Taxpayer-funded lobbying

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Taxpayer-funded lobbying is defined as the practice of using funds that come directly or indirectly from taxpayers for political lobbying purposes. Taxpayer-funded lobbying is one government lobbying another. In the most common case, a city, county or school district uses taxpayer funds to pay dues to belong to a group such as the League of California Cities, and that association then donates money directly to political causes; most commonly, to a campaign committee for a ballot measure. The lobbying can be explicit, such as membership in government sector lobbying associations, or advocacy before a legislative body. The practice can be more subtle, such as school districts hosting legislators for a breakfast to create favorable relationships with legislators.

Taxpayer-funded lobbying has been described as a "circular and self-promoting cycle between government officials and so-called independent charities and non-profits that act to promote government policies while receiving federal aid."[1] Americans for Prosperity has drawn attention to this problem, especially Peggy Venable, head of the Americans for Prosperity chapter in Texas. Venable successfully sued the county she lives in, Williamson County, so that it could no longer pay dues to belong to the Texas Association of Counties, which lobbies extensively on state and local issues in Texas, often for programs that increase the burden on taxpayers.


The number of companies hired to pursue earmarks has doubled since 2000, many of them retained by universities or cities to pursue federal dollars. Some lobbyists now approach local officials offering to get them an earmark provided the lobbyist gets a hefty fee.[2] Americans for Prosperity estimates that governments spend nearly $1 trillion each year nationwide lobbying each other.[3]

Basis of objections to taxpayer-funded lobbying

Thomas Jefferson said, "To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical." This line is often quoted to express the most common objection to the practice of taxpayer-funded lobbying.

A secondary objection is that most taxpayers are unaware that their tax money, through dues, is used to fund lobbying advocacy programs with which they may disagree. This objection calls, at a minumum, for taxpayer-funded asssociations to, minimally, disclose the amount of money they receive in taxpayer-funded dues.

Taxpayer-funded dues and ballot measures

A 2006 example that excited controversy in California was when the League of California Cities, which receives often very significant income from cities (and thus, from taxpayers) in the form of dues, gave $4.8 million to the campaign to defeat California Proposition 90 (2006), an eminent domain reform initiative. The $4.8 million given by the League of California Cities represented 32.9% of the total money spent to defeat Proposition 90.[4] The League of California Cities has subsequently said that the money it gave to defeat Proposition 90, and the money it gives to other ballot measure campaigns, is "non-public money." However, it has refused to disclose the source of this money. In 2007 and 2008, the League has given another $2,470,000 to defeat California Proposition 98 (2008) and support the counter-measure, California Proposition 99 (2008).[5]

Bans on taxpayer-funded lobbying

Federal lobbying

State governments, local governments, public universities, transportation authorities, and public water utilities spent $138.1 million in 2007.[6]

When local and state-based governments send lobbyists to Washington, D.C., they are typically lobbying for earmarks. Examples include Huntsville, Alabama, with a population of 170,000, which paid lobbyists $100,000 for their services. In FY 2008, Huntsville received $4,742,824 in earmarks. Another example is the Utah Transit Authority in Utah, the 41st most densely populated state. The office provides public transportation in the state and spent $1.6 million on federal lobbyists in 2003.[7]

Other facts:

  • From 1998 to 2007, federal lobbying expenditures by local governments saw an increase of 240.9% to $138.1 million in 2007.[6]
  • Over the entire 1998 through first-half 2008 period, government sector lobbying totaled a staggering $1.09 billion.[6]
  • Local governments spent another $77.8 million on lobbying in the first half of 2008.[6]
  • Educational institutions as a whole spent at least $99 million to influence the federal government in 2009.[8]

State and local lobbying

Cities and states

Cities and states spent $84.1 million on federal lobbying in 2008.[9] This is a significant increase compared to $76 million in 2007 and $72 million in 2006.[10]

Public schools

Lobbying by public school entities reached $102 million in 2008, up $10 million from 2007.[10]

Schools spend money on lobbying on a few things. First, schools contract out lobbying duties to outside firms. The contract itself commits the district to paying a set amount for the services of the firm. Once a lobbyist is before the legislature or other government body, travel and other expenses will be reported on lobbying activity reports, and either the school district or the lobbying firm itself covers these expenses.

In Florida, school districts spent more than $1,257,585.12 lobbying in 2009. In July 2009, Sunshine Review submitted Freedom of Information Act requests to the 27 Florida school districts with lobbyists registered for 2009 with the Florida legislature.[11] The results of the information requests are included in Florida school districts lobbying totals. At least 52 school districts in Florida are members of the Florida School Boards Association, the main education government sector lobbying organization.[12]

Taxpayer-funded lobbying associations have lobbying priorities which center around issues that are close to the group. For schools, this can include school choice bills, property tax and mill issues, and policies relating to school grades, such as FCAT scores. Other school issues include class size and school calendar length.

