The contribution caps - $5,000 from an individual donor and $20,000 from a political committee - have shaped the race for mayor, making it harder for four rivals to raise enough money to compete with self-financed millionaire Tom Knox in the May 15 Democratic primary.
One of those candidates, U.S. Rep. Chaka Fattah, vowed yesterday to appeal the ruling to the state Supreme Court.
"We cannot allow one candidate to buy the election while others toil under limits," Fattah spokesman Solomon Jones said in a statement.
The U.S. Supreme Court has consistently ruled that people have a First Amendment right to spend as much of their own money as they want on a campaign. Knox has paid $4.3 million for TV ads.
Yesterday's decision by Commonwealth Court, an intermediate rung of the judiciary, overturned the December ruling of Common Pleas Court Judge Allan L. Tereshko. He threw out the city ordinance on the ground that only the state can regulate campaign matters.
In yesterday's majority opinion, Judge Doris A. Smith-Ribner wrote that there are only a few areas in which local government cannot enact rules that supplement state law: alcohol, banking and strip mining. She also said the city ordinance furthered the goals of the state Ethics Act.
The dissenter, Judge James Gardner Colins, wrote that the legislature surely never intended the "balkanization" of election laws, with standards changing from town to town.
Colins said the decision was "well intended" but amounted to legislating from the bench.
Mayoral candidates have been raising money in accord with the limits while the litigation was pending. Supporters of the ordinance were jubilant yesterday - and said that even if the state Supreme Court invalidates it, such a decision would likely come too late to change this campaign.