Casino Gambling Funded Fair Elections
Small Donor Empowerment Funded by Casino Licensing Fees
New Ideas to Remake the Old Albany Culture Priority #1: Campaign Finance Reform

Read the Samuels Plan: Full Whitepaper or Whitepaper Summary on A Proposal to Use the Proceeds of Casino Gambling to Fund Education and Campaign Finance Reform

“If our political institutions were perfect, they would absolutely prevent the political dominations of money in any of our affairs.” Theodore Roosevelt, Osawatomie Kansas, August 31, 1910

Authored by

Two Quality Solutions to Solve the Funding of New York State Elections

Both in his 2010

campaign pledges and in his 2011, 2012  and 2013 State of the State addresses,  Governor Andrew Cuomo called for comprehensive reform of New York’s campaign finance stating “New York City’s public financing system provides a good model for statewide reform.”

Using “public” funds is one excellent option if the newly elected legislature will pass and Governor Cuomo will sign it.  But given there is not a unified Democratic controlled State Senate, the votes may not be there to pass “public” financing of elections. 

If not, there is a second innovative source of funds:

Use the billion dollars from gambling corporations like Genting to fund getting money out of politics and for education.

“It is time for Governor Cuomo to lead getting reform done and for it to be effective for the 2014 elections.” challenged Bill Samuels. “There can be no repeat of the false promises and universally violated pledges that occurred earlier this year with redistricting reform.”

Cuomo’s popularity remains high.  But the Governor has not used his approval ratings and other amassed political capital to get campaign finance reform done in his first three years in office.  Citing a lack of political will, particularly in the 2013 Republican controlled State Senate, the Governor did not push hard to get anything passed.

New York City’s “public” funding of elections, the model most discussed for the State, is paid for from the City’s General Fund.  However, Senate Republican Majority Leader Dean Skelos has consistently reaffirmed his skepticism of “public” financing of elections based on the New York City model.

If Governor Cuomo and the newly elected Legislature are to successfully pass election finance reform in the 2013 legislative session they must either overcome this objection to using taxpayer dollars from the General Fund or identify an alternative funding source to pay for the cost of elections.

 Bill Samuels, founder of New Roosevelt, offers an innovative alternative solution:

“pay for the reform of campaign finance by linking it to the recently passed State Constitutional amendment to allow seven additional casinos to be set up in New York.”

“The idea is as counterintuitive as it is powerful.”

“After Sheldon Adelson owner of the Las Vegas Sands Corp. has put so much money into independent expenditures in the 2012 Presidential Election, it would be beautifully ironic to have casino dollars used to get money out of politics in New York State,” said Samuels.

Curiously, the proposed Constitutional Amendment on Casino gambling does not identify any specific earmark for either of these two revenue streams. The amendment only adds the following 17 words: “and except casino gambling at no more than seven facilities as authorized and prescribed by the legislature...”

Samuels specifically suggests that the annual licensing fees be used to fund elections and the sharing of Casino revenues be dedicated to education as is currently done for the lottery:

(1) Annual Sales Revenue (After Prizes but Before Cost a.k.a. AGR) Sharing From Casinos - $250 million to $1 billion to Fund Education

Revenue sharing in other states is normally based on a percentage of adjusted gross receipts (AGR) of casinos, defined as the wagering receipts after winnings are paid out but prior to the Casino’s operating expenses.   Casinos in New Jersey, where the rate is 8%, generate over $250 million annually in revenue for the state. In Illinois, where the rate is 50%, $489 million is generated annually.

(2) An Annual Operating License Fee Per Casino - $56 Million a Year Used to “Get Money Out of Politics”

We would use the licensing fees of approximately $8 million a year from each of the seven casinos authorized under the amendment to raise the $56 million annually which will raise the $224 million necessary to fully fund state elections over a four year cycle.

The Change could be dramatic: In 2010 in Connecticut 97% of contributions came from individuals compared to 49% in 2006 before campaign finance reform was passed.  (See Chart “Campaign Contributions from Individuals versus Other Sources).  Other sources declined from 51% in 2006 to a miniscule 3% on 2010.

In fact, according to Connecticut:

“All successful Statewide candidates were able to turn the old system on its head by opting to publicly fund their campaigns and focus only on raising $5 to $100 contributions.”

Samuels challenges Governor Andrew Cuomo, Assembly Speaker Sheldon Silver and Senate Republican Majority Leader Dean Skelos to do the same for New York State.

Historic Opportunity to Get Money Out of Politics:  Dedicating Casino Gambling License Fees and Adjusted Gross Revenue Sharing to Fund Campaign Finance Reform and Education

Most of the potential licensees for the seven proposed casinos will be multi-billion dollar companies, some are likely to be:

  • $15.2 Billion – Genting Group
  • $9.41 Billion – Las Vegas Sands Corp.
  • $8.93 Billion – Caesars Entertainment Corporation
  • $7.849 Billion – MGM Mirage
  • $2.987 Billion – Wynn Resorts

Total licensing revenue for campaign finance would be $56 million a year, $112 million over two years, and $224 million over four years.   (See Chart “Comparison Spending Over 4 Years, 2007 – 2010”).

This would be enough to cover $70 million currently spent every two years on off year legislative elections, and for the $150 million in funds needed for statewide and legislative elections that occur together every four years (See Chart “Comparison Spending Over 4 Years, 2007 – 2010”).

