The state Supreme Court has upheld the city's campaign-finance ordinance, ruling 5-2 that the city has the legal authority to set its own limits on campaign contributions.

Mayor-elect Michael Nutter, who helped get the city ordinance through Council and navigated it more successfully than any of his competitors, yesterday hailed the decision.

"The Supreme Court ruling is great for the city," Nutter said. "Having these campaign contributions in place will help us in our larger goal of cleaning up the political culture of corruption that has gone on in this city too long."

Nutter is to be sworn in as mayor a week from today.

In a decision rendered Friday and posted online yesterday, the state's top court affirmed a Commonwealth Court's decision earlier this year that the city's campaign-finance limits are valid.

"This basically was the last hurdle," attorney Susan L. Burke, who argued the case on Nutter's behalf before the state Supreme Court, said yesterday. "Now, we know it [the city's campaign-finance ordinance] stands. It is the law. The Supreme Court has spoken."

When the General Assembly rewrote Pennsylvania's campaign-finance laws in 1978, it was silent on the issue of contribution limits. In its recent decision, the state's top court basically had to consider what the Legislature's silence meant.

Did it mean the state was prohibiting campaign-contribution limits in any Pennsylvania races or did it leave the law open for municipalities to enact their own limits, as dozens of municipalities have done across the country?

In its majority opinion, written by Justice Max Baer, the state's top court ruled that it cannot be inferred that the state General Assembly's silence meant it was prohibiting Philadelphia and other cities from enacting their own campaign-finance ordinances.

Chief Justice Ralph J. Cappy and Justice James J. Fitzgerald III dissented. In the dissenting opinion, Cappy wrote: "I conclude that silence in this case speaks volumes. . . . By not addressing limits on campaign contributions . . . the Legislature reflected its intent not to provide for such limitations."

Cappy also expressed concerns that the majority opinion would lead to the " 'balkanization of the Election Code,' since any locality will be free to adopt its own campaign financing regulations."

The effort to throw out the city's campaign-finance law was led by attorneys for U.S. Rep. Chaka Fattah, one of Nutter's opponents for the Democratic mayoral nomination, and John Dougherty, leader of the electricians union, who had considered running for mayor.

Fattah's attorney, Gregory Harvey, said last night: "The dissent written by Chief Justice Cappy understood Fattah's major argument and agreed with it. . . . The silence of the Legislature [in 1978] as to dollar limitations was decisive in indicating that the Legislature did not intend to permit such limitations."

The city ordinance limited contributions to a candidate to $2,500 a year from individuals and $10,000 from political-action committees, law firms and other unincorporated businesses.

In the mayor's race, the annual limits were doubled because of the millions that business executive Tom Knox poured into his own race.

Zack Stalberg, president of the Committee of Seventy, the election-watchdog group, said yesterday of the court's ruling: "It's a big victory for Philadelphians, and it's a big blow to pay-to-play."

He said he hoped that Nutter would evaluate the law in his first 100 days and figure out how to make it even more effective.

In April 2006, Nutter filed a lawsuit against four potential mayoral rivals, including Fattah and Dougherty, seeking an injunction ordering them to return any contributions above the limits.

The potential rivals challenged the complaint, and Common Pleas Judge Allan Tereshko upheld their challenges last December, ruling that the city did not have the constitutional authority to pass campaign-finance laws.

After the city Law Department and Nutter appealed, Commonwealth Court in April reversed the lower court's decision, and ruled in favor of the city's campaign-contribution limits. *