Reimagining Federal Election Funding
The smooth execution of elections is a cornerstone of our democracy, yet elections in the United States are chronically—and, in some cases, hazardously—underfunded. The majority of existing funding comes from state and local sources, with only intermittent, discretionary federal appropriations.
Inadequate funding leads to antiquated technology and equipment, understaffed election offices, and overworked officials. The 2020 election exposed this reality when election officials had to bootstrap a contentious election amid a pandemic. Private funders stepped in to fund aspects of the voting process that should be resourced by the government.
Recent federal appropriations for election security in the fiscal year 2018, FY2020, FY2022, and through the CARES Act in 2020 have incentivized states to make investments in their elections processes; however, relying on one-off discretionary “money drops” of varying amounts is an inefficient and inadequate way to provide funding when election officials need consistency and predictability. Foreign cybersecurity threats in the 2016 election and unsubstantiated claims of fraud in the 2020 election have resulted in renewed public attention to the intricacies of the U.S. election system. The American public demands election security and accessibility. This cannot happen without proper funding. Regular, continuous federal funding for elections would allow state and local governments to budget for the short, medium, and long term.
With so many competing priorities for the annual budgeting process, creating a reliable federal funding source for elections requires a separate, dedicated approach. Fortunately, the Presidential Election Campaign Fund (PECF) provides an existing mechanism to do just that.
Recommendation: Fund Elections through the PECF, Outside of the Annual Discretionary Appropriations Process
Right now, over $400 million sits unspent in the Presidential Election Campaign Fund (PECF). Each year, when tax filers complete their tax return filing, they can check a box to direct $3.00 of their tax liability to a fund designated for financing presidential campaigns; for joint filers, the amount doubles to $6.00. Yet no Democratic or Republican presidential nominee has accessed funds from the account since 2008.
The PECF’s original purpose was to support presidential election campaigns with public financing. However, it should be reimagined as a dedicated funding source for block grants to state and local election officials; this account, resourced by interested American taxpayers and wholly separate from the discretionary budget process, would revitalize election administration in this country and display a commitment from the federal government to cover its role in the state and local voting process. This approach honors the original spirit of the PECF by repurposing the funds to areas of high concern for the public involving our democracy.
What Is the Presidential Election Campaign Fund?
The existing PECF is the presidential public funding program. Presidential candidates are eligible to receive taxpayer-provided funds to pay for the qualified expenses of their political campaigns in primary and general elections. In return, candidates must limit their spending during the campaign in accordance with PECF guidelines (see Appendix A).
The PECF was created in 1974, following the Watergate scandal, to fund the party nominees’ primary and general election campaigns, thereby reducing the corrupting influences of money in politics and bolstering trust in the political system. (See Appendix A for the rules on primary matching funds and general election funds.) Given the concern about the influence of money in politics at the time, the fund collected nearly $24 million in its first year. This is equivalent to approximately $118 million in 2022 dollars.
The use of public financing has lost momentum as candidates opt for other strategies that allow them to raise and spend astronomical amounts of money on their campaigns. The PECF’s accompanying limitations on spending put candidates who access the funds at a severe disadvantage against candidates who do not accept the funds and who spend without limitation. In 2016, for example, the major party candidates spent a combined $2.4 billion. This figure far exceeds the $400 million sitting in the PECF.
There appears to be little political will or support to raise the spending limits imposed on candidates for accessing the PECF to a level that entices candidates to consider the option going forward. That is why we believe reallocating the use of funds in a way that tangibly improves the voting experience is a better plan moving forward.
There have been other attempts at redirecting this fund. Congress reallocated part of the PECF in 2014 when it voted to shift funding to pediatric research that would have been allocated to financing political nominating conventions. In 2019, one member of Congress proposed diverting the $3 tax filers’ checkoff to a trust fund dedicated to building a wall on the U.S. border with Mexico. While the bill to reallocate the PECF toward the construction of a border wall did not pass, Congress has demonstrated openness to reallocating the fund.
Today, taxpayers are given the option to allocate $3 of their taxes to the PECF (or $6 if they file jointly), but before 1993, taxpayers were given the option to donate $1 to the fund (or $2 for taxpayers filing jointly). The share of tax filers who check the box, however, has declined from 28% in 1976 to just over 3% in 2021. The decline suggests a growing disinterest in public campaign finance among the American public. Despite the decline, as of March 31, 2022, there is still over $412 million in the fund.
