"Burn Rates" and the Campaign Finance Reports of Indianapolis Mayor Ballard and Marion County Prosecutor Carl Brizzi

Over at the IPOPA, Chris Worden discusses something referred to as the "burn rate" on the finance report filed by Marion County Prosecutor Carl Brizzi. Basically the term relates to how fast a candidate "burns" through the money he or she is raising.

Elections cycles have distinct patterns. A candidate raises a ton of money leading up to the election, and spends almost all of it. The year after the election, the candidate scales his campaign organization way back (if not dissolving it completely). While the candidate raises some money in the two years or so after the election, very little of it gets spent. Then final two years, the candidate begins stockpiling money again for the upcoming re-election bid. (I'm assuming a four year term here.)

Someone who is seriously a candidate for office does not burn through all the money he or she raises the year leading up to the Election Year.

Worden proceeds to examine the "burn rate" of the various candidates:

After review of Carlito's year-end campaign campaign finance report, I'm convinced he must have really thought he was going somewhere else. Otherwise, I can’t account for what has got to be an unprecedented non-election year burn rate. In 2009, Brizzi raised $138,573, but he spent $124,291 (actually it was $129,942.27 - Worden missed the unitemized expenditures on the report) without making a single media-related or strategic (polling/message consultants) purchase, meaning his income to expense ratio was 1.1. For comparison, Democratic Prosecutor candidates Terry Curry and David Orentlicher had rate of 3.0, and 410 respectively. No, that’s not a typo. David O. raised $184,000 by spending $484, from which I can only conclude that he writes some very persuasive postcards.

Democratic mayoral hopefuls Melina Kennedy’s and Brian Williams have rates of 7.8 and 3.3 respectively. Mayor Greg Ballard posted a solid fundraising year of $830,000 earned, but he spent $377,000 to do it, for only a 2.2 rate.

Burn rates tend to be consistent even when the scale of a campaign changes. For example, Marion County Clerk Beth White spent $3,000 to raise $12,000, for a 4.0 rate.
Admittedly, burn rate is more art than science. For example, Williams spent a considerable amount on production costs early which means he jumped ahead of a conventional campaign. His rate would be a lot more efficient without that cost, so you have to scrutinize the expenses.

Yet even with such limitations, ratios serve as a useful gauge of campaign efficiency. For example, Brizzi’s staff cost him $33,000 to raise that $138,000, for a 4.1 staff to dollars ratio. In comparison, Kennedy raised her $252,000 on about $11,000 in staff costs for a 25.1 staff to dollar ratio, making Kennedy finance director Katie Lineweaver the best buy in Marion County politics.

What struck me as the most unusual in Mayor Ballard's 2008 report was not the money he raised, but the amount of money his campaign spent during an off-year. Ballard's 2009 report continues to show the same pattern - high off-year expenditures, thanks in no small part to having full-time campaign staff and paying Hallowell Consulting political consulting fees of at least $10,000 a month. Frankly, given that Mayor Ballard has done almost everything wrong from a political standpoint for two years straight, I have to wonder about 1) the quality of the advice Jennifer Hallowell is providing; or 2) if the quality is good, why Ballard isn't following it.

While Mayor Ballard's off-year spending appears foolish, Prosecutor Brizzi's report demonstrates beyond a doubt that he never intended to run for office in 2010. Brizzi spent 94% of the money he raised in 2009, without running a single commercial. The spending is constant through 2009, indicating that the decision not to run in 2010 was made fairly early.

Yet, Brizzi's fundraising during 2009 continued unabated. Some Republican donors should be more than a little upset that the Prosecutor misled them into giving donations, donations that were used by Brizzi to live the high life - limousines, dining out at nice restaurants, etc.