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Minnesota’s political contribution refund returns after four-year blackout

Paul Demko//July 2, 2013

Minnesota’s political contribution refund returns after four-year blackout

Paul Demko//July 2, 2013

DFL Party Chair Ken Martin is pledging that Democrats will make better use of the revived PCR program than in the past. (Staff file photo: Peter Bartz-Gallagher)

Historically, PCR has been a major boon to state’s Republicans — who generally oppose it

Republicans have traditionally opposed Minnesota’s political contribution refund program, which was reinstated on Monday when the state’s new biennial budget took effect. In fact, it was GOP Gov. Tim Pawlenty who successfully proposed scrapping the program four years ago.

But despite their dislike for state-subsidized political contributions, Republican candidates and party units disproportionately benefited from the program during the two decades that it was in place.

In 2009, DFL candidates and causes received $656,000 in small contributions from just over 11,000 donors who received refunds from the state. By comparison, Republican donations totaled nearly $2 million, with more than 27,000 contributors successfully seeking refunds.

And 2009 was by no means an anomaly. In the last five years that the program was funded, Republican donors received $11.7 million in refunded contributions, while their DFL counterparts received just $4.5 million. Put another way, contributions to DFL candidates and causes eligible for a refund amounted to less than 40 percent of the total taken in by their GOP counterparts.

There’s no ready explanation for why the numbers are so lopsided in favor of Republicans. “I can’t really shed any light on why it is,” said Gary Goldsmith, executive director of the Minnesota Campaign Finance and Public Disclosure Board, which tracks the numbers. “It’s obvious from the numbers that Republicans are more effective in using the program.”

Monday’s restart of the Political Contribution Refund (PCR) program came after a four-year hiatus. The DFL-controlled Legislature allocated $12 million to pay for it in the biennium that began July 1. Individuals are eligible for a $50 refund, while political contributions up to $100 are covered for couples.

‘Free’ political contributions

State DFL party chair Ken Martin acknowledged that Republicans have been more adept at taking advantage of the program in the past. “There’s no doubt that the Republican Party has utilized this, through their local party units, a lot more effectively than the DFL in the past,” Martin said. “I think part of that is just the fact that Republicans clearly did a better job training their candidates and their local party units to use that.”

But Martin insisted that that won’t be case moving forward. Already on Monday, the state DFL was highlighting the return of the program on its website and Facebook page. It also sent out an email solicitation to potential donors: “Free – that’s the cost of a gift of up to $50 to help Gov. Dayton and our DFL leaders build on all the progress we’ve made this year,” it read. “Don’t wait – make your refundable gift right now!”

“There are more Democrats in this state and there are more Democratic contributors in this state,” Martin said. “I’m confident that in the coming weeks and months, not only will we be able to train our local units and our candidates – but that we’ll be able to start catching up to the Republicans in the use of this program.”

Republicans generally remain opposed to the political refund program. But that doesn’t mean they intend to be any less aggressive in taking advantage of it. “Republicans have consistently opposed taxing people to pay for political campaigns,” said Republican Party chair Keith Downey. “I’m not a fan of the PCR program and don’t think that’s a priority right now. At the same time, if it’s there, of course we’ll use it. We don’t want to put our donors at a disadvantage.”

Program’s elimination hurt GOP

The state Republican Party has been mired in debt in recent years. As of the end of February, it still faced $1.7 million in unpaid bills. When former GOP chair Tony Sutton resigned at the end of 2011, he blamed the elimination of the PCR program as one of the chief reasons for the party’s financial struggles.

“Losing the refund program has had a devastating effect on our small dollar fundraising programs as compared to the past,” Sutton wrote in his resignation letter to GOP activists, noting that the party’s average donation had dropped from $60 to $28. “Party finance staff estimate the loss of the refund program cost us $2 million in lost revenue in 2010 and $1 million in 2011.”

The Republican Party of Minnesota didn’t have any immediate plans to take advantage of the contribution refund program to bolster its finances, according to Downey. But there will be a concerted effort to make sure that potential contributors are aware of its existence.

“I think everyone is pretty aware that it is coming back,” Downey said. “It’s just something that we as a courtesy educate the donors on, that they do have the opportunity to get their contribution refunded. We would be doing a disservice to our supporters if we didn’t educate them on it.”

Sen. Michelle Benson, R-Ham Lake, sent out a tweet on Monday with a link to her website explaining the reintroduction of the contribution refund. She also expects to send out a direct mail solicitation highlighting the change in law.

“It’s not something that I would have supported in the Legislature,” Benson said. “But if the Democrats take advantage of it, I’m going to take advantage of it too.”

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