Source: PECF Tax Checkoff Chart
Reallocating the PECF to Elections
Reallocating the PECF to elections would provide consistent, additional federal resources to meet a clear and growing need. Election administrators have long called for increased resources for elections, and BPC has echoed those calls to Congress for additional federal funds. The time has come for a new mechanism for election funding. By reallocating the PECF to elections, the federal government gives agency to voters to fund elections. In turn, this incentivizes state and local governments to invest in their election infrastructure as well.
To understand the current state of election funding, we look to federal grant programs that provide one-off assistance to election offices across the United States.
A Brief History of Federal Election Funding in the U.S.
The Help America Vote Act (HAVA) of 2002 established the Election Assistance Commission (EAC) to assist states with federal elections and provide funds for states to replace outdated voting systems. HAVA created minimum election administration standards for states and local government responsible for administering federal elections. Prior to HAVA, there was no federal mechanism for providing state and local governments with funds for election administration.
As of September 2020, over $4 billion in federal funds has been awarded to 50 states, the District of Columbia, and five U.S. territories since the first year of HAVA grants in 2003. While that money has come in sporadically, it averages approximately $244 million per year each year from 2003 to 2020. For more details on the HAVA grants, see Appendix B.
Source: EAC 2020 Grant Expenditure Report
More recently, Congress appropriated $880 million for election security grants in FY2018, FY2020, and FY2022. This was the biggest influx in federal resources for voting since the years immediately following the passage of HAVA. These election security grants were in response to cybersecurity concerns identified during the 2016 election and were allocated to six categories: voting equipment, post-election auditing, voter registration systems, cybersecurity, communication, and other expenses. See Appendix B for a breakdown of the funding by category.
In 2020, in response to the COVID-19 pandemic, Congress passed the CARES Act, which allocated an additional $400 million to election administrators across the United States. This funding went to voting processes (such as the additional costs of printing mail ballots, installing drop boxes, and leasing larger polling places to accommodate social distancing), staffing, supplies, security and training, communications, subgrants, and other expenditures (such as storing and delivery costs) that arose due to administering voting during a pandemic.
In the time since HAVA was enacted, elections in the United States have been designated as critical infrastructure. A consistent federal investment in election infrastructure would mitigate local vulnerabilities spread among thousands of jurisdictions that could have national implications if exploited.
Keeping the PECF Focus on Elections
The PECF should be reallocated to state and local election offices because they are in dire need of consistent and regular funding. Giving voters the agency to redirect an existing but functionally defunct funding allocation for campaign finance to another similar, yet more viable, elections and democracy-related focus just makes sense.
Federal funding of elections has largely been reactive and intermittent. HAVA, for example, passed in response to the election system weaknesses exposed by the 2000 election. The 2018 and 2020 election security grants came in response to foreign attempts to interfere in the 2016 election. And despite the CARES Act funding, election administrators across the country did not have sufficient funds in 2020 to meet the demands of conducting a presidential election during a global pandemic.
To supplement the CARES Act funding, the Center for Tech and Civic Life issued approximately $356 million in private funding to local election jurisdictions in 2020. Those funds are likely not coming again; moreover, we believe that, to avoid the appearance of bias, funding elections is an inherently governmental responsibility.
The PECF’s original intention was to provide public support for candidates running for office. By reallocating the fund to election administration, Congress would demonstrate a large investment in free, fair, and secure elections. Election administration bolsters the legitimacy of the candidates elected to public office by ensuring they are elected democratically.
What Reallocating the PECF Could Achieve
Consistent federal funds would contribute to maintaining and updating voter registration systems, providing accessible and secure options for voters to cast a ballot, ensuring fair and efficient ballot tabulation processes, and improving the physical security and cybersecurity of election offices. Recommendations for what funds would be used for in each of these four areas are documented in Prioritizing Achievable Federal Election Reform, a cross-partisan effort of five nonprofit think tanks. The funds would also support staffing and resource shortages. Unlike the HAVA grants, the reallocation of the PECF would guarantee annual, regular funding to support high-caliber election best practices.