Counties

In March 2010, Sunshine Review submitted Freedom of Information Act requests to Illinois counties. The process revealed over $6.2 million dollars in lobbying between 2005-2010, including lobbying the federal government and state government. The analysis that uncovered the $6.2 million only included the 10 most populous counties in the state. Specific legislation was not uncovered. However, Cook County's federal lobbying reports revealed that the type of lobbying the county does concerns getting money to the county, not promoting or opposing other sorts of legislation.

The counties overwhelmingly belonged to government sector lobbying associations. In Illinois, these included the United Counties Council, Illinois Association of County Board Members, and nationally, the National Association of Counties.

Taxpayer-funded lobbying associations

Main article: Taxpayer-funded lobbying associations

Taxpayer-funded lobbying associations (TFLAs) are groups that use funds that come directly or indirectly from taxpayers for political lobbying purposes. Local entities—cities, counties, school district—use taxpayer funds to pay dues to belong to a group such as the New Jersey State League of Municipalities. That association then pays money directly to lobbyists to lobby for or against particular pieces of legislation.

A piece of legislation came to the Alaskan legislature floor for the 2008 ballot that would eliminate government sector lobbying donations to election campaigns, but it failed. Supporters of the bill resurrected it to have it apply to the 2010 ballot, but it was defeated.[13]

Stimulus package

See also: American Recovery and Reinvestment Plan

Money received by private entities through the stimulus package of 2009 has been spent to lobby.[14][15] The eight large banks that first received bailout funds in October 2008 spent more than $12.4 million on lobbying in the first half of 2009,[16] and more than $20 million if including car companies.[17] Bank of America, which received $45 billion from the package and spent $800,000 in the April-June quarter on lobbying. This was a 21% increase from the $660,000 it spent in the first quarter.[18] Other examples can be seen below:[18]

Company Quarter 2 (Q2)
lobbying expenditures
% increase from Q1 Stimulus $ received
Bank of America $800,000 21% $45 billion
Citigroup $1,700,000 30% $45 billion
JPMorgan Chase $1,800,000 38% $25 billion (repayed)
Goldman Sachs Group $630,000 -6% -
Morgan Stanley $830,000 54% -
General Motors $2,800,000 approximately 0% -

Arguments

Support

One view of government sector lobbying is that it is unavoidable: the system is created so that public entities need to lobby in order to receive requisite money. For example, director of a county agency in Michigan John O'Brien said the county deserves its share of federal funds for water and sewer projects. "I didn’t create the system in Washington, I just have to live by those rules. We’re competing with every other group for this funding."[19] Another official stated that lobbyists have "been instrumental in bringing in money. [Spending on lobbyists] is what happens when you try to get your money back from Washington."[19]

In one Michigan county, the rate of return to public agencies for federal grants, excluding pell grants and other grants routinely awarded to colleges and universities, is $164 for each dollar spent on lobbyists.[19] Likewise, Mass Transportation Authority in Michigan points to nearly $30 million in capital grants since 2006 as evidence of the effectiveness of its lobbying.[19] Therefore, this view sees lobbying as successful in routing resources to the agencies that spend on lobbying.

Opposition

It is unnecessary

Taxpayer-funded lobbying is seen as unnecessary, as local governments already have effective lobbyists in senators and representatives.[20][21] One example of this view is Bishop Airport, a large taxpayer-supported group, which has not paid anything for lobbyists since 2006 but is in the midst of a $30 million project paid largely through state and federal grants.[19] The Airport Director stated "We’ve just never really needed [lobbyists], we’ve been successful enough using our senators and congressman." There is also the question of the effectiveness of actual lobbyists. U.S. Representative Dale E. Kildee stated that he has seen lobbyists make the case to taxpayer-supported agencies that they are responsible for having secured funding for a special appropriation, when in fact they played little or no role.[19]

It is undemocratic

To use public funds for activities that may in fact run opposite to public interests is undemocratic, as is the unequal access to the political system that comes with government sector lobbying. Peggy Venable, also of Americans for Prosperity, argues that government should not be in the business of providing funding to give voice to points of view that may not represent the views of the majority of the taxpayers. This removes the neutrality from the state. It also allows and breeds abuse, and protects public officials by "allowing them to hide behind the lobbying activities of organizations and other lobby-hired guns."[22] There is no mechanism for citizens to avoid paying taxes that finance services with which they disagree.[1]

Taxpayer-funded lobbying groups are formed to maintain the interests of their members, not the interest of the public.[1] The government supports groups and initiatives that support its own initiatives and goals. Private, government-friendly organizations, including government sector lobbying associations, use taxpayer dollars to advance the interests of bureaucrats and politicians.

Taxpayer-funded lobbying projects do not need to express both sides of an issue because they exist to promote one side of the issue.[23] Citizens are thus left with incomplete information about how their money is being spent, and are therefore excluded from the political process.

