Loss of NC tax earmark hurts Democratic Party
RALEIGH (AP) — Millions of people will have a couple fewer decisions to make on their North Carolina tax returns before April 15, and the state Democratic Party is most acutely feeling the change.
The wide-ranging elections overhaul bill approved by Republican legislators last summer and signed into law by Gov. Pat McCrory eliminated the option taxpayers had to earmark $3 of their tax payment for the previous year to their favored political party.
The tax “checkoff” program, started in the mid-1970s during post-Watergate campaign finance reforms, was swept aside as enough Republicans decided government shouldn’t accumulate tax money for parties. Now the money will remain in state coffers.
For all of the essential services state government should perform, “I do not believe soliciting funds for political parties is one of them,” said Rep. Dennis Riddell, R-Alamance and a sponsor of a separate bill to do away with the political party checkoff now offered by fewer than 10 other states.
Parties “should stand on their own two feet,” Riddell added. “They are not charitable organizations.”
While the abolishment of the political party checkoff hits the state Democratic, Republican and Libertarian parties, Democrats argue Republicans passed the bill knowing it would hurt Democrats the most. The Democratic Party received $3.5 million of the combined $5.7 million disbursed from the checkoffs since 2009, according to the State Board of Elections.
The tax checkoff money was “an asset to our party operations for decades,” Casey Mann, the state Democratic Party’s new executive director, said in a release last week.
Also repealed in the elections law is a similar $3 tax “checkoff” whose proceeds helped pay for a now-defunct voluntary public financing program for appellate court judgeships. Now all appeals court candidates, who run in nonpartisan elections, are on their own to raise campaign money.
Checkoffs have been used to promote public financing of campaigns and increase public participation in elections. McCrory recommended both checkoff repeals in his 2013 budget proposal. His budget director is Art Pope, a conservative activist and longtime critic of such programs on philosophical grounds.
Mann said in an interview the parties’ checkoff allowed people who couldn’t give large amounts of money to political endeavors an easy method to give a little. The checkoff didn’t increase a person’s tax liability or reduce a refund. Riddell said there are other methods today to obtain small contributions, many of them online.
Losing the money couldn’t come at worse time for the Democrats already struggling to raise money as the minority party in state government for the first time in more than a century. Recent intraparty feuding and publicity over personnel decisions also haven’t helped. Democrats had strongly promoted the checkoff with members.
Individual income tax returns allowed filers to set aside the money for one of the state’s three “official” parties, or it could be labeled “unspecified.” That portion was distributed to the parties based on their percentages of voter registration in the state. The Democrats remain the largest single party.
The Democrats received more than $1.5 million in checkoff distributions from the state during 2012, compared to $934,000 for the state Republican Party and $98,000 for the state Libertarian Party, according to the elections board. The state held back some money for distribution in presidential election years.
State law required parties to form special committees that included regional party leaders to distribute some of the funds. In recent years at the Democratic Party, the special committee sought to disburse the money to party efforts in all 100 counties. In 2012, for example, the money was given to hire poll workers in Bertie County, office supplies in Montgomery County and radio ads in Beaufort County.
“The taxpayers in every county contributed, and my feeling was the money came from the counties, and the money should go back for the counties,” said former state party Chairman David Parker.
How checkoff money was distributed may have helped Parker remain chairman in mid-2012 amid calls for him to resign by the party’s top elected officials for how he handled personnel matters at party headquarters. Some of Parker’s supporters distributed fliers at a contentious meeting suggesting his departure would open the door for elected state officials to “seize control” of the checkoff money.
The money “was used as a political football,” said Perry Woods, a Raleigh political consultant and critic of Parker.
The state Republican Party funneled their check-off funds to handle general operating expenses, said party Executive Director Todd Poole. While supporting the repeal, Poole said the loss of the money has presented fiscal challenges.
“The parties have relied on that money too much and maybe they’ve gotten lazy with their fundraising efforts,” he said. “We’re going to have to ramp it up.”
It may have seemed contradictory for the Libertarian Party, whose tenets promote pushing government out of most of its current activities, to accept the money, party spokesman Brian Irving said. Most of their check-off funds in 2012 went to help gubernatorial candidate Barbara Howe.
While the check off idea was flawed, Irving said, taxpayers at least “were making a donation to a cause they believe in.”