Testimony of Amy Loprest on Legislation to Permit Campaign Funds to be Used for Childcare Costs

06/19/2018

Good Afternoon Chair Cabrera, Chair Rosenthal, and members of the Committees on Governmental Operations and Women. My name is Amy Loprest and I am the Executive Director of the New York City Campaign Finance Board (CFB).

Thank you for the invitation to provide testimony on Int. No. 899, which would permit campaign funds to be used for certain childcare costs for children under 13 years of age, for which the candidate is a primary caregiver.

For over 30 years, the city’s public matching funds program, which we administer, has opened the door for aspiring officeholders of all backgrounds to run competitive campaigns. We are supportive of efforts to continue removing the barriers that keep qualified New Yorkers from seeking elected office.

As we consider the legislation, we have identified some administrative and practical concerns.

Currently under the Campaign Finance Act §3-702(21)(b), childcare costs are clearly included among expenditures that are not in furtherance of a political campaign for elective office. The bill would amend the Act to allow the expenditure of campaign funds on childcare costs that would not exist but for the campaign, or campaign activities. Such expenditures would not be an allowable use of public funds.

To ensure the legislation fulfills its intent, we have identified some recommendations for further review.

The definition of “childcare costs” should be clarified. We would recommend the bill clarify that permitted campaign expenditures pertain specifically to childcare services, such as a qualified caregiver or daycare. One model is the definition of eligible expenses under the Dependent Care Assistance Program (DeCAP) for city employees.

Under DeCAP, pre-tax funds can be used to pay for employment-related dependent care expenses performed within or outside the home while a city employee and the employee’s spouse is at work or attending school full time. A qualifying caregiver is someone who is not a dependent, spouse, or spouse’s child.

Paying a family member for childcare expenses presents a unique issue. The bill does not explicitly carve out as impermissible payments to a family member for childcare arrangements. However, §3-702(21)(a) does not extend the presumption that the enumerated expenditures are in furtherance of the campaign to payments made to a candidate’s spouse, domestic partner, child, parent, or sibling. If the Council were to use the DeCAP definition for childcare services, dependents, spouses, and spouse’s children would not be covered, but considerations would have to be made for other family members, such as grandparents or siblings.

Candidates should be required to show eligibility before making expenditures for child care. As drafted, the bill would require the candidates to fill out an “approved statement of childcare need” with the Board, which the Board could approve in whole or in part, or deny. We agree candidates should be required to make a showing that the expenses “would not exist but for the campaign,” and as such are permissible campaign expenses. However, the statement—if approved—should certify only that the expenses exist solely because of the campaign. It should not constitute a pre-approval of individual childcare expenditures, which would still be subject to post-election audit review—as are all other types of expenditures.

The Board anticipates promulgating rules to clarify the standard and how candidates will be able to satisfy it. An open, transparent rulemaking process, in consultation with potentially affected stakeholders, will help ensure the Board can develop guidelines that are both practical and fair.

The timing of campaign-related childcare costs should be considered. While childcare costs would not be a qualified expense, under the legislation they would be subject to the spending limit—which should help limit the overall amount that candidates spend on childcare costs through their campaign. However, the bill does not specify if campaign funds for child care costs can be spent in the “out-years” or post-election. It is likely that the need is greatest in the year of the election, and we recommend that expenditures on childcare services be permissible in the year of the election only.

Privacy concerns should be addressed. With regards to disclosure around the issue of childcare expenses, there must be a balance between ensuring proper documentation is maintained and submitted to the Board, and protecting children’s information from disclosure. The Board is sensitive to these concerns, and we believe they can be addressed through the rulemaking process, but we thought it important to raise them here.

We hope you will take these concerns into consideration.

Thank you for the opportunity to testify today. I am happy to answer any questions you may have.