To the Limit: Here's How Austin Caps Campaign Finance

Jul 19, 2016

Austin City Council candidates scouting for new or incumbent leadership filed their first campaign finance reports Friday. Sure, it's still early going, but the fundraising cycle has ramped up in the five Council districts with races on the ballot in November.


In District 6, Council Member Don Zimmerman’s competition, Jimmy Flannigan, pocketed nearly $47,000, while the incumbent’s campaign coffers have seen just over $36,000 in contributions. Among all the candidates, District 4's Council Member Greg Casar has raised the most — nearly $80,000 — while his opponent, Louis Herrin III, collected and spent nil.

And while Casar’s $80,000 is a good showing at this early stage of fundraising, it’s pennies compared to the last local election numbers we saw, when the Uber and Lyft-funded PAC Ridesharing Works for Austin spent just over $9 million. That’s because different rules govern each process. Fundraising for a ballot campaign is way more freeform.

Campaign finance for candidates looks something like this:

Contributions

The city caps individual contributions to council and mayoral candidates at $350 (political action committees are considered “persons,” and so this limit applies to them as well). Corporations cannot donate to these campaigns, per state law. There’s no limit on the total amount of individual contributions from Austin voters – but outsiders are subject to a ceiling of no more than $36,000 from non-Austin voters. A letter sent to Council members from the city clerk's office in May reiterated contribution limits:

(1) No candidate for Mayor or City Council and his or her campaign committee shall accept campaign contributions in excess of $300 [see below for current index amount] per contributor per election from any person, except for the candidate and small-donor political committees. The amount of the contribution limit shall be modified each year with the adoption of the budget to increase or decrease in accordance with the most recently published federal government, Bureau of Labor Statistics Indicator, Consumer Price Index (CPI-W U.S. City Average) U.S. City Average. The most recently published Consumer Price Index on May 13, 2006, shall be used as a base of 100 and the adjustment thereafter will be to the nearest $50.00. [Using the current CPI, the campaign contribution limit amount is modified to $350.00.

A candidate can also contribute (or, loan) personal funds to his or her campaign. There is no limit on the amount. The best example of this is Mayor Steve Adler. During his 2014 campaign, he loaned himself more than $400,000.

Otherwise, there are few limits on the total amount of contributions – unless, of course, the candidate has signed Austin’s Fair Campaign contract.

A lawsuit filed by Council Member Don Zimmerman challenging this limit is currently awaiting a judge’s decision. The lawsuit claims that both the per-person $350 limit and the $36,000 “outsider” limit “makes it difficult for Zimmerman to amass sufficient funds to engage in communications such as direct mail advertisements to constituents/district voters, and television and radio advertisements, which are necessary to mount an effective campaign, as well as other campaign activities."

Expenditures
Council member Greg Casar, who is running for re-election in District 4, totals his expenditures in his first campaign filing for this election.

There are no limits on expenditures (again, unless the candidate has signed Austin’s Fair Campaign Finance contract). There are certain reporting requirements though – a candidate must report expenditures made on his or her behalf, unless the candidate was unaware or did not consent for a person or committee to spend on behalf of his or her campaign. So, if a PAC spends $500 on signs for a candidate without that candidate knowing, that PAC must report the expenditure itself.

Code Section 2-2-32 et seq. requires special reporting of such independent expenditures. A form identified as Schedule ATX 1 “INDEPENDENT EXPENDITURES NOT BY A CANDIDATE” must be filed with the City Clerk’s office by every person other than a candidate or a candidate’s committee who expends a specified aggregate amount during any calendar year to promote the election or defeat of any candidate in a City election. Such form must be filed within the deadlines specified in the cited Code section.

Political Action Committees (PACs)

While PACs are treated as individuals – and therefore subject to the $350 cap – there is only limit on how much money candidates running for council or mayor can accept from a PAC. And that’s when the PAC is considered a small-donor committee. The city defines it this way:

A small-donor political committee is a political committee which has accepted no more than $25 from any contributor during any calendar year, has had at least 100 contributors during either the current or previous calendar year, has been in existence for at least six months, and has never been controlled by a candidate.

A candidate can only accept up to $1,000 from a small-donor PAC. Otherwise, have at it, would-be mayors and Council members.

This story was produced as part of KUT's reporting partnership with the Austin Monitor. It's been corrected to accurately reflect contributions to Council Member Don Zimmerman’s campaign.