party soft money on the organizational growth of state parties, and found that these party transfers are not used to support off-season operations of state parties, suggesting that they are used primarily for federal electoral activities, not organizational support (La Raja 1999). According to the Illinois Republican executive director, national parties use several criteria in deciding how to bestow nonfederal money upon a state party, but the principle one is closeness of the race for President, Senator and members of Congress (Christine Dudley 1998). If the Presidential race is close, then soft money is usually forthcoming in large amounts. In 1996, California was a targeted state because of the closeness of the race (13% margin of victory for President Clinton). New York, with a 28 percent margin for the President, was not targeted and had to raise most of the modest amount of nonfederal money itself. I found that the state parties with close Presidential races (a margin of 13 percent or under) raised an average 25 percent of the total soft money funds from both national and state parties, while their sister states where the race was secure, raised an average 65 percent of the total funds. Apparently, the national parties allocate scarce resources where they think they will make a difference. A regression performed on the thirty state parties using the presidential election margin as the independent variable and the share of the nonfederal money contributed by the national party as the dependent variable, yielded an adjusted R square of .267 with a significance level of .002. (Table 3A). This is a start toward explaining the causes of national party assistance to state parties in a presidential election year. Using 100 parties in all 50 states and quantifying other determinants are possible as we proceed toward an understanding of the national-state party relationship. The midterm election year of 1998 was not as robust for the 13 national committees as Table 2 shows. The amounts and the percentages of transfers dropped. This is particularly noticeable in the nonfederal transfers to all 50 states. The Democrats, whose soft money fundraising dropped from $124 million to $93 million, dropped its national committee transfers from $54 million to $12 million. The Republicans, whose national soft money account dropped from $138 million to $132 million went from $48 million to $21 million in state transfers. The hard money transfers from the national committees also dropped from 1996 to 1998: for the Democratic National Committee from $20 million to $3 million and for the Republicans from $18 million to $7 million. The national Congressional parties focus on races for the Senate and House in midterm election years and gave much more generously to the state parties in the 1998 cycle than they had in 1996. The Democratic Senatorial Campaign Committee increased its federal and nonfederal transfers from $10.5 million to $28.5 million in the effort. The Senate Republicans increased their money on behalf of their senators from $2 million to $15 million. The Democratic and Republican Congressional Committees also increased their totals, from $9 million to $10 million for the Democrats and from $400 thousand to $5 million for the Republicans In these midterm elections, the closeness of the Senate and House races may determine the amount of nonfederal money transferred to the state parties. Glasgow tested for the impact of election margins on the allocation of national and state party money to Congressional races and found that the Democrats and more recently the Republicans have distributed their resources strategically (Glasgow 2000).In addition to aiding closely challenged Senators and House members, helping a closely challenged gubernatorial candidate may bring a friendly occupant to the governor's mansion which would be an asset two years hence. Since 11 states in the sample of 15 had both Senate and Gubernatorial elections, I tested for the impact of the electoral margin for both senator and governor on the percentage of the total soft money transferred to the state parties which was given by the Republican and Democratic senatorial campaign committees. I assumed that the senatorial committees targeted close races and put their money into them. I also tested the relationship of a close gubernatorial race on the total percentage of soft money given by Senatorial committees, assuming that the national committees might target gubernatorial races for funding, hence lowering the proportion of the total for the Senate race. The second regression in Table 3B reveals that the closeness of a Senate race has a large impact on