Campaign Fund Limits Rejected : Politics: State high court refuses to resurrect Prop. 68, ending chance for restrictions in ’94. In 4-3 vote, justices say watered-down competing measure remains in effect.

Squelching any chance for campaign spending restrictions on the eve of a heated election year, the California Supreme Court refused Monday to resurrect a successful 1988 initiative that would have imposed strict contribution limits on candidates.

Backers of Proposition 68 said the high court decision--coming more than five years after voters passed two competing campaign finance initiatives--frustrates the public desire to curb special interest spending, and they vowed a renewed effort to limit the influence of money in politics.

By a 4-3 vote, the court held that Proposition 68, sponsored by California Common Cause, is still superseded by its rival, Proposition 73, even though central portions of Proposition 73 have been struck down by federal judges.

“We conclude Proposition 73 remains effective in substantial part. . . ,” Chief Justice Malcolm Lucas wrote in one of two concurring majority opinions. “It follows that . . . Proposition 68 remains inoperative.”

Supporters of spending limits were disappointed by the decision and said they would push the Legislature next year to enact a broader version of Proposition 68 that would place campaign spending restrictions on members of the Legislature, the governor and other elected state officials.

Noting that the decision comes soon after the conviction of a prominent lobbyist and a former state senator, Common Cause officials said they also will urge candidates for office to sign a “clean government pledge” promising to vote for campaign finance restrictions if they are elected.

“It’s unfortunate that in 1988 the people of California voted not once but twice for reform, and there is still no reform,” said Common Cause spokeswoman Cecilia Gallardo. “We would like the Legislature to make comprehensive finance reform a top priority in 1994.”

If enacted, Proposition 68 would have provided up to $175,000 in taxpayer funds to qualified legislative candidates who agreed to abide by spending limits, which would have ranged from $150,000 to $350,000. The measure also would have placed limits of $1,000 to $5,000 on campaign contributions during each election cycle.

By contrast, Proposition 73 banned public financing and imposed contribution limits of $1,000 to $5,000 per fiscal year. The measure written by three legislators--including one who is now in federal prison on corruption charges--placed no restrictions on campaign spending but banned legislative mass mailings funded by taxpayers. Although Proposition 73 was designed to negate Proposition 68, it was promoted by its sponsors as a reform package.

Faced with the competing initiatives on the June, 1988, ballot, voters passed both but gave more votes to Proposition 73.

In 1990, the California Supreme Court ruled that the two measures fundamentally conflicted and therefore that no part of Proposition 68 should take effect because it received fewer votes.

But last year, a federal appeals court threw out much of Proposition 73, ruling that its contribution limits were unconstitutional because the fiscal year system generally gave challengers less time to raise money than incumbents.

As a result, Common Cause and its supporters went back to the Supreme Court arguing that no substantial portion of Proposition 73 remained in effect and that Proposition 68 should become law.

In an unusual decision, the four-member majority of the court was split over what significant portions of Proposition 73 remain in force.

In one opinion, Chief Justice Lucas and Justice Ronald M. George held that Proposition 73 is still substantially in effect because the federal judges had not thrown out its ban on state-paid mass mailings.

But in a concurring opinion, Justices Marvin Baxter and Edward A. Panelli concluded that the initiative remains in effect because the ban on public financing stands by itself despite the federal ruling that the contribution limits are unconstitutional.

In a strongly worded dissent written by Justice Armand Arabian and joined by Justices Stanley Mosk and Joyce Kennard, the minority argued that no significant portion of Proposition 73 remained in effect and that Proposition 68 should be resurrected.

“It is plain that those who supported the measure would not have settled for a ban on mailing privileges, a truly trifling ‘reform,’ had they foreseen the total frustration of their overriding aim in passing the initiative--imposing limits on campaign contributions. . . ,” Arabian wrote.

Attorney Lisa Foster, a Common Cause board member, joined in assailing the majority’s logic, noting that the mass mailing provision was such a small feature of Proposition 73 that it was never even mentioned in campaign ads or ballot statements. She also said the split majority opinion leaves it unclear whether Proposition 73’s ban on public financing remains in effect should another system of tax-supported campaigns be enacted by the Legislature.

For some longtime advocates of overhauling the state’s campaign finance system, the court’s ruling leaves little hope of enacting change in the near future.

“The voters of California have indicated they wanted reform and now they are not going to get it,” said Robert Stern, who was the co-author of the California Political Reform Act and who wrote a model law on which Proposition 68 was based.

Stern and former Gov. Edmund G. (Jerry) Brown Jr., who sponsored the 1974 Political Reform Act, agreed there is little hope of legislators themselves changing the rules governing the way they collect money.

“The Lucas court has arrogantly rewritten the law to serve judicial whim and further undermine democracy in California,” Brown said. “The court majority shows more solicitude for the lobbyists in Sacramento--now spending $100 million a year to influence politicians--than they do for the majority of Californians who voted for political reform.”

In Sacramento, reaction to the court decision ranged from support to strong opposition.

Sen. Bill Lockyer (D-Hayward) said the court acted correctly in not resurrecting Proposition 68, saying that efforts to make sense of voter actions in 1988 and since would be hopeless.

Sen. Tom Hayden (D-Santa Monica), however, said the court action demonstrates how the system of checks and balances has broken down. The decision, he said, “should anger the public and please the special interests. Here you have justices who are supposed to be independent but are themselves creatures of the same system of political campaign finance and special interest favoritism that they are supposed to regulate.”

Times staff writer Mark Gladstone in Sacramento contributed to this story.