In the final days of her campaign for Portland city commissioner, Loretta Smith received two donations worth $20,000 each. One was from the Keep Portland Safe, the police union’s political action committee (PAC). The other was from the Equitable Housing PAC, a landlord lobbying group.

Smith lost to her opponent, Jo Ann Hardesty, despite out-fundraising her by an almost two-to-one margin. As Portland voters chose Hardesty, seen as the more independent, progressive candidate, they also voted to reform campaign finance law, passing Measure 26-200.

Measure 26-200 will place limits on how much individuals and corporations, including PACS, can donate to city-level campaigns. Individual donors will only be allowed to donate up to $500, while corporations will be limited to $10,000 not be allowed to make campaign donations. That means Smith’s last-minute $20,000 donations from two PACs wouldn't have flown.
Correction: We previously reported that corporations will be able to make campaign contributions up to $10,000 under the new rule; that is not the case. That $10,000 limit applies to independent expenditures, not direct campaign donations. The new rules will not allow corporations to make any direct campaign contributions.

“We’re changing the culture of big-money donations in our city,” said Jason Kafoury, one of the people behind the measure, the day after it passed.

It’s worth noting that there is a way fundraising PACs could still make donations under the measure: by donating as a “small donor committee,” essentially parceling together individual contributions of no more than $100 per person. The new city rule will require organizations explain exactly where that money is coming from.

The folks behind Measure 26-200 say that if their $500 individual donation limits had been in place during this election cycle, the script in the Smith-Hardesty race would have been flipped. Because a large amount of Smith’s individual donations were in excess of $500, her fundraising would have been limited to about $100,000, rather than the $700,000 she did raise.

The measure's rules would have had a much smaller impact on Hardesty, who relied more on small individual contributions. Her roughly $300,000 in campaign contributions would have been reduced to about $230,000.

“Of course, having $500 limits will change the behavior of some donors,” said Dan Meek, another of the measure's architects. “For example, if a person now gives $1,000 to a city council candidate, in the future that person might give $500, with her or his spouse also giving $500. So the measure's effect will not be as dramatic [as our projections].”

The Measure 26-200 team also was behind a similar measure limiting campaign finance at the county level, passed by Multnomah County voters in 2016. The constitutionality of that measure is currently being debated in court, but Kafoury said he intends to continue to push campaign finance reform around the state.

Looking further into the future, Kafoury would like to see Portland adopt a model like Seattle’s, where each resident receives a $100 “democracy voucher” that they can donate to the political campaign of their choice, or choose to not donate at all. That system has resulted in more young people, women and people of color donating to campaigns than ever before.

“This is just the beginning,” Kafoury said.