A reallocation of the PECF to election administration block grants could very well inspire more participation than the 3.34% of tax filers who contributed to it in 2021. By our estimation, if 28% of tax filers checked the PECF box today, it would generate approximately $194 million per year for the PECF. (See Appendix C for the analysis.) If distributed biennially, this number would approach $400 million in the year after a federal election. Increasing the checkoff to $5/$10 would get closer to the $400 million per year, which BPC believes is needed over the long term. Americans know that democracy is at stake, and maybe more willing to contribute to funding election administration than they are to public campaign finance.
The PECF is the only federal tax checkoff that allows the American public direct control over how the federal government spends taxpayer dollars. The original intent of the fund—to publicly fund presidential campaigns—has been rendered moot by the stark realities of financing presidential campaigns. By redistributing the PECF to support election administrators, Congress would empower the American public to directly invest in free and fair elections, improving democracy in a democratic manner.
Appendix A: PECF Funding
The PECF provides campaign finance to presidential candidates for primaries and for the general election. To be eligible for primary matching funds, candidates must meet a fundraising minimum of $5,000 in each of at least 20 states (i.e., over $100,000 total). Only a maximum of $250 of each individual contribution is counted in determining whether a candidate has met the $5,000 threshold in each state, so a minimum of 20 contributors is required in each of at least 20 different states.
Eligible presidential candidates must agree to limit their campaign spending for all primary elections to $10 million plus a cost-of-living adjustment. They must also agree to limit campaign spending in each state to $200,000 plus a cost-of-living adjustment or to a specified amount based on the number of voting age individuals in the state. Finally, eligible presidential candidates must limit spending from personal funds to $50,000 if they use primary matching funds.
General election funds are available to major party presidential nominees in the form of $20 million grants plus a cost-of-living adjustment. To be eligible, nominees of a major party must agree to limit their spending to the amount of the grant and may not accept private contributions for their campaign. Candidates may spend an additional $50,000 from their own personal funds when they take from the general election fund, which does not count against their expenditure limit.
In 1976, each major party nominee received $21.8 million in general election funds. By 2008—the last year a major party candidate chose to accept a general election grant—that amount had grown to $84.1 million. If major party candidates chose to accept general election grants in 2020, they would have each received $103.7 million.
Appendix B: EAC Funding
HAVA Section 101 funds were distributed in 2003 and have been used for a wide range of activities including, but not limited to, voter education, training poll workers, and securing and storing voting equipment. Section 251 funds, also known as requirements payment grants, have been used for improving voting systems including voter registration, system compliance, and implementing provisional ballots and ballot identification for first-time voters.
The level of funding provided by the HAVA sections 101 and 251 grants has allowed states to begin making needed investments, but the vulnerabilities and needs are far greater than existing funding allows, and will require regular expenditures over several funding cycles.
The election security grants distributed in FY2018 and FY2020 are broken down into six categories. And the CARES Act funding of 2020 is distributed into seven categories. See below.
Source: EAC 2020 Grant Expenditure Report
Appendix C: Projected PECF Contribution
To arrive at the projection that if 28% of tax filers were to contribute to the PECF, it would generate $194 million annually, we first examined the total number of 1040 tax filers, the PECF IRS tax checkoff percentage, and the total checkoff year to date.
Tax filers who file jointly have the option to contribute $6 to the fund ($3 for themselves and $3 for their spouse), while single tax filers have the option to contribute $3 to the fund. To generate the average contribution to the PECF per tax filer, we first multiplied the IRS checkoff percentage by the total 1040 tax filers per year. That calculation gave us the estimated number of tax filers who contributed to the fund. We then divided the total checkoff YTD by the estimated number of filers who contributed to determining the average contribution per tax filer for the years 2017 through 2021. Averaging those five numbers, we arrived at an average of $4.40 per tax filer contributed to the PECF per year.
Approximating the total number of 1040 tax filers using 2021 totals and multiplying that number by a projected 28% of tax filers gives us a total of approximately 44 million tax filers who would need to check the box. If a tax filer averages a $4.40 contribution, we multiply 44 million filers by $4.40 to get $194 million added to the PECF per year.
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