A Wake County Superior Court judge Monday upheld a $50 annual fee charged to attorneys to help pay for a public campaign financing fund, but he also gave them a bit more discretion in how the money can be spent.

Two attorneys, Catherine M. El-Khouri and W. Anthony Purcell, had sued the state over the fees, which are assessed through the North Carolina State Bar, Dan Kane reports.

The campaign fund pays for publicly-financed campaigns for state appellate judicial races and for a voter education guide. The attorneys had contended the fee represented a violation of their constitutional rights to freedom of speech and was an impermissible tax. They sued in October 2007.

Judge Howard E. Manning Jr. found that the fee is legal, but he also granted attorneys the option of designating their $50 fee to the voter guide. That way, he said, they would not be paying into the campaigns of candidates that they don't like.

"Overall, it's a positive decision for continued funding of a program that Judge Manning says serves a compelling state interest," said Bob Hall, executive director of Democracy North Carolina, a nonprofit that supports public campaign financing.

He said the attorney fee generates $1.1 million annually, about half of the total funds for the judicial public financing program. The rest comes from a voluntary $3 check-off on the state income tax form.

Update: Bob Orr, a former state Supreme Court judge who heads the N.C. Institute for Constitutional Law, also found plenty to like in Manning's decision. The institute had supported the lawyers' suit.

"From our perspective, the constitutional claim the suit was based on was upheld by the court," Orr said. "The remedy may be broader than we advocated for, but the underlying claim was upheld as unconstitutional. The $50 fee cannot go to candidates by fiat of the General Assembly."

A national research organization has published a report saying North Carolina has one of the best models of taxpayer-financed campaigns in the country.

The report examines a 2002 law that allows for publicly financed campaigns for state appellate court and Supreme Court seats. Candidates qualify for the program by raising a set number of small contributions in the primary and are then given funds for the general election.

In 2008, 31 of the 41 candidates for these seats received money from the program.

"North Carolina's judicial public financing program goes a long way to reducing the potentially corrupting influence of private contributions in judicial elections," said Jessica Levinson, the center's director or political reform, in a press release.

The Center for Governmental Studies, a non-partisan research group, published the report. The center also has released reports on other public financing laws in other states, including Florida, New Jersey and Minnesota.

While the report says the N.C. law is strong, it makes suggestions on how to improve the it.

The report's suggestions after the jump.

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A new poll shows that nearly half of North Carolina voters support expanding public financing for Council of State races.

The survey, from the N.C. Center for Voter Education, shows 47 percent support expanding public financing and 33 percent oppose it. Nineteen percent were unsure.

Seventy percent said they would favor Council of State candidates whose campaigns are funded by taxpayers over those candidates funded by the special interests their offices oversee.

In 2008, public financing was available for three Council of State contests: auditor, commissioner of insurance and state superintendent of public instruction. Legislation under consideration would expand the program to all Council of State races except governor and lieutenant governor starting in 2012.

The poll of 653 North Carolina voters was conducted from Apr. 28-30 by Public Policy Polling and has a margin of error of 3.8 percentage points.

Tom Lambeth remembers the bad-old days of campaign finance.

As chief of staff to Rep. Richardson Preyer in the 1970s, he recalls the days before post-Watergate reforms when lobbyists would hand cash-filled envelopes to Congressmen.

During his tenure as head of the Z. Smith Reynolds Foundation in Winston-Salem, he helped direct grant money and host conferences on campaign finance that indirectly led to the public financing of judicial campaigns and some Council of State races.

Now he's getting ready for an even bigger reform.

Gov.-elect Beverly Perdue has said she will appoint Lambeth to run an endowment that would providing public financing for gubernatorial candidates who pledge to run positive campaigns.

Lambeth, 73, says he spoke with Perdue about the endowment earlier this year and most recently about six weeks ago. He knows her from their work together on the N.C. Rural Economic Development Center and as a legislator.

More after the jump.

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The percentage of money in the campaign for N.C. Commissioner of Insurance that came from industries regulated by that office plummeted from 66 percent in 2004 to 5 percent this year, according to N.C. Voters for Clean Elections.

The figure dropped because both candidates in the commissioner's race chose to accept public financing, a pilot program in North Carolina in which the candidates receive public funding but must agree to fundraising limits. Commissioner-elect Wayne Goodwin, a Democrat, received $22,000 from members of industries regulated by the office, such as insurance, bail bondsmen and manufactured housing companies. Republican John Odom collected $9,600 from contributors in that category, according to the clean elections group's report.

Goodwin raised a total of $492,000, while Odom raised $433,000. 

The industry money for both candidates accounts for 5 percent of what they both raised, wrote Chase Foster, of the clean elections group.

By comparison, outgoing Commissioner Jim Long had no opponent in 2004 but still raised $354,000, two-thirds of which came from regulated industries. Candidates in lower tier races have long complained that businesses and groups regulated by their prospective offices are among the few who show interest in their campaigns, so they have no option but to raise money from them.

This year most of the candidates' money, $380,000 each, came from a public grant. In exchange they could only raise money for a limited time period early in the year and could not accept contributions greater than $200.