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How Do Democracy Vouchers Work?

4 min read
Seattle
Good Party Politics Team · Dec 15, 2023

“If your party serves the powerful and well-funded interests, and there's no limit to what you can spend, you have a permanent, structural advantage … In many ways, we're back in the Gilded Age. We have robber barons buying the government.” ~ David Axelrod 

“In all, just 158 American families had donated half of all the money to candidates on the ballot [in the 2016 election].” ~ Evan Osnos, Wildland: The Making of America’s Fury


As government becomes less functional, and the resulting voter apathy results in fewer voices dictating who governs our country, the need for solutions becomes more apparent. One of the biggest issues to overcome is the problem of money in politics

Even before the 2010 Citizens United Supreme Court decision gave corporations an equal voice with citizens and opened the floodgates to dark money, special interests have had an outsized say in who runs our country. Through the threat of granting or withholding financial support, they can dictate policy and ensure that politicians work for them instead of for the people.  

In recent years, the concept of democracy vouchers has emerged as an innovative approach to campaign financing that aims to increase public participation and reduce the influence of wealthy donors in politics. 

Join us as we explore the concept of democracy vouchers and how they work, with a particular focus on Seattle's pioneering use of this system.

What Are Democracy Vouchers?

Democracy vouchers are a form of public campaign financing where eligible voters are given a set amount of vouchers or credits by the government. These vouchers can then be donated to political candidates, allowing voters to financially support campaigns they believe in without spending their own money. 

The primary objective is to democratize political donations and ensure that all citizens - regardless of their economic status - can have a financial impact on political campaigns.

Where Are Democracy Vouchers Used?

The most notable use of democracy vouchers is in Seattle, Washington. The choice was put to the voters as a ballot initiative in 2015, along with a $3 million annual property tax to fund the program through 2025, and it was implemented city-wide in 2017. The tax amounts to an average of $8 per resident per year. During each odd-year of the election cycle each eligible Seattle resident receives four $25 vouchers to allocate to city council and mayoral candidates of their choice. 

The Seattle Democracy Voucher Program is the first of its kind in the United States, but there have been several attempts to implement similar campaign finance initiatives. According to comparative analysis with cities of a similar size as well as past elections in Seattle, this program has had a big impact on political campaign contributions. According to data published by The Journal of Public Economics, donations increased by 53%, and the number of small, individual donors increased by 350%. 

However, the study also found that only 2% - 5% of the vouchers are being used, so there needs to be some outreach done to find out why and how to encourage more voters to participate. 

For example, Andrew Yang floated the idea of “Democracy Dollars” during his 2020 presidential campaign. Under his plan, every eligible voter in the U.S. would receive a $100 voucher to spend on the candidate of their choice. By his estimation, that would equate to small donor spending directly from the people totaling approximately $23 billion per election cycle. 

In 2016, voters in South Dakota voted in support of a larger anti-corruption bill that included an initiative to create democracy vouchers. The bill passed with 51% of the vote, but it was repealed by the Republican-controlled state legislature in 2017. They even added an emergency clause that prevents the bill from being reinstated. 

In Los Angeles, California, the LA City Council recently introduced a motion to study the feasibility of using democracy vouchers in that city

Such groundbreaking initiatives aim to amplify the voices of ordinary citizens in political discourse and reduce the disproportionate influence of wealthy donors and special interest groups.

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Practical Steps for Voters Using Democracy Vouchers

Those who are opposed to such programs label them “Monopoly money,” a term which is used in an attempt to denigrate the concept and make them less appealing to voters. However, these vouchers are backed by real money and can be used by taxpayers to make a real difference in how campaigns are financed. 

Here’s how they work:

  1. Eligibility and receipt of vouchers: Eligible voters in jurisdictions that adopt this system receive vouchers from the government. For example, every eligible voter in Seattle receives four $25 vouchers in the mail.

  2. Voters choose a candidate: Voters research and select candidates who align with their values and policies. However, only candidates who choose to participate in the voucher program and meet specific criteria are eligible to receive these funds.

  3. Voters submit their vouchers: After selecting a candidate, voters submit their vouchers to the candidate's campaign or a designated administrative body. Depending on the system, this can be done via mail, in person, or electronically.

  4. Candidates redeem the vouchers: The candidates then redeem these vouchers in exchange for campaign funding. These funds are subject to certain rules and spending limits.

  5. Campaign monitoring and compliance: There are mechanisms in place to ensure the proper use of vouchers, with strict compliance and auditing requirements for participating candidates.

Pros and Cons of Using Democracy Vouchers

As with any new program or initiative, there are going to be wrinkles in design and implementation. There will also be those who are resistant to change, either out of comfort with the status quo or because they benefit directly from business as usual. 

It may take a few election cycles and wider implementation before we can determine if this system is viable for broader application. That being said, here are some of the potential advantages and drawbacks of using democracy vouchers to finance political campaigns:

Pros of Democracy Vouchers

  • Enhanced Political Engagement: Democracy vouchers can increase civic participation by allowing more people to contribute to political campaigns, even those who can't afford monetary donations.

