Disclosure or not
Does a nonprofit involved in a Santa Fe political campaign have to say where it gets its money? It depends, as we learned in this campaign.
The libertarian, Albuquerque-based Rio Grande Foundation dipped its toe into the soda tax fight with an “education initiative” consisting of a news release, a sparsely viewed video on the web criticizing the soda tax and Mayor Javier Gonzales, and about $200 in Facebook ads.
The city’s Ethics and Campaign Review Board decided that the foundation had exceeded a $250 spending threshold and that it must register as a political committee and file campaign finance reports. (That hasn’t happened yet.)
Meanwhile, Organizers in the Land of Enchantment (OLÃˆ), also an Albuquerque nonprofit and one that has long been active in progressive causes, was involved in a major way in the campaign, but wasn’t required to make any financial disclosures. The difference is that OLÃˆ participated as a donor, instead of working on its own for the tax-for-pre-K plan.
OLÃˆ supported Pre-K for Santa Fe, the PAC pushing the soda tax, by helping canvass neighborhoods, reported on Pre-K’s disclosure forms as $200,000 worth of in-kind services, as well as $100,000 in cash. OLÃˆ didn’t have to say where the cash for the donation or the money to pay for canvassing came from.
Presumably, if the Rio Grande Foundation had just donated its time and effort, and even money, to Better Way for Santa Fe & Pre-K, the major PAC against the tax, or Smart Progress New Mexico, which mounted a tiny anti-tax effort, RGF wouldn’t have run afoul of the city’s campaign laws (which the foundation maintains are unconstitutional). There would have been no question about the foundation having to say anything about its funding sources.
This distinction could play out in interesting ways in the future.
A nonprofit, be it a union or some other organization with a political bent, apparently can choose one path or the other to become a player in Santa Fe politics, depending on what works best for a particular contest.
In 2014, Gonzales accepted $60,000 in public financing from the city for his mayoral campaign, which meant he couldn’t take in any donations from private sources, including nonprofits. But public employee unions supporting his candidacy weighed in by registering as independent political committees and spending what seemed at the time to be a lot of money (before the monumentally expensive soda tax campaign) to help him get elected, as reported in the disclosure forms they were required to file.
The rules as they stand do open a back door for so-called “dark money” in issues campaigns like the soda tax. Pass a donation to the cause through the right nonprofit – acting as a donor itself – and the voters will never know where the money comes from before they go to the polls.
Mayor Gonzales, the face of the soda-tax-for-pre-K effort, twice committed the same faux pas, at least in purely political terms.
About two months after he proposed the soda tax to finance an expansion of pre-kindergarten education in Santa Fe, in his annual State of the City speech in January, Gonzales touted a $4.5 million surplus – revenue over expenses – expected at the end of the current fiscal year on June 30.
Then, as budget talks for 2017-18 started in March, he issued a celebratory tweet about an estimated $15 million surplus for the coming fiscal year. City Hall’s fiscal team later pared that down to $8.6 million.
In both cases, it was obvious immediately that the word “surplus” coming out of the mayor’s mouth was like candy (real, sugar-sweetened candy) to opponents of the tax, as in “You have a surplus and you want to tax my root beer?” It’s one thing to have some extra bucks lying around, but to brag about it just after proposing a tax increase seems tone deaf.
The sugary drinks tax opponents inevitably made the “multimillion dollar surplus” a key point in the campaign, even using one of the mayor’s tweets against him and sending out mailers with tall bundles of $100 bills as a visual representation of the city’s financial status.
City councilors supporting the tax were left to explain there was really only a $1.2 million surplus expected for the 2017-18 city general fund and that the other extra dollars were in coffers dedicated for specific items, like utility operations or capital expenses. And that surpluses can’t be used as a continuing funding source because they can disappear. But that’s the kind of argument that can’t combat the power of a simple catch phrase like “multimillion dollar surplus.”
Zero for two
Two mayors, with two very different proposals, have failed when it comes to getting voters in Santa Fe to approve taxes that target narrow categories, despite Santa Fe’s liberal tradition and the fact both taxes would have raised money for progressive programs.
Under Mayor David Coss, in 2009, voters rejected a high-end real estate “transfer tax” – a 1 percent tax on the portion of any Santa Fe home sale over $750,000. That vote wasn’t very close, with 54 percent going against the tax, which was designed to raise money for affordable housing programs.
More than $140,000 was spent in anti-tax advertising by a political group organized by Realtors. Only about $18,160 was spent by proponents of the tax proposal. “When you get outspent 10 to 1, it’s hard to overcome that,” said Coss at the time, fudging the math a little. “It is what it is. These things are hard to do, especially in a special election.”
This week, 58 percent voted against the sugary drinks tax in a special election. Both sides had plenty of money, thanks mainly to the American Beverage Association (anti-tax) and billionaire Michael Bloomberg (pro-tax). The nearly $3.3 million used as of last week was evenly split between the two sides.
The sheer size of Tuesday’s election – in terms of dollars spent, the overwhelming advertising and canvassing barrage, and the record turnout (sadly, about 38 percent of registered voters constitutes a record for a Santa Fe municipal election) – and the way it focused the community on local government raises some interesting questions.
Does the rejection of a sugary drinks tax to finance early childhood education programs represent some kind of breaking point for Santa Fe progressive/liberal/Democratic politics, which has been consistent across income, neighborhood and ethnic lines? The city’s more Hispanic and less affluent areas went hard against the soda tax and decided the election. Was it only the presence of so much campaign money and pressure that brought fissures to the surface?
Will Santa Fe voters, who routinely and with virtually no debate, regularly approve bond issues for the city, county and school district – using broad-base funding sources like property tax increases – be rethinking that kind of march-step support for tax hikes in the future?
And will voters who came out for the soda tax go back to complacently avoiding the polls once more when it comes to electing a mayor and four councilors next year, presumably without being pushed to vote by “Big Soda?”
We’ll have to see.