the percent of the total 14 soft money transferred by the Democratic and Republican senate campaign committees for that state. The standardized coefficient is -.836 (significant at .000) indicating that as the electoral margin goes down, the funding goes up. The adjusted R square is .526. Interestingly, the impact of the closeness of the gubernatorial race is not significant, but the coefficient is in the right direction (as the electoral margin goes down, so also does the percentage of senate money). Apparently, the closeness of the governor's race is not considered a major reason to send money to a state party. It appears that state parties are not the dependent partners which was predicted. They raise an average of 70 percent of the hard money funds and 41 percent of the soft money funds in Presidential election years. When the noise of the Presidential election subsides and the mid-term election cycles begin, the parties forage for an average 82 percent of the hard money and 59 percent of the soft money to keep the office open, pay for utilities, pay for national party issue advertising. Also on their minds at this time is a gubernatorial campaign with an underticket and state legislatures to keep or challenge and the need to raise state money to pay for it all. State Parties and State Money Reported in Table 4 for the fifteen selected states and thirty parties is the state money raised for state elections according to state rules. The data were gleaned in part from each state party's campaign finance reports filed with the state elections division. The table details the amount raised by the state parties as well as that raised by their senate and house legislative committees for the 1996 and 1998 election cycles. The 15 Democratic state parties were collectively about 18.5 million dollars richer in 1998 (total $91 million). The 15 Republican state parties collectively raised about the same in both periods (Total $104.5 million). The Pearson Correlation between the 15 Democratic state parties' funds in 1996 and 1998 was .769, indicating that they grew proportionately. This was not as true with the 15 Republican parties since the Pearson Correlation was .620 indicating that some parties had different growth rates. The New York Republicans doubled in size and the Florida Republicans grew one and a half times larger. In order to control for state size, I divided state party money by the state's electoral vote. Some party treasuries are large when compared this way such as both parties in Florida, Georgia, New Jersey and Minnesota, the New York Republicans, the Illinois Democrats. I hypothesized that the closeness of the 15 governor's race could account for state fund raising. However, Table 3C, the third regression, shows that the closeness of the governor's race had a minor impact on money raised by the state parties in 1998 (Adjusted R Square=.18; significance=.011).Perhaps there is a better measure of the dependent variable than the one used i.e. the amount of money raised divided by the electoral vote. Other factors such as party strength, party label, campaign finance laws, may account for these variations. Perhaps some differences may be largely idiosyncratic. For instance, the Texas Republicans in 1998 were a puny organization compared to their New York, New Jersey and Florida sisters. Why is this? Governor Bush was incensed when Republican Party Chair Tom Pauken openly criticized his tax increases in the 1997 tax-reform package. He and his campaign chair Rove cut off the party's funding by directing most of the big contributions into a separate political fund controlled by Bush and Rove (Ivins 2000,83). That helps explain why the Texas Republican Party has so little money. In New York where parties may spend as much as they want to back candidates in the general election, Governor Pataki's fundraising for reelection had reached $12 million by February 15 of the 1998 election year. Six and a half million dollars were from the state Republican Party and $5.7 million were from his own efforts. The Pataki campaign asked large donors, both interest groups and individuals to give to the State Republican Party ($69,900 or unlimited to housekeeping account), which then funneled the money to the campaign. That strategy allowed the campaign to get around individual and interest group limits for gubernatorial candidates since the state party is unlimited (Levy 1998). This generous funding to the Governor's reelection campaign by the state Republicans was unprecedented in New York and may well be a predictor of the future. It may have accounted for the fact that the Governor set a record by spending nearly $20 