The U.S. Supreme Court, as expected, has agreed to hear a challenge to Arizona’s campaign finance law that could directly impact Hawaii’s fledgling experiment in public funding. At issue are so-called “equalizing funds” made available to publicly financed candidates who are being outspent by privately-funded opponents.

In Hawaii’s pilot project, which was implemented in the Hawaii County Council elections this year for the first time, qualifying candidates receive 90% of the average amount spent by the winning candidate in the same district over the prior two elections. An additional equalizing payments to the public candidate are triggered as their opponents or independent groups outspend them, with the equalizing funds being doled out on a sliding scale.

From the SCOTUSBlog:

The election subsidies cases from Arizona was before the Court in a preliminary way in June. Then, without noted dissent, the Court blocked the matching funds provision of state law, thus barring the scheduled payment of subsidies to state candidates who had qualified for public funds because they had agreed to limit the private donations they would accept for their campaigns. The cases to be heard — consolidated for one hour of oral argument (probably in March) — are Arizona Free Enterprise Club v. Bennett (10-238) and McComish, et al., v. Bennett (10-239).

Although election law experts regard the new cases as a major test of the entire concept of public financing of candidacies, it is unclear whether the final ruling will sweep that broadly. For example, the federal program of public grants to presidential candidates, if they abide by spending limits, is not an attempt to equalize the competition for the presidency, while Arizona’s program and similar programs in other states have that specific goal at their center. Under the Arizona law, a candidate who is running under donation and spending limits is eligible for subsidies only when that is necessary to allow them to catch up — at least part of the way — with a self-financed candidate who raises and spends more than the subsidized candidate.

If equalizing payments are found to be unconstitutional in the Arizona case, it appears that section of Hawaii’s law will fall as well.

Interest groups have lined up on both sides of the issue.

From the Institute for Justice, which supports the challenge:

The case seeks to vindicate the rights of independent political groups and candidates who do not take taxpayer funds to speak freely during political campaigns without having the government attempt to “level the playing field.” Under the Arizona law, if a group makes an independent expenditure in favor a privately financed candidate, the unelected bureaucrats at the Clean Elections Commission dole out an almost dollar-for-dollar amount of “matching funds” to the publicly funded candidate. That means that for every dollar a group or individual spends to support the candidate of their choice, over the publicly funded candidate’s initial government subsidy, the government pays an equal amount of money to the political competition. The Ninth Circuit, in contrast to controlling Supreme Court precedent and contrary to decisions from other federal appellate courts, found this system to be constitutional. IJ is now asking the Supreme Court to overturn the Ninth Circuit’s decision and hold that the Constitution does not permit the government to place its thumb on the scales in favor of taxpayer financed candidates in elections.

But from Public Campaign:

“For too long, special interests in Arizona have had politicians like Senator-Elect John McComish willing to do their bidding in order to gut the successful voter-approved Clean Elections system,” said Nick Nyhart, president and CEO of Public Campaign. “That’s what this lawsuit is about—and I hope the Supreme Court will see right through this transparent power grab.”

“Arizona Clean Elections has put elections back in the hands of voters—ensuring that the voice of ordinary people matters as much as special interest money and politicians are accountable to constituents instead of campaign cash,” said Nyhart. “While big money clearly has friends on the John Roberts-led Supreme Court, we’re hopeful that the legal team fighting for Arizona voters will successfully demonstrate that the system expands speech and invites even more participation in the political process.”

The Brennan Center also provides a useful collection of documents for further reading.