In the Nation's Interest

NY Business Leaders: It’s Time for Campaign Finance Reform

New York State's business leaders have weighed in: they are deeply concerned about the role of big money in the state's politics and would support comprehensive reforms.

The Committee for Economic Development (CED), together with the Brennan Center for Justice, last week announced the results of a new Zogby Analytics poll of 300 New York State business leaders. Poll results show that New York business leaders broadly support major changes in how state campaigns are financed:

  • 70% of respondents support major changes in the way election campaigns are financed. 88% overall support making changes of some kind.
  • 62% of respondents believe corporate donations are bad for the political process.
  • 69% of respondents believe that elected officials in New York are more concerned with the needs of those who finance their campaigns than average New Yorkers.
  • 61% of respondents believe that the level of corporate influence on election outcomes is bad for the political process.

Business leaders recognize the value of competition – both in business and politics. In business, competition is a healthy force that encourages enterprise value, stimulates greater availability of goods and services, economic efficiency, and, ultimately, innovation. The interactions and synergies generated by competition are an essential element of a properly functioning marketplace. In politics, elections serve as the principle means by which citizens express their political preferences and hold elected officials responsible for their actions. Current campaign fundraising practices, however, do not serve the public's best interest or the interests of the business community.

Candidates today rarely undertake the type of broad-based fundraising efforts that involve a larger share of the electorate in the financing of campaigns. Instead, the current system promotes a pay-to-play mentality that encourages political giving as a means of influencing legislative decision-making and induces rent-seeking efforts by donors or rent-extraction efforts by politicians. This structure increases the risk of long-term interests being sacrificed for short-term gains. Ultimately, donor influence can serve to undermine market forces by facilitating policies or regulatory requirements that diminish competition or unduly advantage particular firms or industries.

These poll results showcase that a majority of New York business leaders, seven in ten surveyed, want changes in how campaigns are financed. These findings should bolster prospects for proposals seeking to overhaul outdated campaign finance laws, such as those being advanced by reform advocates in New York State and Governor Cuomo. In his 2012 State of the State address, the Governor pledged to introduce a campaign finance reform package that would include a small donor matching program. Such a system would provide strong incentives for candidates running for state offices to reduce their reliance on big money donors by providing a multiple match from public funds for small dollar contributions from constituents.

Indeed, the CED poll indicates a solid base of support among New York State business leaders for this type of system. When the small donor matching system is described in terms that include other reforms in a comprehensive proposal for change, support among business leaders is overwhelming:

  • 80% of respondents support creating a system of voluntary public campaign financing in New York that limits the size of political contributions candidates can accept.
  • 82% support creating a system that encourages candidates to fund their campaigns through a broad base of small dollar donors.

Thoughtful business leaders recognize that innovation in business and progress on job creation does not come from pursuing short-term gains in a pay-to-play culture, but through competition and innovation in an open marketplace. It's time for change in the campaign finance system and it's time legislators take a hard look at how states and even cities are incorporating small donor matching programs for political campaigns. A new system that incentivizes candidates to reach out to their own constituents, reassures voters that the system is there for the benefit of the average person, and encourages diversity in the pool of candidates for office would be a good thing for the average constituent, U.S. business and our nation overall.

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