The California Institute

To expand communications between Washington and California, the California Institute provides periodic faxed bulletins regarding current activity on Capitol Hill which directly impacts our state. Bulletins are published weekly during sessions of Congress, and occasionally during other periods. The e-mail edition is made possible in part by a computer server donation from Sun Microsystems.

D.C. Briefing on Electricity Deregulation in California

Appropriations Bill Voids Shift of Funds for State's Poor

NASA Could Take Another Budget Hit in 1999

Panel Investigates Trends of Hispanics in the U.S.

GAO Report Measures Benefits To Citizen Children of Illegal Aliens

Governor To Extend Bay-Delta Accord; Allocates Funds

Ninth Circuit Hears Encryption Case

Transportation Conference on Innovative Financing

IGCC Establishes D.C. Office

On Thursday, PG&E and Southern California Edison jointly briefed Congressional staff members regarding the impending January 1, 1998 implementation of the state's historic electricity deregulation movement.

California is one of only a handful of states that have moved toward electric deregulation since Congress approved legislation authorizing an open, wholesale electrical market in 1992. Under the state legislation strongly approved by the Legislature in August 1996, privately owned utilities such as Southern California Edison, PG&E and San Diego Gas & Electric -- each of whose operations are currently limited to specific regions of the state -- will be able to compete for customers across a $21 billion customer market that stretches from Oregon to the Mexico border. The expected rate cuts will not affect those covered by publicly-owned utilities such as SMUD in Sacramento and the Los Angeles Department of Water and Power.

In addition to outlining the companies' efforts to provide full retail competition to the public, the briefing also highlighted the media campaign undertaken by the Public Utilities Commission to educate Californians about the upcoming changes.
 

Provision in Labor-HHS-Education Bill Voids Shift of Title One Funds for California's Poor

In a maneuver often employed by powerful lawmakers whose districts stand to lose due to data shifts, Senator Tom Harkin (Iowa) has apparently used his Appropriations Subcommittee chairmanship to block the flow of Title One formula dollars from shrinking states to growing ones. The move will cost California's poor children tens of millions of federal dollars in the 1998-1999 school year alone.

Title One, at $7.4 billion the largest federal education grant and the fourth largest formula program overall, is among the programs which have suffered for many years because census poverty data is only estimated every 10 years. During the 1993-94 Title One reauthorization, Congress sought to remedy the problem by creating a mechanism for updating poverty figures intercensally -- thus allowing funds to flow toward states which experience faster growth between decades and thus deserve more funding.

According to the first figures released pursuant to this new system, the Census Bureau this spring determined that California's population of children in poverty had grown from nearly 900,000 in 1990 to nearly 1,400,000 in 1994. Relative to the rest of the country, California rose from housing 11.9% of the nation's poor children in 1990 to housing 14.1% in 1994, and our state accounted for nearly one-fourth of all U.S. child poverty growth for the period. In 1993, the state's child poverty rate of 24.1% was well above the national rate of 20.4%.

Based on these figures, California should thus have received a sizeable increase in Title One funding for FY 1997. But the Secretaries of Commerce and Education elected to soften the loss of funds to losing states by averaging new figures with old figures. If that wasn't enough, Senators from the 32 states which otherwise would have lost funds (led by the Senate Appropriations Committee) stepped in last May to provide an additional $100 million in federal funds to cut in half their prospective FY97 losses.

Finally last month, during the busy end-of-session activity on the FY98 Labor-HHS-Education appropriations bill, Senator Harkin and other losing state Senators inserted a 100% hold harmless provision, which essentially eliminates any shift for next year. (A recent story in Education Week magazine describes the maneuvering in greater detail <http://www.edweek.org/ew/vol-17/15title.h17>.)
 

NASA Could Take Another Budget Hit in 1999

Funding for the National Aeronautics and Space Administration (NASA) has declined slowly but steadily for several years, and according to some observers, the space agency could see a further decline in funding in fiscal year 1999 if the OMB's budget proposals are accepted.

NASA budget levels declined modestly from $14 billion in 1995 to $13.6 in 1998, even before any adjustment for inflation. According to recent Washington rumors, the OMB is seeking to set the NASA total for 1999 as low as $12.6 billion -- which would represent a decline of a full billion dollars from the FY 1998 approved budget level. NASA is reportedly also seeking an additional $600 million in projects to be funded from a pool of funds held back for OMB allocation.

