Updated

A federal appeals court ruled for the first time Wednesday that a state can limit how much candidates can spend running for office, even if they are not receiving public funding.

Lawyers involved in the Vermont case said the question will ultimately have to be decided by the U.S. Supreme Court.

In a 2-1 ruling, the 2nd U.S. Circuit Court of Appeals upheld a 1997 Vermont law limiting spending by gubernatorial candidates to $300,000. So-called Act 64 sets lower caps for other state offices as well, down to as little as $2,000 for House hopefuls.

Circuit Judge Chester J. Straub said the limits "safeguard Vermont's democratic process from the corrupting influence of excessive and unbridled fund-raising."

In 1976, the Supreme Court held that states may not limit how much a candidate may spend unless the campaign is funded by taxpayer money. But the 2nd Circuit said it believes that case has been interpreted too narrowly in subsequent decisions.

In a dissent, Circuit Judge Ralph K. Winter said that the Vermont law violates candidates' First Amendment rights to free political speech.

The limits, he wrote, "limit political speech, including editorializing speech by the press, for no permissible purpose, and entrust those who enforce the law with unfettered and unconstitutional discretion to determine what acts of political advocacy are permitted and prohibited."

The appeals court also upheld Vermont's limits on campaign contributions. Gubernatorial candidates, for example, may accept no more than $400 from each contributor.

The appeals court did throw out portions of the law, including a 25 percent limit on contributions from outside Vermont.

The panel said it would let a lower-court judge decide whether the spending limits should apply to the 2002 campaign or should be delayed for two years.