Transparency and Campaign Spending in Minnesota, Report 6: State spending in Minnesota* Kathryn Pearson Associate Professor Department of Political Science University of Minnesota [email protected] Lawrence R. Jacobs Mondale Chair Humphrey School of Public Affairs University of Minnesota [email protected] February 25, 2019 * This is a project of the Center for the Study of Politics and Governance at the Humphrey School of Public Affairs, University of Minnesota. We are grateful for the contributions of Madeline Salucka and Matthew Motta. The authors are solely responsible for the content of this report. Other parties who use or draw conclusions from this research are solely responsible for their own views, which do not necessarily reflect those of the original authors. This research is supported by a grant from the McKnight Foundation. 1 Executive Summary Campaign Spending in Minnesota Elections during 2018 General Election Ø Money Bombs Hit Minnesota Elections. Minnesota’s elections for Governor, Attorney General, and the State House were hit by “Money Bombs” in the final days of the campaign. Overall spending surpassed $42 million – a 25% hike during the last two weeks of campaigning. This is on top of the huge spending on federal elections –$105 million. Ø Overall spending to support DFL candidates for state government was greater than for GOP candidates – and grew in the closing days of the fall campaign. Page 3. Late spending in the Governor’s race comprised the largest amount of late spending, benefitting the DFL’s winning candidate Tim Walz over Republican challenger Jeff Johnson. The most striking money bomb was dropped in the Attorney General race where spending rose by 51% in the last two weeks and mostly benefited DFL candidate Keith Ellison (whose spending increased 58%) over his GOP challenger Doug Wardlow. Ø DFL candidates for Minnesota House of Representatives received more campaign support than GOP candidates. The DFL’s retaking of the majority was supported by a surge of spending in the campaign’s closing days that reversed an earlier GOP advantage. Spending to support DFL candidates for the Minnesota House of Representatives exceeded spending to support their Republican counterparts in nearly twice as many races – 60 compared to 32. Pages 13-14 Ø Independent expenditures from parties, groups, corporations, unions, and associations are flooding Minnesota. Pages 4-7. Ø Big donors dominate the gubernatorial contest. The majority of money in both candidates’ campaign coffers comes from individual checks of over $500. Pages 9-11. By contrast, smaller donors account for the majority of the candidates’ funds in the Statehouse races. Our analysis of campaign spending on Minnesota’s elections for Governor, Attorney General, and House of Representatives is based on reports from Minnesota’s Campaign Finance Board for the period January 1, 2018 through December 31, 2018. Appendix A provides additional information. 2 Money Bombs Hit Minnesota Elections Minnesota’s elections for Governor, Attorney General, and the State House were hit by “Money Bombs” in the final days of the campaign. Figure 1 shows that overall spending surpassed $42 million – a 25% hike during the last two weeks of campaigning.2 Overall spending to support DFL candidates for state government was greater than for GOP candidates – and the gap grew in the closing days of the fall campaign Figure 1 shows two striking patterns: (1) More than $13 million was spent in support of DFL candidates than their Republican counterparts; (2) spending increased by more than $3 million during the last two weeks of the campaign, which disproportionately benefited DFL candidates and coincided with their string of wins. The Governor’s race largest amount of late spending – an increase of $3.5 million or a 19% increase. Spending on DFL winning candidate Tim Walz continued to be greater than for Republican challenger Jeff Johnson by $2.6 million: spending on both rose by a fifth in the final two weeks and Johnson was unable to catch up. The most striking money bomb was dropped in the Attorney General race: spending rose by 51% from $2.8 million as of October 22nd to $4.3 by Election Day.3 DFL candidate Keith Ellison faced a close race but spending on his campaign jumped by 58% to $3.2 million while his GOP challenger (Doug Wardlow) only rose to $1.1 million and lagged by three fold. In the most dramatic surprise of the 2016 elections in Minnesota, the DFL retook the majority in the House of Representatives in St. Paul. By the end of October, the GOP enjoyed a $482,000 advantage but supporters of the DFL surged ahead in the final weeks by increasing their spending by a third and taking a lead of around $300,000, 2 We track the change in state spending between October 23, 2018 when the last reports during the fall campaigns were filed