It expands government and hinders growth

Phil Kerpen of Americans for Prosperity wrote a paper in December 2008, arguing that although government sector lobbying goes largely unnoticed, it hinders limited government and pro-growth policies:
"Taxpayer-funded groups descend on Washington and state capitals every time legislation to limit the size, cost, and intrusiveness of government is under consideration."[24]
According to the report, government sector lobbying totaled $1.09 billion between 1998 and through the first-half 2008.[24] Similarly, a Tennessee Center for Policy Research report says public entities are spending an excessive amount of tax dollars lobbying for higher taxes and bigger government, which taxpayers frequently oppose.[25]

The Pacific Research Institute sees that the market-based constraints that discipline private spending on lobbyists are absent in government sector lobbying.[1]

It is the wrong priority

To others, spending on lobbyists seems to egregious when the government has other, more pressing priorities. “I don’t think the value is there,” said Genesee County, Michigan County Board of Commissioners Chairman Ted Henry. “I really question laying off people while we still spend $60,000 (on a lobbyist). I think it needs to be re-evaluated.”[19]

There is little accountability

Governments do not need to show results for their efforts because there is no immediate or direct feedback for poor performance. Governments do not face the resource and financial constraints under which private firms operate.[1]

Disclosing lobbying activities

Main article: Taxpayer-funded lobbying disclosure

There are many obstacles to tracking government sector lobbying. Available data is not coded to reflect whether entities are public, and many non-profit organizations that hire lobbyists receive taxpayer funding.[24][26] Information that is coded does not always represent the entirety of taxpayer funded lobbying. A 2010 study by the Pacific Research Institute attempted to analyze the amount of government sector lobbying in the state of California.[1] Researchers found the figure for lobbying reported as "government" of $92.6 million in 2007 and 2008 as inaccurate, with $131.4 million being a more accurate representation. That is a difference of $38.8 million not properly categorized as government sector lobbying because of the way the funds were disclosed.

Reporting includes only lobbying expenditures that are subject to disclosure, which means anything falling under the threshold for reporting does not count. However, while private lobbyists have a limit of $50 for gifts to the Senate (and the practice is banned in the House), public entities are exempt and can gift without any limit or disclosure. Therefore, these activities are impossible to measure.[24]

In Texas, the House of Representatives produced a report on ethical matters and government sector lobbying in 2006. The report found that there were glaring flaws in the disclosure and tracking of the spending of taxpayer funds. While not coming out explicitly against such activities, the House Committees recommended open, full, and consistent disclosure of lobbying expenditures be strictly enforced in order to fix the obvious inadequacies in the system. See Disclosure concerns in Texas

In New Jersey, county legislators in three counties (Morris County, Sussex County, and Warren) decided to withhold dues, in one case $10,000, until the New Jersey Association of Counties completes an audit.[27] This is in response to concerns that the association was not being transparent about its spending.

See also

External links

Opinion & editorial


References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 State-Level Lobbying and Taxpayers: How Much Do We Really Know?, Pacific Research Institute
  2. "How to Cure Pork," Wall Street Journal, January 23, 2006
  3. The Dangerous Cycle of Taxpayer-funded Lobbying, September 2009
  4. Follow the Money on Proposition 90
  5. Details of League of California Cities expenditures
  6. 6.0 6.1 6.2 6.3 AFP Texas Blog, "Focus on Taxpayer-Funded Lobbying Shifts to National Level"
  7. "How to Cure Pork," Wall Street Journal, January 23, 2006
  8. The State, "Clemson spends big on Washington lobbying," February 22, 2010
  9. "Tennessee cities spend millions lobbying," The Tennessean, September 18, 2009
  10. 10.0 10.1 Sibby Online, "Taxpayer funded lobbying, another IM10 reform issue," March 01, 2009
  11. Online Sunshine - Lobbying Information
  12. Florida School Boards Association members list
  13. Alaska Anti Corruption Act, Ballot Measure 1 (2010)
  14. America Blog, "Your tax dollars at work," July 21, 2009
  15. Cato@Liberty, "Taxpayer-Funded Lobbying," July 23, 2009
  16. "Bailed-out Companies Spend Millions to Lobby Congress," ProPublica, July 22, 2009
  17. Truthout, "Autos, Banks Spend $20 Million Lobbying," July 21, 2009
  18. 18.0 18.1 "Some bailout firms up lobbying spending in 2Q," Associated Press, July 21, 2009
  19. 19.0 19.1 19.2 19.3 19.4 19.5 19.6 The Flint Journal, "Taxpayers pay when local government agencies play politics," December 6, 2009
  20. Report concludes Tennessee cities overspending on lobbying
  21. "Tennessee cities spend millions lobbying," The Tennessean, September 18, 2009
  22. "Taxpayer-funded Lobbying: Tax Man vs. Taxpayer," Fall 2005
  23. "More Taxpayer-Funded Lobbying for Higher Taxes," Commonwealth Foundation
  24. 24.0 24.1 24.2 24.3 AFP Policy Paper: Taxpayer Funded Lobbying, December 18, 2008
  25. The Dangerous Cycle of Taxpayer-Funded Lobbying, September 2009
  26. Report details the cost of government sector lobbying
  27. "N.J. freeholder boards withhold dues from Association of Counties over agency's spending," NJ.com, February 14, 2010