  • Diversification of Political Donors: This system helps to diversify the donor base, which helps to ensure that a wider range of socio-economic groups have a say in the political process.

  • Reducing the Influence of Big Money: By providing public funding for campaigns, democracy vouchers can reduce the influence of wealthy donors and special interests in politics.

  • Encouraging Grassroots Engagement: Candidates may be more inclined to engage with a broader base of the electorate to receive vouchers, which helps support grassroots political movements.

  • Leveling the Playing Field: Democracy vouchers can help lesser-known or less wealthy candidates compete more effectively against established or well-funded opponents.

  • Improved Transparency and Accountability: The system can be designed to ensure transparency in political funding, with clear records of where candidates receive their funds.

Cons of Democracy Vouchers

  • Administrative Complexity and Costs: Implementing and managing a democracy voucher system can be complex and costly, which could also mean they require significant administrative resources.

  • Potential for Misuse and Fraud: There is a risk of fraud or misuse of vouchers, increasing the need for robust systems to prevent and monitor such activities.

  • Legal and Constitutional Challenges: The implementation of democracy vouchers can face legal challenges, including questions about their constitutionality and the regulation of political speech.

  • Limited Impact on Overall Campaign Spending: While they diversify donor bases, vouchers may not significantly reduce the total amount of money in politics, especially with the presence of Super PACs and other funding mechanisms.

  • Uncertain Impact on Political Polarization: Because this is a relatively new program, it's unclear how democracy vouchers would affect political polarization. There’s a chance that they could either mitigate polarization by empowering moderate voices or exacerbate it by amplifying extreme positions. Only time and wider implementation will tell. 

  • Dependence on Public Funding: Relying on taxpayer money for political campaigns can be controversial, with debates over the appropriate use of public funds in this context.

As you can see, democracy vouchers offer a novel approach to campaign financing, with the potential to democratize political donations and increase voter engagement. However, they also present challenges in terms of implementation, potential misuse, and questions about their overall impact on the political landscape.

Seattle’s Experience with Democracy Vouchers

The program is funded through property taxes in Seattle, but the outlay of tax dollars  isn’t large enough to fully fund all eligible voters in the city at this time. That’s due to the expectation that not all of those who could use the program will take part. Participating candidates have an expenditure limit, after which they can no longer redeem vouchers. 

In order to participate, candidates must get at least 150 signatures and 150 donations of $10 or more in order to qualify for the voucher program. They’re then limited to campaign expenditures of between $150,000 and $800,000, depending on the office they seek. 

Seattle’s implementation of democracy vouchers has been a subject of keen interest and analysis. Here are some reflections on how the system is working out:

1. Increased Political Participation

Democracy vouchers have encouraged broader participation from a diverse range of voters, especially among populations that traditionally have less involvement in political funding.

2. Diversification of Donors

Studies have shown that the program has diversified the donor base, enabling more low-income and minority voters to contribute to campaigns.

3. Impact on Campaign Funding

The vouchers have altered the campaign funding landscape in Seattle, reducing candidates' reliance on large donations and leveling the playing field for those with less access to traditional fundraising networks. 

According to publicly available election data, 54% of pre-voucher campaign funding in Seattle races came from donations over $250. Those figures cover campaign contributions between 2007 and when the voucher program was implemented in 2017. Since the voucher system, only 16% of campaign funds were from such large individual donations. 

4. Challenges and Criticisms

Despite its successes, the program faces challenges, including administrative complexities and legal challenges questioning its constitutionality. Critics argue that it could lead to the misuse of public funds and require stringent regulations to prevent fraud.

5. Future Implications

The experiment in Seattle serves as a model for other cities considering similar programs. Its long-term impact on the political process and campaign financing norms remains a subject of ongoing observation and analysis.

Final Thoughts

Democracy vouchers represent a significant shift in campaign financing, with the goal of democratizing political donations and amplifying the voice of the average voter. While Seattle's experience has shown promising results in enhancing political participation and diversifying the donor base, it also brings to light the complexities and challenges of implementing such a system. 

As democracy vouchers continue to be a topic of debate and interest, their potential to reshape political campaign financing on a broader scale remains an intriguing prospect for the future of democratic participation.

Join the Movement for Electoral Reform

Campaign finance is just one of the many areas of reforms that will help transform our current political system into a truly representative democracy that works for all Americans. If you’re tired of business as usual, both on Main Street and in Washington, join Good Party today. 

We’re not a political party. We’re a growing movement of independent voters, volunteers, and political candidates. 


Photo by Luca Micheli on Unsplash

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Electoral Reform
Civic Engagement
Campaign Finance
Independent Movement
Voter Education
Seattle
By Good Party Politics Team
The GoodParty.org politics team is focused on transforming the political landscape by promoting transparency, accountability, and positive change. They aim to engage citizens in the political process, encourage informed decision-making, and support candidates who prioritize the common good. Their mission revolves around creating a more fair and just political system, fostering collaboration, and breaking down traditional barriers of partisanship.