Public Policy Forum
WRA, Coalition Members Win Lawsuit Over Unconstitutional Campaign Finance Reform Proposal
by Joe Murray
On Dec. 11, 2002, U.S. Federal District Judge Barbara Crabb ruled that changes to Wisconsin's campaign finance laws last session are unconstitutional. With Crabb's ruling the six-month old law ceased to exist. The WRA was the lead plaintiff in the lawsuit.
Mike Wittenwyler of LaFollette, Godfrey & Kahn, one of the lead attorneys for the coalition that filed the lawsuit last July, said, "The court held that the law violated First Amendment values by prohibiting some forms of political speech and restricting others."
Specifically, the Legislature passed a law that would restrict speech by requiring independent groups who plan on broadcasting "issue ads" to give the State Elections Board 30 days notice of their intent to advertise around campaign time. Crabb ruled that the provision requiring prior notice was "prior restraint" of free speech and flatly unconstitutional.
Judge Crabb's ruling is a significant victory for the WRA and other members of the coalition who filed the lawsuit. When the Legislature inserted the campaign finance reform provisions into the budget repair bill, the WRA and coalition members warned reform advocates that the 30-day advance notice requirement (along with other provisions) would be found unconstitutional in Wisconsin as it had in Florida.
But reform advocates didn't seem to care if this provision would stand up to constitutional muster until Legislative leadership included a "nonseverablity" clause, which meant if any provision of the law was found unconstitutional, the entire package would be declared void.
Campaign finance reform advocates such as Common Cause and the Wisconsin Democracy Campaign have pushed several unconstitutional proposals over the last five years. These groups have argued that in the interest of removing what they believe to be the corrupting influence of special interest money, state and federal courts might be persuaded to throw out twenty-five years of case law protecting free speech. By including the nonseverability clause in the package, their legal bluff was called. Reform advocates angrily denounced the entire reform package as a "sham" proposal and the "nonseverability" clause as a "poison pill" designated to doom the entire package to failure. They were right. The package was doomed. And so were the reformers arguments that the Court would reverse their decisions on unconstitutional restrictions regarding free speech.
Coalition attorney Wittenwyler said the ruling also shows that passing unconstitutional laws can be costly for taxpayers. After Attorney General James Doyle refused to defend the law passed by the legislature and signed by outgoing Governor Scott McCallum, the McCallum administration was forced to hire outside counsel to defend the unconstitutional provisions at considerable cost to taxpayers.
And the cost to taxpayers will only escalate when the plaintiffs in the case (WRA and coalition members) ask the Court to require the state to reimburse them for attorney's fees and other costs in bringing the case.
Where Do We Go From Here?
With criminal charges pending against four legislators and the caucus scandal investigation continuing, legislators and Governor-Elect James Doyle have stated their desire to pass comprehensive campaign finance reform sometime in 2003. In the current political landscape, it seems likely some plan will pass.
The first proposal of the new session has already been introduced by State Senators Mike Ellis (R-Neenah) and Jon Erpenbach (D-Middleton). The Ellis-Erpenbach Bipartisan Campaign Finance Reform Act of 2003 is both comprehensive and expensive.
The biggest problem with the Ellis-Erpenbach proposal is it contains several provisions that are, once again, unconstitutional. As they have in the past, certain legislators and reform advocates continue to propose unconstitutional ideas that stand almost no chance of surviving a legal challenge and, even worse, may end up costing taxpayers money for legal fees associated with any potential lawsuit.
If reform-minded legislators and groups such as Common Cause want to accomplish their goal of reforming the way political campaigns are funded in Wisconsin, they will have to accept the fact they cannot force unconstitutional laws down the throats of politically active organizations to silence their voice during election years.
Getting serious about campaign finance reform means advocates will have to accept certain realities before any comprehensive proposal can become law:
- The state is broke. Legislators and the new governor face the daunting task of balancing a state budget that is almost $3 billion out of balance over the next two years. Any plan that requires millions of dollars from taxpayers to fully fund political campaigns will not pass. A compromise funding source with politically acceptable levels of public funding must be found to encourage candidates to participate.