million for his reelection. Both parties in New Jersey raised large amounts of money in 1997. Governor Christine Todd Whitman's job rating hovered at no more than 50% in a state that had voted strongly for President Clinton the year before. The Democratic party sensed that it could win and built up a campaign chest. The President helped raise money for the candidate, state senator and mayor of Woodbridge James McGreevey, who concentrated his attacks on property taxes and auto insurance rates. The Republican National Committee paid $760,000 for an issue advocacy ad urging voters to remember the tax-hiking, welfare boosting days of past Democratic governors. Whitman's victory margin was less than one percent. Clearly the closeness of 16 the governor's race influenced money raising in New Jersey. Contrary to the dire predictions that infusions of soft money to the state parties would render them dependent on their national party, they appear to have a life of their own. Between 1996 and 1998 nine of the 15 Democratic parties increased their fund raising and Florida remained rich. Some of the 15 Republican parties appeared to increase their coffers in response to close gubernatorial races, but this was not universally true. The state parties are service agencies for state candidates from the state legislator to the governor. Candidates benefit from candidatespecific services such as phone banks, fundraising, research, polling, advertising and media advice. State Party Organizations and Legislative Campaign Committees In many states state legislative campaign committees play a major role in raising funds for state legislative candidates. Legislative party leaders are expected to assume much of the responsibility for raising these funds, largely because they are better able to extract funding from interest groups than rank-andfile legislators can. Table 4 compares the funds raised by the state party (and reported to state regulatory agencies) and those raised by legislative campaign committees, for each party for both the 1995-96 and 1997-98 periods. In three of the fifteen states legislative campaign committees do not function, in California and Florida because they are banned by law, and in Texas because until recently the legislative parties have been relatively weak. The state party organizations in these three states raise funds for legislative candidates. The table shows substantial variation among the legislative campaign committees in the twelve states where they operate. Most state party organizations raise more than the legislative committees. The Illinois Republican legislative committees, however, raised more than the party organization and more than their Democratic counterparts in both election years, a period when Republicans were very narrowly ahead in the Senate and slightly behind in the House. Likewise, the Ohio legislative committees in both periods raised more than the comparable Democratic committees and more than their state party organization. It is probably no coincidence that in the 1996 and 1998 elections House Republicans enlarged the narrow lead they had won in 1994, after 22 years of Democratic control of the House. New York Democratic legislative parties raised more than their state parties in both periods, while their Republican counterparts 17 raised more in both elections than any other Republican legislative party, though less than their Republican state party. Although New York Democrats held the Assembly and the Republicans the Senate by 60% or more, both put large amounts of funds into the relatively few races expected to be close. In several of the smaller states legislative campaign funding is at a relatively low level, partly because legislative campaigns in smaller districts are less costly. In the southern states included in this sample of 15, there are fewer legislative campaign committees and lower levels of spending for the committees that exist--although the Tennessee and Georgia Democratic legislative committees showed signs of more activity in the 1997-98 period. The data in Table 4 do not show what proportion of funds raised by state party organizations was spent on legislative races. A study (Gierzynski and Breaux 1998) of party funding of legislative races in the 1992 elections showed that in about half of the cases the state party provided more funding for legislative races than did the legislative campaign committee, and this was particularly true in Republican parties. Moreover, in a number of the southern states where strong legislative parties have been slow to emerge, the state party organization has assumed most of the responsibility for recruiting and funding