Washington (CNN) -- The Supreme Court has tossed out an Arizona law that provides extra taxpayer-funded support for office seekers who have been outspent by privately funded opponents or by independent political groups.
A conservative 5-4 majority of justices on Monday said the law violated free speech, concluding the state was impermissibly trying to "level the playing field" through a public finance system.
Arizona lawmakers had argued there was a compelling state interest in equalizing resources among competing candidates and interest groups.
"True when we said it and true today," said Chief Justice John Roberts in upholding recent precedent on the issue. "Laws like Arizona's matching funds provision that inhibit robust and wide-open political debate with sufficient justification cannot stand." He was supported by colleagues Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito.
In dissent, Justice Elena Kagan defended the law. "Arizonans deserve a government that represent and serves them all. Arizonans deserve the chance to reform their electoral system so as to attain that most American of goals," she said. "Truly, democracy is not a game." Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor supported her.
The ruling was the last expected to be issued by the high court this term. The justices are now on a three-month recess.
The high court last June temporarily blocked enforcement of the "clean elections" law during the 2010 elections, ordering state officials not to distribute money under the measure.
A federal appeals court had earlier approved parts of the sweeping campaign reform law. Several mostly conservative groups -- including current and former Republican state legislators -- subsequently filed an appeal with the high court, claiming their free speech rights were being hurt by the law.
Among other things, they contended private fundraising efforts would be hampered because of public election financing.
Arizona lawmakers have argued there is a compelling state interest in equalizing resources among competing candidates and interest groups. They contend the plan to provide matching funds advances that state interest in the least restrictive manner.
William Maurer, the attorney opposing the law, had told the court it interferes with the "voters' decision as to whom to elect to office, and the purpose of doing that ... (is) to raise the voices of those the government thinks (are) speaking too little and muffle the voices of those the government thinks (are) speaking too much."
The Obama administration backed the Arizona law. Bradley Phillips, attorney for the state, had said the proposed system would mean "more speech and more electoral competition."
The high court last year issued a landmark ruling on campaign finance reform, striking down a sweeping federal law and giving big business, unions and non-profits more power to spend freely in federal elections.
The so-called "Citizens United" decision has the potential of undoing a century of government efforts to regulate the power of corporations to bankroll American politics, by easing long-standing restrictions on "independent spending" by a range of independent groups seeking a voice in the crowded political debate.
Both that and the Arizona law were struck down on a similar conservative-liberal split by the high court.
The justices three years ago also struck down the so-called "Millionaire's Amendment" in the McCain-Feingold reform legislation. That provision had eased campaign spending limits for opponents of well-heeled congressional candidates who pour $350,000 or more of their money in an election cycle. The court majority said that any effort to level the playing field violates the First Amendment.
The Arizona law was approved by voters in 1998, when big money donations to state lawmakers was perceived by many reform advocates as creating a culture of corruption. It was passed in the wake of a statewide corruption scandal.
Opponents of the law said the matching funds scheme promoted by Arizona actually forced some candidates to reduce their own spending for fear of triggering increased money for their opponents. That, they argued, reduced the political speech of self-funded candidates.
From CNN's Bill Mears