- Reformers must stop their assault on constitutionally protected free speech. Individuals, trade associations, corporations, small business and labor groups, all have First Amendment rights that cannot be trampled on. Judge Crabbs ruling sent a clear message to elected officials that they should not use the caucus investigation into legislative misconduct as a reason to restrict or threaten free speech rights.
- Comprehensive campaign finance reform must be balanced and fair. Partisan plans that favor one side over another (business vs. labor) will not pass with the Republicans in control of both houses of the legislature and a Democrat in the governor's mansion.
- The statutory system for reporting campaign contributions and disbursements must be improved. Improved disclosure requirements and greater access to campaign finance data through prompt electronic filing will increase public awareness of spending in political campaigns.
- Candidates who accept limited public financing of their campaigns must have the ability to respond to independent expenditures and issue ads directed against them. "Matching grants" funded by general purpose revenue are too expensive and politically divisive. Alternative funding must be established to allow victims of non-candidate spending to respond to attacks during campaigns.
WRA Will Be Involved
For seven years the WRA has supported campaign finance reform proposals. As the new governor and Legislature get down to the business of negotiating a comprehensive reform proposal, the WRA will once again come to the table willing to compromise on comprehensive reform that protects our ability to discuss issues through constitutionally protected First Amendment free speech.
If the newly elected Legislature and reform advocates want to accomplish their goal of providing additional money and incentives for candidates to accept public funding, there has never been a better time to reach their goal.
If reform advocates continue their attempts to restrict or eliminate free speech rights, we may be talking about campaign finance reform for years to come.
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Achieving a No Tax Increase Budget
by Michael Theo
It seems like everyone today opposes tax increases to balance the $3 billion state budget deficit. This includes our new Democratic Governor Jim Doyle, who has held ever since the primary that he will not support increased taxes to fix the state's budget problems. This no-tax approach is also supported by the new Republican Assembly Speaker John Gard and the new Republican Senate Majority Leader Mary Panzer. For the most part, Assembly Republicans increased their majority and Senate Republicans took control, based largely on campaigns that opposed new taxes.
So, is it really possible to balance this state budget without new taxes-cutting government spending alone? Good question. This is the question State Senator Bob Jauch (D-Poplar) asked of the Legislative Fiscal Bureau-the legislature's respected budget office.
To answer this question, the Fiscal Bureau created several revenue scenarios, assuming tax revenues would grow at annual rates of zero, one percent, three percent and five percent. Under each revenue projection, they then calculated the proportional cuts how much each state agency would have to make from their current expenditures in order to balance the budget through spending reductions only. The cuts necessary to balance the budget without new tax revenues were substantial.
For example, assuming a three percent revenue growth (which based on today's projections seems somewhat generous), these major state programs would have to cut the following amounts:
| Corrections |
$ 65.4 million |
| Health and Family |
$168.9 million |
| Services School Aids |
$429.4 million |
| Aid to Municipalities |
$150.1 million |
| UW System |
$81.1 million |
In all, state spending would have to be cut a total of $995.8 million in the first year of the biennium and $845 million in the second year, to balance the budget if revenues grow at an annual rate of three percent.
If actual tax revenues are below projections, the size of spending cuts for these and other programs would have to be even larger. If revenues grow by only one percent, total spending would have to be cut by $1.2 billion in the first year and nearly $1.3 billion in the second year. If revenues are flat, with no growth, spending cuts would have to be $1.3 billion in year one and nearly $1.5 billion in year two, in order to balance the budget in the biennium without raising taxes.
Can this be done? Sure, but the political pain for legislators will be substantial. Moreover, some state spending cuts such as school aids and shared revenues to municipalities, could result in higher property taxes at the local level to offset the loss in state funds. Such a tax shift would allow the governor and the state Legislature to say they kept their promise of not raising taxes, yet taxes paid by the average taxpayer would still go up. Finally, local schools and municipalities could look to increased fees to make up for lost state money. Fees such as impact fees on new developments or fees for government licenses or permits could be increased to fund local government spending currently paid for by state funds.
No doubt Governor-Elect Doyle and the Republican-led legislature have their work cut out for them. As budget scenarios are being developed, everyone is watching the economic news to see how much revenue is available so they can determine how much spending has to be cut. At the end of the day, the Wisconsin constitution requires a balanced budget and a balanced budget we will have-regardless. Stay tuned.
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