legislative candidates. State party executive directors were generally satisfied that their relationships with the legislative campaign committees were cooperative. In some states, the legislative campaign committees are housed in the state headquarters (OH-D, OR-D, MN-D).The Georgia Republican state committee and the legislative campaign committees meet once a week. The Connecticut Democratic legislative campaign committees are autonomous and raise money on their own (Robert Ives 1998). Only among the Colorado Democrats was there a bad relationship between the state committee and the senate campaign committee. State Parties: Independent Partners Table 5 provides a summary of the 30 state parties and their proportional share of the total funds raised from all sources in 1996 and 1998. Included in the totals reported in the Table are funds raised for state election accounts (Table 4) which include funds raised by the state party committees as well as state legislative campaign committees. In addition the totals include what was raised by the state party committees and the national party committees (National, Senate, House) for the "allocable" activity (activity allocated between federal(hard) and nonfederal 18 (soft) funding) presented in Table 2. The second column under each election cycle gives funds raised by the state parties as a percentage of the total funds raised from all sources. For those who predict the dependence of state parties on the national largesse delivered during Presidential election years, Table 5 offers a denial of this hypothesis. In the first column of the Table are the total amounts raised by all national and state parties for a national election year. None of the fifteen states had gubernatorial elections during that period that might have demanded a greater share of state funding. The major effort on the state level was elections for the state legislature. Thus it is impressive that the 30 state parties contributed an average 47 percent of the total fundraising in a presidential election year, and some states contributed a great deal more than that. Except for the Oregon parties, which are obviously dependent upon their national parties for sustenance, the other parties maintain their autonomy while substantially helping their national parties. Table 5 also details the condition of state parties in the non-presidential year of 1998. Recall that the national party transfers to their state parties dropped dramatically in this election year. Overall the Democrats dropped from $94 million transferred to their state parties in 1996 to $54 million two years later. The national Republicans dropped from $69 million to $47 million. Despite this, nearly half the state parties in our sample of 15 increased their funds in 1998 and the average amount raised per state party was the same in both election periods: $14 million. As we would suspect in a non-presidential year, the state contribution of the total funds raised averaged 89 percent. This means that the average state party in our sample raised almost all of hard money, soft money and, of course, all of the state money. This is not the picture of dependency. CONCLUSIONS Many state political party organizations are becoming stronger, not weaker. The old style patronage driven, labor intensive party operation has disappeared. For those who bemoan its demise, the executive director of the Minnesota DFL said: "Even my church uses caterers for funerals" (Kathy Czar 1998). Parties have adapted themselves to the new technology and provide valuable services to state and national candidates. They began this process of adaptation well before the infusion of money from their national committees. In fact, party development within state parties paralleled the resurgence of national party organizations. As the national parties became stronger and richer, they needed strong 19 state partners because of the increasing competition in every state. This remedy was suggested 50 years ago by the APSA report: Toward A More Responsible Two-Party System. The relationship between the national parties and their state parties has never been closer than it is today. Ironically, it was also predicted that the state parties would become "nationalized" and would lose their independence as they became financially bound to their wealthy national partners. Since the late 1970s the national parties have reinforced their state parties providing cash grants, professional staff, data processing and consulting services, expertise in fund-raising, campaigning, media and redistricting. State parties now are proficient in voter list development and get-out-the-vote efforts. Far