Two of the candidates at the top of the DFL ticket this fall have opted out of the state’s public campaign subsidy program, freeing them to exceed spending caps that come in exchange for public dollars.
Gov. Tim Walz and Secretary of State Steve Simon informed the Campaign Finance Board last week they would not submit requests for funding. As of the most-recent campaign finance reports, both campaigns had already raised more money than the program would have allowed them to spend had they enlisted.
Endorsed GOP candidates for both jobs – Scott Jensen for governor and Kim Crockett for secretary of state – have submitted applications to the board that could net them hundreds of thousands of dollars in the governor’s race and tens of thousands of dollars in the secretary of state race.
In the race for attorney general, the pattern is opposite, with incumbent DFLer Keith Ellison opting into the program and accepting spending limits while the two major GOP candidates have not. Both endorsed GOP candidate James Schultz and 2018 nominee Doug Wardlow have informed the CFB that they will not be accepting public subsidies or abiding by the spending limits.
Contributions caps are the same for all candidates, but those who take public dollars can only spend a set amount. For campaigns for governor in 2022, the base spending limit is $4,232,700. That increases for candidates who are running statewide for the first time to $4,655,970. Under the law, Jensen would have a higher cap than Walz. And had Jensen been involved in “closely contested primary,” his campaign would be allowed to spend $5,587,162. The state campaign finance board does not expect the GOP primary to be “closely contested,” despite the presence of Bob Carney, Jr. and Joyce Lynn Lacey on the ballot with Jensen. Closely contested is defined as the winner receiving fewer than twice as many votes as his or her closest rival.
The state’s public campaign subsidy program has two parts. The first is a direct tax subsidy from money appropriated by the Legislature and from money collected from taxpayers via the $5 income tax check off. Participation in the latter funding method has been declining with fewer than 5 percent of taxpayers checking the box.
Candidates who want public money must sign a subsidy agreement, raise a threshold amount from small donors and win the primary. The second part of the program is a contribution refund program through which donors can submit a request for state money that matches donations. The refunds are capped at $50 per person or $100 per couple but can only benefit candidates who signed the public subsidy agreement.
Jeff Sigurdson, the executive director of the Campaign Finance Board (CFB), said there are two reasons a candidate might opt out of getting money from the program – philosophical and strategic. Some candidates disagree with any taxpayer funding of campaigns, he said. But others are confident they can raise more than the spending caps would allow. And the subsidy agreement also caps how much a candidate can spend from their own resources – $20,000 for governor, $12,500 for attorney general, $10,000 for secretary of state and auditor and $5,000 for legislative races.
“There are candidates on both sides who view it as a tactical or strategic decision,” Sigurdson said. “I think it’s fair to say that if you decide to go without the public subsidy, you’re very confident in your ability to raise money.”
Sigurdson cited two examples of the latter: When former governor Tim Pawlenty first ran, he took part in the program, but when running for reelection four years later at a time when his fundraising prospects had improved, he did not.
In 2010, when Mark Dayton was running for governor against an endorsed DFL opponent, he self-funded his campaign with $3.92 million, something that would have been blocked had he signed a subsidy agreement. Four years later when self-funding wasn’t necessary, Dayton did take public subsidy money worth $541,000.
Walz appears to be following the Pawlenty pattern. In 2018, Walz was a first-time statewide candidate in a contested primary. He abided by the spending limits and received $480,000 from the state – about 10 percent of his total campaign spending. This year, as the incumbent running for reelection, Walz is foregoing the state subsidy and the spending caps. His cash on hand as of July 18 was $4.980 million and has raised $6.3 million.
“Our campaign made the spending cap decision to ensure we could properly support the statewide campaign we think this race deserves,” said Walz campaign spokesperson Darwin Forsyth. Walz and Lt. Gov. Peggy Flanagan “are humbled by the outpouring of support they’ve received and want to invest in an expansive operation that gives all Minnesotans an opportunity to participate in their campaign to build One Minnesota.”
Jensen has raised $1.825 million and has $581,000 cash on hand as of Monday’s filing. Under the rules of the program, a candidate who signs the agreement who is running against a candidate who has not gets a bigger subsidy. So Jensen’s campaign could see several hundred thousand more in subsidy with the Walz decision to opt out.
Two other candidates for governor told the CFB they would not take state money – DFLer Ole Savior and Hugh McTavish of the Independence Alliance.
Simon has taken part in the public subsidy program in his two previous runs for secretary of state. In 2018 his campaign accepted nearly $55,000 and in 2014 it accepted $51,677. But for this campaign cycle, Simon’s cash on hand as of July 18, the most-recent reporting period, was $678,985 – already in excess of the $483,900 it would be allowed to spend under the spending limits.
Simon campaign spokesperson Risikat Adesaogun said Simon has abided by the agreement until this election.
“Steve did not make this decision lightly,” she said. Secretaries of state are facing challenges from those who still question the results of the 2020 election and the campaign expects large amounts of outside money to flow into the state.
“Things are a lot different now. We’re at a really critical point for democracy” Adesaogun said. “Millions of dollars are being spent around the country by groups seeking to beat incumbent secretaries of state from both sides.” Adesaogun cited the criticisms from election deniers aimed at Georgia GOP Secretary of State Brad Raffensperger, who certified that state’s election despite direct pressure from President Trump not to.
Simon’s endorsed GOP opponent Kim Crockett did not opt out of the program and can spend up to $532,290 as a first-time candidate. As of May 31 her campaign had raised $165,397 and had $76,914 on hand.
Another GOP candidate for the office, Erik van Mechelen, has opted out of the subsidy program.
In the race for attorney general where the GOP candidates have opted out of the subsidy program, DFL incumbent Keith Ellison has raised $784,784 and has $572,741, endorsed GOP candidate Schultz has raise $405,372 with $113,299 on hand and 2018 GOP nominee Doug Wardlow has raised $279,716 with $34,536 on hand.
Sigurdson said that not all campaign spending falls under the spending caps. For example, a candidate committee can give unlimited amounts to their political party, can spend on what are termed non-campaign expenses such as legal and accounting fees and food for staff or fundraisers and can hold up to 25 percent of the spending cap amount for the next election cycle.
Under the public subsidy program, Ellison would be allowed to spend $725,800, more than he has already raised. “We believe in organizing year-round, so we’re building a strong operation to sustain that,” said campaign manager Jeanne Stuart. “Our campaign has signed a public subsidy agreement because we believe in grassroots campaigning. We are preparing for any circumstance to ensure a fair fight in November.”
For state auditor, GOP candidate Ryan Wilson has opted out of the program while incumbent DFL candidate Julie Blaha will take part.