It is essential that we begin funding of elections at our earliest opportunity which would be 2014.  While revenue from seven casinos will not be immediately available for 2014, $150 million could be allocated, which is less than 1/10 of a percent of the $132.5 billion dollar state budget.  This amount would later be repaid from future licensing revenues from the seven casinos.

This solution would take money from a special interest and use it to limit not only their influence but the influence of all other special interests in Albany, returning the voice of voters and in another blow to Citizens United finally get big corporate money out of politics.

Campaign Finance of Elections in New York State

Campaign Spending in Millions

Over 4 Years (2007-2010)

 

2008

2010

'08 + '10

Governor

0

40

40

Statewide (Comptroller + Attorney General)

0

36

36

State Senate

47

48

95

State Assembly

23

23

46

Total

70

147

217

Statewide Elections Only Occur Every Four Years with

State Legislative Elections Occurring Every Two Years

In 2010 and 2012, the last statewide election year, New York State campaign spending totaled $147 million:

  • $42 million for 62 State Senate seats in 2012,
  • $26 million for 150 State Assembly seats in 2012,
  • $40 million for Governor, in 2010 and
  • $36 million for all other statewide candidates like Comptroller and Attorney General in 2010.

In 2008, a year with legislative but not statewide elections, New York State Campaign Spending totaled $70 million:

  • $47 million for 62 State Senate seats, and
  • $23 million for 150 State Assembly seats.

“Public” Financing of Elections in New York City

The model for New York State that is receiving the most attention is the New York City model which is funded from the general budget.  In New York City there has been consistent political support for Public Campaign Finance legislation passed by City Council with a Democratic supermajority, but because of its source in tax payer funding it may not be able to pass the New York State Legislature.

New York City provides taxpayer supported matching grants for participants who agree to spending limits and meet two thresholds for the amount raised and number of donors from their district.

 

Mayor

Public Advocate
& Comptroller

Borough
President

City
Council

Minimum Funds Raised

$250,000

$125,000

$10,000 – 50,094*

$5,000

No. of Contributors

1,000

500

100†

75††

 

In 2013, the last New York Citywide election year, voluntary participants received $11 million in matching grants for City Council races in 51 districts and $16.5 million for borough and citywide races. The total cost to taxpayers was $27 million.

Voluntary participants included 91% of City Council candidates.  Notably, Mayor Michael Bloomberg did not elect to opt in to “public” funding, and therefore to accept spending limits (as such the cost of public financing the Mayoral race was lower than otherwise would be in a General Election with two publicly funded candidates).

New York City has banned corporate, partnership and limit liability company contributions and placed limits on individual contributions to $2,750 for legislative candidates, $3,850 for borough wide candidates and $4,950 for aspirants for citywide office.


Article I - Bill of Rights

 
Lottery for the Benefit of Education
 
§9(1) … no lottery … or any other kind of gambling, except … the net proceeds of which shall be applied exclusively to or in aid or support of education …
 
Gambling on Horse Race to Support Government
 
§9(1) … betting on horse races as may be prescribed by the legislature and from which the state shall derive a reasonable revenue for the support of government …
 
Cuomo PROPOSED Casino Gambling Amendment with No Earmark
 
§9(1) … and except casino gambling at no more than seven facilities as authorized and prescribed by the legislature …
 
NEWS BEHIND THE CONSTITUTION
Vegas Inc
Richard Velotta
Friday, June 15, 2012
 Is Nevada short-changing itself by requiring interactive gaming license applicants to pay $500,000 for an initial one-year license and $250,000 a year to renew it? 
Link to Original Source - Link to Cached Version
 
SOLUTIONS
Non-legislative proposals from community groups, advocates and thought leaders.
A selection of relevant solutions from other states.

Citizen Funded Elections

According to the National Conference of State Legislatures 25 states currently have programs that provide government funding for use in election campaigns  Existing programs provide funding to individual candidates, political parties or incentives to citizens for their contributions.  Many states will provide just one of these, while  some states provide all three.

Funding Parties and Incentivizing Citizen Participation

Ten states offer funding of political parties with seven offering a tax check-off between $1 and $5 and three offering a tax add-on between $2 and $25.

Nine states offer tax incentives for citizen contributions with five offering tax credits of $25 to $640, three offering tax deductions of $100 or $500, to tax payers for political contributions, or in Minnesota a tax refund of up to $50 for contributions to participating candidates or parties.

Funding Candidates for Public Office

Sixteen states provide government funding of elections in two voluntary forms, full financing of elections that is often referred to as “clean elections” and the other is partial funding of elections that often involve matching of contributions for program participants who must agree to limit campaign spending. 

“Clean election” full financing is available to statewide candidates in six states and legislative candidates in four states, with participants prohibited from taking any private contributions.  In Connecticut, State House candidates must raise $5,000 and State Senate members $15,000 with 150 or 300 contributions of $5 to $100, respectively, with primary public funding of $10,740 and $37,590 in the primary and $26,850 and $91,290 in the general election, respectively.  Under the

Partial campaign finance is available to statewide candidates in ten states and legislative candidate in four of those states, providing matching funds to participating candidates.

 

 

A Project of the Howard Samuels New York Policy Center, Inc.
Web Development by Kallos Consulting 

Creative Commons License