from the predicted party decline, however, they have become "parties in service" (Aldrich 1995). They have developed mutually beneficial relationships with candidate centered campaigns and legislative campaign committees. In our sample of 30 state parties,they raise, on average, between 70 percent to 82 percent of all federal (hard) money raised for their state and 40 percent to 60 percent of all non-federal (soft) money raised as well. And they contribute, on average, nearly half of all party money raised within their borders in a presidential election year and 89 percent of all money in mid-term election years. In view of this evidence, it is clear that state parties are not decomposing, as the academics and journalists have been predicting, but have been adapting to the media-driven society in which they find themselves. They provide needed technical information and financial resources to candidates. They have maintained their autonomy as they became more professionalized and durable. NOTES I owe a great debt to Robert Biersack of the Federal Elections Commission who provided many tables for my use and patiently explained the intricacies of the financial relationship between the state parties and the national parties. To my husband Malcolm Jewell who helped me from start to finish and summarized the data and computed relationships and wrote the section on state legislative parties. Jennie Drage, an innovative 20 and cheerful Legislative Management analyst from the National Conference of State Legislatures helped me update Table 1, with recent state Campaign Finance regulations. Christopher Burnett, Ph.D. candidate at Colorado State University helped by collecting state party campaign finance data from the Elections Division, Colorado Secretary of State as well as showing an interest in the project. I also want to thank the following executive directors for completing the questionnaires I sent them. Many of them gave me the answers over the phone and thus spent much more time on explanations and anecdotes: AZ-D, Melodee Jackson; CO-D, Darryl Eskin; CT-D, Robert Ives; CT-R, George Gallo; FL-R, Randy Enwright; GA-D, Steve Anthony; GAR, Joe King; IL-R, Chris Dudley; KA-D, Brett Cott; KA-R, John Potter; KY-R, Cathy Bell; MN-DFL, Kathy Czar; MN-R, Tony Sutton; NV-R, Charles Muth; NJ-D, Richard Thigpen; NY-D, David Cohen; OH-D, Amy Young; OH-R, Thom Whatman; OK-D, Pat Hall, OK-R, Quineta Wylie; OR-D, Robert Sacks; PA-R, Hank Hallowell; SC-R, Trey Walker; SD-R Patrick Davis; TX-D, Jorge A. Ramirez; TX-R, Barbara Jackson; VT-D, Tom Hughes. REFERENCES Aldrich, John. 1995. Why Parties? Chicago: University of Chicago Press. APSA (American Political Science Association) Committee on Political Parties.1950. :"Toward A More Responsible Two-Party System." American Political Science Review 44: Supplement. Bibby, John F. 1998. "State Party Organizations: Coping and Adapting to Candidate-Centered Politics and Nationalization." In The Parties Respond, 3d ed., ed. L. Sandy Maisel. Boulder, CO: Westview Press. Biersack, Robert.1996. "The Nationalization of Party Finance, 19921994." In The State of the Parties: The Changing Role of Contemporary American Parties .2nd ed., eds. John C. Green and Daniel M. Shea. Lanham, MD: Rowman and Littlefield. Common Cause.1998. Party Soft Money.Washington,DC: Common Cause. Gierzynski, Anthony, and David A. Breaux. 1998. "The Financing Role of Parties." in Campaign Finance in State Legislative Elections, edited by Joel A. Thompson and Gary F. Moncrief. W a s h i n g t o n 21 D.C.:CQ Press. Glasgow, Garrett. 2000. "Strategic Distribution of Party Resources, 1997-1998." Paper prepared for the Annual Meeting of the Midwest Political Science Association. Ivins, Molly. 2000, "Shrub: The Short But Happy Political Life of George W. Bush." New York:Random House. La Raja, Raymond J. 1999. "The Impact of Soft Money on State Party Behavior: Do Soft Money Transfers Strengthen the Party?" Paper prepared for delivery at the Annual Meeting of the American Political Science Association. Levy, Clifford J. 1998. "Led by Pataki, Fund Raising in Governor's Race Outstrips the Past." The New York Times, 15 February:35. Malbin, Michael J, and Thomas L. Gais. 1998. The Day After Reform: Sobering Campaign Finance Lessons from the American States Albany, NY: The Rockefeller Institute Press. Distributed by the Brookings Institution Press. Mayhew, David. 1986. Placing Parties in American Politics: Organization, electoral settings, and Government Activity in the Twentieth Century. Princeton: Princeton University Press. Nagourney, Adam. 1998 "Fight Widens Over Keeping Party Funds: New York's Democrats Demand a 25% Share."New York Times, 17 January, B1. Patterson, Samuel C. 1993. "The Persistence of State Parties." In The State of the States, ed. Carl E. Van Horn. Washington D.C. : Congressional Quarterly. 