Report: Minnesota’s political refund program is ‘healthier’ model for country


Minnesota has the highest level of participation by small political donors in the country, according to a new study by the Campaign Finance Institute. But that status is threatened by Gov. Tim Pawlenty’s elimination of the state’s Political Contribution Refund program.

In the 2006 election cycle, the most recent for which data was available, 45 percent of Minnesota’s political donors gave $100 or less. By contrast, in 20 states less than 10 percent of contributions were from such small donors. The study examined the 36 states that held both gubernatorial and state legislative elections in 2006.

Under the Political Contribution Refund (PCR) program, enacted in 1992, individuals are eligible for a $50 rebate each year on donations made to local political parties and state candidates. But Pawlenty stripped out the program’s entire $10.4 million budget for the current biennium as part of his plan to unilaterally close the state’s $2.7 billion deficit.

Michael Malbin, executive director of the Campaign Finance Institute, says that Minnesota’s refund system is a model for promoting political engagement and effective governance.

“The states are suppose to be laboratories for reform,” Malbin notes. “Minnesota is the only state in the country that has this kind of a program. It is a big success. … When it goes to zero the laboratory’s gone.”

CFI also released data from a 2006 survey gauging how the program influenced the behavior of candidates and donors. For instance, one third of non-incumbents reported that they believed their small donors gave “mostly” because of the rebate program, while 23 percent of incumbents expressed the same sentiment. In addition, more than half of the candidates reported that they solicited donors they otherwise would have ignored if the program didn’t exist.

Less wealthy donors also reported that the program had a strong impact on their decision to make a contribution. For instance, 62 percent of donors making less than $40,000 stated that the refund system affected their decision to contribute, while roughly half of the donors with incomes between $40,000 and $100,000 expressed the same sentiment.

The bottom line, according to Malbin, is that politicians in Minnesota are less reliant on money from special interests such as corporations and labor unions than in other states.

“They’re getting it from the people who are lobbying them,” Malbin says of other states. “In Minnesota they’re getting it from the people they represent. It’s a much healthier system.”

Common Cause Minnesota is now seeking to rescue the PCR program. The advocacy group intends to lobby legislators to reinstate the system as early as possible when they reconvene in January, arguing that it has been instrumental in spurring political involvement and effective governance.

“I think Minnesota really is starting to lose that good-government reputation,” says Mike Dean, executive director of Common Cause Minnesota. “If we lose the PCR program, it’s going to be a quick slide.”

The nonprofit group is also mulling another alternative to save the refund program: suing the governor. Dean believes the governor has overstepped his executive authority by using his so-called unallotment power so broadly.

“We’re definitely heading in that direction at this point,” he says of a potential lawsuit. “We’re concerned that his use of the unallotment process is an abuse of power and it needs to be challenged.”

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