MA political fundraising plummets

Super PAC money is filling the void as donations ebb compared to previous election years

The outside super PAC money now pouring into the Massachusetts governor’s race is only half of a rapidly changing equation behind how state elections are financed. The recent rise in outside money has been so pronounced that it has overshadowed a far more wide-reaching trend – a steep drop in fundraising by traditional political committees.

Charlie Baker currently leads all gubernatorial candidates in fundraising, but he’s well off the pace he set for himself four years ago. Baker’s fundraising has lagged behind its 2010 levels all year long, and the Republican has now banked $1 million less this year than he had at this point four years ago. Martha Coakley, the Democratic gubernatorial frontrunner, has significantly less cash than Baker does, even after accounting for the hundreds of thousands of dollars in public campaign finance funds she just received. Steve Grossman, Coakley’s closest rival for the Democratic gubernatorial nomination, is a former chairman of the national Democratic National Committee, but he’s being out-raised by a political novice, Don Berwick.

Middling fundraising totals in the race for governor reflect a broader drop in political fundraising activity across Massachusetts. There’s currently far less money in the overall state political system than there normally is during a statewide election cycle. Overall year-to-date fundraising in Massachusetts is 30 to 35 percent below levels seen in 2010 and 2006, the last two gubernatorial election years. It’s even below levels set in 2002, the earliest year for which electronic campaign finance records are available.

State fundraising totals are so low this year that, even if the $5 million that super PACs have spent on the governor’s contest so far this year were added to the money traditional state political committees have raised directly, the total would still be below direct fundraising levels set during each of the last two gubernatorial elections.

Some suggest the dearth of fundraising is due to campaign fatigue, a lack of interest in the candidates and the campaigns in general. But campaign insiders say the real problem is that the universe of donors has shrunk. New pay-to-play rules enacted by the Securities and Exchange Commission have prompted most people who work in financial services to stay away from campaigns. Since financial services executives have tended to be politically active, often serving as fundraising rainmakers for campaigns, their absence has been pronounced. One insider estimates 30 percent of the people who donated to campaigns in 2010 are out of the game this year.

A new law raising the maximum annual donor limit in Massachusetts from $500 to $1,000 should help address the problem, but the increase doesn’t go into effect until next year. Even so, it probably won’t be enough to keep pace with the escalating cost of campaigns, particularly the cost of television advertising. It’s no wonder, says one gubernatorial campaign insider who is actively involved in raising money, that as fundraising totals are going down super PAC spending is rising quickly. “Our campaign finance laws – for better or worse – have turned state races into super PAC must-see TV,” the insider says.

CommonWealth pulled year-to-date fundraising totals from the Massachusetts Office of Campaign and Political Finance’s database, and compared the 2014 fundraising totals to similar periods (from January 1 through August 15, the date of the most recent campaign finance reporting deadline) for every year going back to 2002. The data includes money raised by candidates, political action committees, state and local party committees, and ballot question committees. It’s a measure of the total volume of money sloshing around in the state political universe in any given year. We looked only at political contributions between $1 and $5,000 – a range that captures political donations to candidates and party committees, but filters out significant self-financing activities by candidates.

The data shows that there’s far less money coming into the Massachusetts political system than is normally the case during a statewide election year. Political fundraising activity in Massachusetts moves in waves. It ebbs in odd-numbered years, when no elections are held; rises when state legislators campaign in even-numbered years; and spikes every four years, with the contests for governor and other statewide offices.

This year, however, fundraising activity hasn’t spiked. It hasn’t budged from last year’s levels, when no campaigns were in full swing. Aggregate year-to-date fundraising is 35 percent lower than it was at this point four years ago. It’s 30 percent lower than it was during the 2006 gubernatorial election cycle, and lower even than levels set during the 2002 scramble for governor. Massachusetts political committees have banked a total of $16.8 million so far this year, compared to $26 million in 2010, $23.5 million in 2006, and $17.8 million in 2002.

Even with open races for governor, lieutenant governor, attorney general, and state treasurer – and highly competitive Democratic primaries for all four offices – the level of overall fundraising activity in Massachusetts looks much more like an odd-numbered, off-year than a statewide election cycle.

The absence of the normal upswing in aggregate fundraising has created some staggering fundraising lines among prominent political committees.

Baker’s gubernatorial campaign, for instance, has raised $1 million less to-date in 2014 than it did during Baker’s first gubernatorial run, in 2010. And Baker’s diminished $2 million fundraising haul is still good enough to make him the fundraising leader among all gubernatorial hopefuls.

Grossman, the current state treasurer and a former chairman of both the state and national Democratic committees, has raised half of what Baker has raised this year. Grossman’s $1 million fundraising haul isn’t far above the $840,000 he raised to-date while running for state treasurer in 2010. Grossman has been out-raised by both Berwick, a first-time candidate, and Coakley. But fundraising by Coakley and Berwick has been tepid enough that both candidates recently tapped into the state’s public campaign finance fund.

Even after accounting for the more than $300,000 in public financing Coakley received, the Democratic frontrunner’s war chest is still $600,000 lighter than Baker’s.

Meet the Author

Paul McMorrow

Associate Editor, CommonWealth

About Paul McMorrow

Paul McMorrow comes to CommonWealth from Banker & Tradesman, where he covered commercial real estate and development. He previously worked as a contributing editor to Boston magazine, where he covered local politics in print and online. He got his start at the Weekly Dig, where he worked as a staff writer, and later news and features editor. Paul writes a frequent column about real estate for the Boston Globe’s Op-Ed page, and is a regular contributor to BeerAdvocate magazine. His work has been recognized by the City and Regional Magazine Association, the New England Press Association, and the Association of Alternative Newsweeklies. He is a Boston University graduate and a lifelong New Englander.

About Paul McMorrow

Paul McMorrow comes to CommonWealth from Banker & Tradesman, where he covered commercial real estate and development. He previously worked as a contributing editor to Boston magazine, where he covered local politics in print and online. He got his start at the Weekly Dig, where he worked as a staff writer, and later news and features editor. Paul writes a frequent column about real estate for the Boston Globe’s Op-Ed page, and is a regular contributor to BeerAdvocate magazine. His work has been recognized by the City and Regional Magazine Association, the New England Press Association, and the Association of Alternative Newsweeklies. He is a Boston University graduate and a lifelong New Englander.

Fundraising by the Democratic State Committee has fallen precipitously. The fund normally helps finance expensive television advertising buys on behalf of the party’s gubernatorial nominee. Through August 15, the state committee’s 2014 fundraising total stood under $310,000 – a 79 percent drop from the more than $1.4 million the state committee raised in support of Gov. Deval Patrick’s reelection bid four years ago. This year’s total is also far below the $800,000 the Democratic Party raised during a hard-fought gubernatorial primary contest in 2006.

The Republican State Committee’s fundraising totals haven’t slumped as badly as the Democrats’ have, but through mid-August, the Republican committee was off its 2010 fundraising pace by 44 percent.