22 TABLE 1. Contribution Limits to State Parties and from State Parties, 1998 State Parties Alaska Annual Individual Contributions to Parties $500 Annual PAC Contributions to Parties Contributions from Parties to Candidates for Governor $1,000 $100,000 California 5,000 5,000 Unlimited Colorado 25,000 25,000 400,000 5,000 5,000 Unlimited Delaware 20,000* 20,000* Hawaii 50,000 50,000 Kansas 15,000 5,000 Kentucky 2,500 2,500 Louisiana 100,000* 100,000* Connecticut Limited by office 50,000 Unlimited in general election 1,000 per slate Unlimited Unlimited Maryland 4,000** 6,000** Massachusetts 5,000 5,000 New Hampshire 5,000 Unlimited 100 for publicly funded; 35,000 in-kind; $3,000 for non-publicly funded Unlimited for publicly funded New Jersey 30,000 30,000 2,100 per primary and general elec. New York 69,900** 69,900** Ohio 15,500 15,500 5,000 5,000 Oklahoma Rhode Island South Carolina 1,000 (Limit: 10,000) 3,500** 1,000 (Limit: 10,000) 3,500** Primary-prohibited; general electionunlimited 515,000 per primary or general elec. 5,000 25,000; in-kind unlimited*** 50,000 South Dakota 3,000 Unlimited Unlimited Vermont 2,000 2,000 400 Washington West Virginia Wisconsin Wyoming Unlimited 1,000 10,000 (Limit: 10,000) 25,000 (Limit: 25,000 2,875** 1,000 0. 58 per voter 1,000 per primary or general election Unlimited 6,000 Unlimited Primary: prohibited; general electionunlimited TABLE 1 (cont.) Contribution Limits to State Parties and from State Parties State Parties Annual Individual Contributions to Parties Annual PAC Contributions to Parties Contributions from Parties to Candidates for Governor None for publicly funded; 68,144 for non-publicly funded**** 2,500 Arizona None None Arkansas None None Florida None None Georgia None None 50,000 for publicly funded; in-kind unlimited*** 5,000 Idaho None None 10,000 per primary or general elec. Maine None None Michigan None None Minnesota None None 20,000 Missouri None None 10,700 Montana None None 15,000 Nebraska None None 750,000 for publicly funded Nevada None None 5,000 per primary or general election None for publicly funded; 500 for non-publicly funded 68,000 None in primary; unlimited in gen. elect. None None New Mexico Source: U.S. Federal Election Commission. 1998. Campaign Finance Law ‘98: A Summary of State Campaign Finance Laws with Quick Charts. Washington, D.C.: FEC; and Jennie Drage, Research Analyst, Legislative Management, National Conference of State Legislatures. NOTE: Corporations and labor unions are prohibited from contributing in: AK, AZ, CT, MI, MN, NC, NH, ND, OH, OR, PA, RI, SD, WI, WY. Corporations only are prohibited from contributing in: IA, KY, MA, MT, OK, TN, WV. Corporations and labor unions are limited the same as PACs in: CA, CO, DE, HI, LA, NJ, SC, VT, WA. OK and WV: Labor unions only. In KA corporations and unions are limited the same as individuals. In KY and MA, labor is limited like individuals. In AL, IN, MS, and NY there are varying limits on corporate and labor contributing. * Delaware contributions are for a two-year cycle and Louisiana contributions are for a four-year period. **MD, NY, SC, and WA limit cash contributions but not contributions to overhead expenses, therefore allowing unlimited contributions to the party administrative and housekeeping account. ***In Florida and Rhode Island, cash contributions are limited but in-kind contributions are not. Therefore, they are treated as if they permit unlimited party contributions. ****Total from political party and all political organizations combined. NOTE: There are 13 states that do not limit individual or PAC contributions to or contributions from the parties: AL, IL, IN, IA, MS, NC, ND, OR, PA, TN, TX, UT, VA TABLE 2. State Party Percentage of Hard and Soft Money Raised in 1995-96 and 1997-98 (in 000s) State Party California Dem Rep Texas Dem Rep New York Dem Rep Florida Dem Rep Pennsylvania Dem Rep Illinois Dem Rep Ohio Dem Rep New Jersey Dem Rep Georgia Dem Rep Tennessee Dem Rep Minnesota Dem Rep Colorado Dem Rep Connecticut Dem Rep Oregon Dem Rep Kansas Dem Rep Hard Money Raised for Federal Account 1995-96 Total % St. Party Hard Money Raised for Federal Account 1997-98 Total % St. Party Soft Money Raised for Federal Account 1995-96 Total % St. Party Soft Money Raised for Federal Account 1997-98 Total % St. Party 8,110 7,900 88 68 8,160 7,345 53 65 11,889 7,002 36 0 9,410 5,893 68 74 4,617 5,093 65 90 1,722 4,163 66 98 5,141 3,496 55 40 4,371 2,543 39 79 1,912 2,328 86 98 4,275 5,027 34 56 1,534 