Editor’s note: Alec Hughes is a former Daily staffer. Hughes did not contribute to the reporting of this article.

Ann Arbor’s Proposition D, which would create a fundraising fund for city council and mayoral candidates, was met with controversy in the run-up to Election Day after the attorney general’s office claimed it violated state law.

Prop D, written and introduced by Voters Not Money, a nonpartisan organization that works to keep big corporations out of elections, proposes that the city of Ann Arbor allocate 0.3% of Ann Arbor’s general fund – which comes from taxpayer money – to one to allocate small donor matching funds. The fund is available to all candidates running for office in Ann Arbor if they choose not to receive donations from large organizations. Ann Arbor City Council candidates can receive a maximum of $40,000 for their campaigns, and mayoral candidates can receive a maximum of $90,000. For every dollar donated, the city would provide $9.

The review by Attorney General Dana Nessel (D) found the proposal was illegal because it outlined procedures for using the funds, but under state law only the Ann Arbor City Council has the authority to distribute city funds.

“The mandate of this charter amendment to provide a specific annual appropriation to a fair elections fund would run counter to the requirement of Section 16 of the UBAA, which assigns to the City Council annual responsibility for allocating funds for city government, taking into account available funds and their allocation transfers determination of the amount of property taxes to be collected in the city for that year,” the review states.

LSA senior Alec Hughes, co-chair of the UM College Democrats, wrote in an email to The Daily that the organization is concerned about the legality of the proposal and its impact if passed.

“At College Democrats, we do not have significant legal expertise, but we will defer to those who do,” Hughes wrote. “Attorney General Nessel’s office has already stated that Prop D would conflict with state law. If this is the case, the passage of Prop D in November could well lead to litigation between Ann Arbor and the State of Michigan… This is just one of many concerns we have about Prop D, and that’s why we’re asking voters to: to vote no to that.”

However, Prop D proponent John Godfrey argued in an email to The Daily that this type of specific funding allocation is consistent with state law and is very common.

“The state budget law only requires that the council review appropriations each year and then decide the amount of property taxes to levy – it does not prohibit citizen-initiated appropriations petitions,” Godfrey wrote. “In fact, municipalities in Michigan often pass similar petitions and charter amendments for budget priorities, such as road funding.”

Fahey Schultz Burzych Rhodes PLC, a municipal law firm representing Voters not Money, supported Godfrey’s claim in a September press release.

“The budget law does not prohibit initiative petitions from dealing with city funds,” the press release states. “In fact, local communities often present, pass and pass petitions, ordinances and charter amendments for local priorities such as road funding.”

Gov. Gretchen Whitmer said in a letter to the city of Ann Arbor that she could not review the proposal because Prop D was not received by the state for review until after the state submission deadline.

“Because Michigan residents should know that all proposed charter changes have been thoroughly reviewed by our office and the Attorney General’s Office before being put to a vote, we have recommended that cities submit proposed charter changes to our office at least 60 days in advance of this one.” Deadline,” Whitmer wrote. “In light of the above, I am formally informing you that I cannot agree to these proposed charter changes.”

Whitmer’s statement was viewed by many Ann Arbor citizens as a rejection of the proposal. Rackham student Bradley Popovich told The Daily that Whitmer and Nessel’s statements about the proposal influenced his own opinion as someone who supports Whitmer’s administration.

“I tend to deny, but I think that may be because I would consider myself a liberal and the sources I read from — that suggested denying — were liberal,” Popovich said. “Attorney General Dana Nessel – her office said it was illegal and she was part of (Whitmer’s) administration. And I worked for Michigan State for years under (Whitmer’s) administration, so I usually rely on what they have to say.”

Godfrey explained in an email to The Daily that Whitmer’s statement reflected a lack of time to consider the proposal rather than a statement on it.

“Governor Whitmer did not object to the legality of the proposal, which she would have done had she found substantive problems with it from a legal perspective,” Godfrey said. “Her only concern was that she didn’t have enough time to review the wording — not its legality.”

Ann Arbor residents have also raised concerns about the implementation and effectiveness of Prop D. The nonprofit Michigan Deserves Better sent postcards to Ann Arbor residents urging them to vote no on Prop D and claiming that Prop D had no government oversight or protections. Ann Arbor Mayor Christopher Taylor echoed that sentiment in a previous interview with The Daily, noting the lack of specific rules and regulations governing the use of the matching system.

“There are no fraud protections or threshold requirements as is common with campaign matching systems,” Taylor said. “Ultimately, it imagines a logical consequence of huge federal spending at the local level… Big money isn’t in local elections.”

Godfrey explained in an email to The Daily that the purpose of the change was to establish general guidelines. Specific enforcement mechanisms such as regulatory requirements and fraud protection, Godfrey said, are the responsibility of the City Council to implement.

“The mayor’s assertion that the proposed charter amendment does not provide for ‘fraud protection or threshold requirements’ is a vexing misrepresentation of the facts that is often repeated by opponents,” Godfrey wrote. “It is the Council’s proper responsibility to adopt regulations and policies that provide these protections and requirements – these administrative specifics do not belong in a charter that defines general purposes and parameters. It is irresponsible for opponents to continue to make this claim because it lacks substantial context.”

The same postcard claimed that Prop D is similar to New York City’s public financing system, which is currently the focus of criminal charges against New York City’s mayor after he allegedly fraudulently obtained $10 million in taxpayer money through the public fund . Godfrey countered that claim in an interview with The Daily, saying that the grassroots nature of Ann Arbor’s proposed donor matching program clearly distinguishes it from those exposed to corruption.

“There are about 20 or 30 (cities) that have roughly similar programs, but the background is important — these are all grassroots, locally driven campaign finance reform efforts,” Godfrey said. “As these are grassroots initiatives, there are differences between them depending on the local situation. New York City tried this several years ago, but it was entirely designed by politicians and was corrupt.”

Godfrey went on to say that Ann Arbor’s electoral system makes the city particularly favorable to this type of reform, unlike other cities that have tried similar means, such as New York City and Denver.

“We also have a remarkably well-defined local electorate,” Godfrey said. “We have these wards. And those districts are just five sections, almost equal sections of Ann Arbor’s population, about 25,000 to 30,000 people each. These are not particularly complex communities. And we think this architecture is ideally suited to this type of reform.”

Taylor also argued that Prop D would deprive taxpayers of funds for more important public goods and services.

“I think this is deeply unwise,” Taylor said. “We don’t have to take $425,000 out of services to fund political campaigns.”

Godfrey rejected those arguments in an email to The Daily, saying the cost per resident per year would be less than a cup of coffee.

“The city of Ann Arbor’s annual budget is more than $565 million per year,” Godfrey said. “Prop D would allocate about 0.08% of the city’s total annual spending, or just 0.3% of its general fund budget, to a small donor campaign fund.”

Godfrey, in an interview with The Daily, emphasized the importance of small donor matching funds like Prop D in the years since the 2010 Citizens United Supreme Court case, which increased the monetary influence of large corporations and wealthy donors in elections.

“The Supreme Court has opened the door to this and handcuffed us as citizens, with the one exception that a voluntary small donation fund is constitutionally permissible,” Godfrey said. “This is the tool we have that is left to us – the only tool to ensure that the everyday citizen can participate and compete and have a voice and voice where they live in their local democracy.”

Daily Staff Reporter Lyra Wilder can be reached at [email protected]. Hailey Nichols contributed reporting to this article.

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