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The primary election is on June 25.  Chances are you’re ramping up your campaign and spending money on petitioning and visibility.  It sure would be nice to get public funds now, but they’re not coming until May 13 at the earliest.  So, what should you do? Well, you have options, but each comes with compliance considerations. 

Going Back to Well-Off Contributors

Let’s start with the most obvious; aggressive fundraising.  You probably have supporters from your district who have given you $100, $150 or $250.  Going back to proven donors to pay for specific efforts in your campaign might seem like the low hanging fruit.  But hold on.  Remember, a matchable contribution becomes non-matchable when a contributor from your district exceeds $250 in aggregate donations.  The Public Campaign Finance Board will flag it and deny your campaign the matching funds, a potential loss of $2,300. 

If you need to go back to contributors with the potential to make additional large contributions, start with your out-of-district supporters.  Those contributions were never matchable anyway.  Just remember your contribution limit, $5,000 for Senate and $3.000 for Assembly per election. 

Bridge Loans

https://thenounproject.com/browse/icons/term/bridge-loan/

Another option is to obtain a bridge loan until you get your expected public funds.  Loans are permitted.  HOWEVER, the portions of loans that are not repaid by election day are considered contributions. If you don’t receive the expected public funds and have a large loan repayment outstanding, you will be penalized.  

The PCFB has not published guidance on penalty assessments, but if the unpaid loan is large enough, they may consider it a “fundamental breach of certification for participation” in the Program.  That would permanently disqualify you from receiving public funds and trigger a demand for repayment of any public funds you may have received, along with other penalties.  If you obtain a loan in anticipation of receiving public funds, proceed with caution, and understand the risks going in. 

Loans must be formalized in a loan agreement between the campaign and the lender and executed at the time the loan is made.  The agreement must contain all the terms of the loan.  Of course, the loan and repayments must be disclosed in your financial disclosure statements. 

Conclusion

Senate Bill 7564, passed by the legislature this past summer, would have set earlier public funds payment dates,. But the bill was vetoed by the Governor.  So we’re stuck with a first possible payment date of May 13, just 43 days before the primary.  Whatever you do to tide you over until then, make sure you do it with an eye towards compliance. 

I blogged about the campaign finance bill that was passed by the legislature back on On June 21, 2023.  I must admit, I assumed it would be signed within a few weeks.  But here we are three months later, and it still has not been delivered to the Governor. 

The Unsigned Bill v. The Law Today

The bill amended the Public Campaign Finance Program. It included changes to the threshold to receive funds, caps, matchability and payment dates.  The law as it currently stands gives the Public Campaign Finance Board the discretion to make first payments “as soon as practicable.”  The Board’s official handbook says that as soon as practicable means Spring 2024 for the primary election.  However, the amendment requires the Board to make a payment to eligible candidates on December 15, 2023 – less than 3 months away!

The Sooner You Get Your Public Funds, the Better

Up to 25% of the maximum amount of public funds available to your campaign will be distributed in December under the bill. That’s $36,250 for Assembly candidates and $93,750 for Senate candidates. The early infusion of cash can pay for fundraising events, petitioning, early voter contact, and hiring campaign staff.

Early payment also gives campaigns a degree of certainty about the budget going forward. If you receive a December public funds payment, the Board has confirmed you’ve met the threshold and will be entitled to additional matching funds down the road. Before you receive that first payment, you will not know if the public matching funds you’ve applied for are coming. You may find yourself with two budgets, one for the $75,000 campaign if you don’t receive public funds, and $450,000 if you do. And without an early payment, you may not know which campaign you have until two months or less before the primary.

So…?

When will this uncertainty be cleaned up? When the Governor signs or vetoes the bill.  Until then, we don’t know.  The bill can be sent to the Governor anytime before the end of this calendar year. Once sent she can sign it or veto it within 10 days.  If she does not act on it, it becomes law.  If the bill is not signed by January 30, 2024, it automatically does not become law.

With all this uncertainty, you should prepare now if the law is signed. Obtaining the public funds your campaign is entitled to this year, instead of next Spring, is a big advantage. Worst case scenario is you have raised money and positioned the campaign to receive public funds at the first payment date next year.  

What Should You Do Now?

The best advice is to start now! If you have an old campaign committee, you need to zero it out and close it.  You must open a new committee, get your EIN, bank account, find a treasurer, and apply to the Public Campaign Finance Program.  Only once all of that is complete can you start raising money from the district to meet the necessary financial threshold.

And of course, Stoll, Glickman & Bellina is here to help.