4,256 96 80 6,259 13,082 31 84 3,306 5,756 37 85 1,075 4,874 87 96 5,459 6,471 29 78 2,176 7,244 68 73 2,495 2,570 36 69 730 2,297 71 91 4,776 2,630 0 8 612 616 8 63 2,854 3,265 56 68 1,756 2,084 75 90 3,662 1,882 32 6 3,075 1,879 1 51 3,259 6,357 51 77 2,153 4,529 87 99 5,399 4,448 25 27 2,864 2,706 30 52 1,969 3,313 78 87 1,085 1,730 90 97 1,855 4,348 90 96 1,152 3,906 90 86 3,174 2,497 83 73 1,076 1,752 86 98 3,125 2,900 54 16 1,575 1,649 68 49 1,443 2,944 22 75 654 2,593 72 100 1,478 1,376 0 0 744 758 65 11 4,512 3,069 70 95 2,296 3,203 98 100 2,968 1,664 47 71 2,379 4,474 65 73 2,496 2,256 55 73 704 541 94 89 3,080 1,362 38 14 66 751 100 98 1,360 1,134 75 75 975 423 89 55 1,059 557 7 100 1,273 814 38 50 2,480 1,694 65 72 652 605 69 80 1,785 335 4 25 741 106 51 29 1,542 684 64 68 435 509 83 84 886 79 87 70 388 230 87 78 Source: State campaign finance reports filed with the FEC. TABLE 3. Predicting the Magnitude of Soft Money Raising A. The Effect of Presidential Election Margin on Transfers of National Party Soft Money, 1995-96 Variables Constant Presidential margin Regression Coefficients Unstandardized Standardized 85.846 -2.414 -.541 T-score 9.044 -3.404 Significance .000 .002 Number of cases 30 Adjusted R2 = .267 Dependent variable: National party percent of all non-federal funds transferred to state party B. The Effect of Senate and Gubernatorial Election Margins on Transfers of SCC Soft Money, 1997-98 Variables Constant Senate margin Governor margin Regression Coefficients Unstandardized Standardized .715 -.028 .005 -.836 .207 T-score 6.524 -4.750 1.176 Significance .000 .000 .255 Number of cases 22 Adjusted R2 = .526 Dependent variable: Senate Campaign Committee Percent of all non-federal funds transferred to state party C. The Effect of Gubernatorial Election Margins on Size of State Party Funds, 1997-98 Variables Constant Governor margin Regression Coefficients Unstandardized Standardized 508.189 -9.163 -.458 T-score 6.084 -2.725 Significance .000 .011 Number of Cases 30 Adjusted R2 = .181 Dependent variable: State party funds divided by state electoral vote. TABLE 4. Funds Raised by State Party Organizations and by Legislative Party Campaign Committees, 1995-96 and 1997-98 (in 000s) State 1095-96 California Texas New York Florida Pennsylvania State Democratic Party Organization 12,878 4,683 4,219 14,473 6,686 Democratic Legislative Campaign Committee State Republican Party Organization Republican Legislative Campaign Committee ....... ....... 7,908 ....... 1,919 9,245 1,109 10,900 19,724 5,936 ........ ........ 10,193 ........ 3,703 Illinois Ohio New Jersey Georgia Tennessee 3,303 6,844 3,574 6,411 1,495 6,645 1,811 2,603 195 656 3,506 6,556 9,328 25,747 3,394 8,569 7,045 4,754 214 178 Minnesota Colorado Connecticut Oregon Kansas 3,332 2,894 1,012 212 359 1,533 355 327 22 302 4,713 2,391 908 73 179 2,139 465 525 69 256 1997-98 California Texas New York Florida Pennsylvania 18,294 6,174 2,681 13,264 2,059 ........ ........ 7,862 ........ 2,162 11,062 3,615 22,477 29,579 5,258 ....... ....... 8,881 ....... 4,490 Illinois Ohio New Jersey Georgia Tennessee 9,354 4,843 6,513 14,183 1,083 5,044 1,907 3,980 1,118 1,634 1,914 3,280 9,114 5,418 2,213 8,829 6,758 4,855 82 503 Minnesota Colorado Connecticut Oregon Kansas 9,047 417 1,696 746 554 1,761 61 456 850 434 7,231 511 2,482 168 190 1,739 13 245 995 248 Source: Campaign finance reports filed with Secretaries of State, Elections Division. TABLE 5. Party Funds from All Sources and Percentage Raised from State Party State Party California Dem Rep Texas Dem Rep New York Dem Rep Florida Dem Rep Pennsylvania Dem Rep Illinois Dem Rep Ohio Dem Rep New Jersey Dem Rep Georgia Dem Rep Tennessee Dem Rep Minnesota Dem Rep Colorado Dem Rep Connecticut Dem Rep Oregon Dem Rep Kansas Dem Rep Funds Raised in 1995-96 (in 000s) Total Funds % from State Party Funds Raised in 1997-98 (in 000s) Total Funds % from State Party 32,877 24,147 39 38 35,864 24,300 81 83 14,441 9,698 32 11 12,267 10,321 73 94 15,573 27,641 78 76 21,077 49,467 66 91 23,238 31,951 62 62 16,515 41,697 95 95 15,840 14,839 54 65 5,563 12,661 86 97 16,464 17,222 60 70 19,231 14,706 82 92 17,311 24,406 50 56 11,749 17,273 81 92 10,001 21,743 62 65 12,730 19,605 98 97 12,905 31,358 51 83 17,952 8,901 96 90 5,072 7,892 42 45 4,115 6,267 89 86 12,345 11,585 39 59 15,483 16,647 94 93 8,825 8,432 36 34 1,248 1,816 96 96 3,758 3,142 35 46 4,400 3,964 80 85 4,499 2,171 5 7 2,988 1,874 81 90 3,089 1,198 21 36 1,811 1,177 93 89 Sources: Campaign finance reports filed with Secretaries of State, Elections Divisions, as well as state reports filed with the FEC.
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