http://www.politicsnh.com/sigel/11_6.shtml**************************
The federal spending cap structure may be one of the least understood aspects of the New Hampshire primary. That’s partly because the cap isn’t absolute, but limits only certain categories of spending. Campaigns can spend a lot of money here, as long as they manage their spending within the cap structure.
The federal spending cap for New Hampshire is approximately $700,000 – modest, at first blush. Each campaign is then allowed a “fundraising exemption,” which effectively doubles the cap to around $1.4 million.
Here’s where it gets interesting. Under the federal rules, major spending categories are exempt, or partially exempt, from the cap. For example:
* Media. A campaign’s biggest cost, by far, is TV advertising. According to the Federal Election Commission media costs are allocated based on the percentage of households within a state that comprise a station’s viewership. Thus, only around 15 percent of money spent on Boston TV counts against the cap. For example, a campaign could spend $2 million on Boston TV, but only $300,000 would count against the New Hampshire cap.
* Salaries for campaign staff. Hiring a talented staff and mounting a big, statewide field operation is expensive. An early starting, well-staffed New Hampshire campaign could easily exceed $500,000 in payroll and benefits costs. These costs do not count toward the cap.
* Direct mail. Mass mailings sent prior to the last four weeks of the campaign don’t count toward the cap. A simple, two-sided mail piece to 100,000 households costs around $50,000, and a fancy, multi-page pamphlet costs lots more. A campaign might do 5-10 cycles of mail to various targeted voters.
Managing to these and other exemptions, top-spending New Hampshire campaigns could easily exceed the $5 million mark, all within the cap. **************************
Longish, but you get the idea.