with Minnesota's Campaign Finance Board (MCFB) and Election Day as reflected in the final reports with the MCFB. 3 The year end report goes through December 31, and a small number of contributions may have occurred after Election Day. 3 Figure 1. Overall Spending in Support of General Election Candidates Since January 1, 2018 $27,846,019 $28,000,000 $26,000,000 $24,000,000 $22,000,000 $20,000,000 $18,000,000 $16,111,208 $16,000,000 $14,474,201 $14,000,000 $12,000,000 GOP $10,000,000 Amount Raised $8,259,837 $8,560,030 $8,000,000 DFL $6,000,000 $5,122,373 $4,000,000 $3,174,782 $2,000,000 $1,091,991 $0 Overall Spending Johnson/Walz Wardlow/Ellison Minnesota House $42,320,221 $21,233,581 $4,266,772 $16,819,867 *Independent expenditures include spending for the candidates and against their opponents Independent expenditures by parties, groups, corporations, unions, and associations flooded Minnesota, helping to create disparities in spending for DFL and GOP candidates. Independent expenditures (IEs) account for a majority of overall spending on state races. Independent expenditures are unlimited, and they are made without coordination with the candidates or their campaigns. By contrast, direct party, political action committee, individual, and public subsidy contributions to candidates’ campaigns are limited by law. Independent expenditure group support for Walz and Ellison was far greater than IE support for their rivals, while IE groups fueled spending for GOP candidates in statehouse contests. 4 Figure 2 shows that nearly two-thirds of the overall spending on DFL candidates (64%) came from IEs and 55% came from IEs for GOP candidates. Figure 2. Independent expenditures and individual campaign contributions are the biggest source of overall spending for state offices. Sources of Candidate Support - General Election Candidates $28,000,000 $26,000,000 $24,000,000 $22,000,000 $20,000,000 Independent Expenditures $18,000,000 64% $16,000,000 Party Contributions $14,000,000 $12,000,000 55% PAC Contributions $10,000,000 2% 4% Amount Raised $8,000,000 2% Contributions from Individuals $6,000,000 3% 25% $4,000,000 31% $2,000,000 2% 1% Other Contributions 6% 4% $0 GOP DFL Public Subsidy $14,474,201 $27,846,019 *Independent expenditures includes spending for the candidates and against their opponents Figure 3 shows that the big state organizations representing the DFL and Republican parties, as well as their traditional allies in business, labor, and social issue advocates, account for most of the IE expenditures. 5 Figure 3. Top groups making independent expenditures Groups making independent expenditures GOP Total Spent House Republican Campaign Committee $1,986,480 Freedom Club State PAC $1,797,810 Pro Jobs Majority $892,610 Coalition of Minnesota Businesses IEPC $827,625 Housing First Fund $701,500 DFL Alliance for a Better Minnesota Action Fund $5,843,828 MN DFL State Central Committee $3,608,393 MN Victory PAC $3,331,147 DFL House Caucus $1,507,712 Planned Parenthood of Minnesota Political Action Fund $803,864 *Does not include $90,253 spent by Alliance for Jobs Political Action Committee against Tim Walz prior to the primary Figure 4 shows that 74% of spending to support Walz comes from independent expenditure groups, greatly increasing his spending advantage over Johnson (only half of his support comes from IEs). Figure 4. Walz receives far more of his funding from independent expenditures Sources of Candidate Support - Governor $16,000,000 $14,000,000 $12,000,000 Independent Expenditures $10,000,000 74% Party Contributions $8,000,000 PAC Contributions $6,000,000 Amount Raised Contributions from Individuals $4,000,000 50% 2% 3% 20% Other Contributions $2,000,000 39% 1% 1% 7% 3% Public Subsidy $0 Jeff Johnson Tim Walz $5,122,373 $16,111,208 *Independent expenditures include spending for the candidates and against their opponents 6 Figure 5 shows that 64% of spending to support Ellison comes from independent expenditure groups, fueling his spending advantage over Wardlow (only 13% of his support comes from IEs). Figure 5. Ellison receives far more of his funding from independent expenditures Sources of Candidate Support - Attorney General $3,500,000 $3,000,000 $2,500,000 Independent Expenditures 64% $2,000,000 Party Contributions $1,500,000 PAC Contributions 2% Amount Raised $1,000,000 13% 2% 1% Contributions from Individuals $500,000 77% 31% Other Contributions 7% 1% 3% $0 Doug Wardlow Keith Ellison Public Subsidy $1,091,991 $3,174,782 *Independent expenditures include spending for the candidates and against their opponents Figure 6 shows that 64% of spending to support GOP statehouse candidates comes from independent expenditure groups, whereas 45% of DFL candidates’ support comes from IEs, which is a 12 percentage point rise after the surge of funding in the campaign’s last two weeks.