In addition, plans are developing to conduct a second "zero based review" process. The first round -- zero-based one -- reduced NASA's employment base from 25,000 to 17,500. A second zero-based review could drop that figure to 14,000 or 14,500. According to sources, NASA's aeronautics programs may be placed in greatest jeopardy in the process.

California receives roughly one-fourth of federal NASA funding.
 

Panel Investigates Demographic Trends of Hispanics in the U.S.

The Population Resource Center, a nonpartisan, nonprofit public policy organization focusing on population trends and issues, hosted a briefing on Capitol Hill Wednesday to examine the role and impact of the decennial census on Hispanic populations in the United States. Speakers at the forum included the Census Bureau's Dr. Jorge del Pinal, Assistant Division Chief for Special Populations; Dr. Jorge Chapa of the University of Texas; and TerriAnn Lowenthal, project consultant for the Census 2000 Initiative.

Speaking to the issue of population trends of Hispanics in California, Dr. del Pinal noted that currently one-third of all Hispanics living in the U.S. reside in California. Further, he noted that the Hispanic population residing in California currently constitutes nearly one-third of the state's total population.

According to Census Bureau statistics, Latinos and Hispanics are expected to become the state's largest ethnic group, increasing from 9.2 million in 1995 to 21.2 million, while the non-Latino white population stands still at 16 million. As a point of comparison the Asian American population will grow 2 ½ times to 9.1 million, while the African American population is projected to rise to 3.4 million.

TerriAnn Lowenthal noted the importance of the impending 2000 census in determining population trends and centers of Hispanic population so that both the government programs and the business community can target appropriate services to the state's fastest growing population.

For more information about the forum contact Shelly Kossak of the Population Resource Center at (202) 467-5030.
 

GAO Report Measures Benefits To Citizen Children of Illegal Aliens

A recently released Government Accounting Office report measures the amount of AFDC and Food Stamp benefits paid to households with an illegal alien parent for the use of his or her citizen child. The report, Illegal Aliens: The Extent of Welfare Benefits Received on Behalf of U.S. Citizen Children, estimates that these payments account for approximately 3 percent of all AFDC and Food Stamp payments and, as expected, shows that the majority of payments are made to residents of just a few states, with California leading the list. California, New York, Texas, and Arizona accounted for 85 percent of the households receiving AFDC; and California, Texas, and Arizona accounted for 81 percent of all Food Stamp payments.

The report found that over $1.1 billion was spent in combined AFDC and Food Stamp benefits to illegal alien households with a citizen child -- $700 million in AFDC and $430 million in Food Stamp benefits. California households were the largest recipients of these benefits, receiving $720 million (about 65 percent) of the combined payments. The report estimates that in FY95 there were about 93,700 households in California headed by an illegal alien receiving citizen child benefits under AFDC, and about 120,700 of such households receiving Food Stamp benefits. The total number of households receiving benefits would differ, because many citizen children receive both AFDC and Food Stamp support and there is an overlap between the two categories.

The report was prepared for the House and Senate Judiciary Committees and can be obtained from GAO's Internet website at:<http://www.gao.gov/new.items/he98030.pdf>.
 

Governor To Extend Bay-Delta Accord; Allocates $33 million for Ecosystem Restoration Projects

Governor Pete Wilson recently announced that the state will sign a one-year extension for the CALFED Bay-Delta agreement to allow federal and state officials more time to develop a long-term solution for the state's water quality, supply and management needs. The initial Bay-Delta Accord set interim guidelines for managing and restoring the Bay-Delta over three years, and was set to expire on December 17.

In addition, the Governor announced the approval of awards totaling $33.2 million of the $60 million included in Proposition 204 for ecosystem restoration projects. These projects cover activities throughout the Sacramento and San Joaquin Valley, the Delta, Suisun Bay, and the North San Francisco Bay. The proposals are for a wide variety of ecosystem restoration, including floodplain and marsh habitat restoration, fish screen construction, improved fish passage, water quality monitoring and research, and control of exotic species.

In the meantime, CALFED's Integration and Development Team has developed three alternatives for Bay-Delta restoration. It is expected that the CALFED Policy Group will choose one of the three alternatives at its December 18-19 meeting.
 

Ninth Circuit Hears Encryption Case

The U.S. 9th Circuit Court of Appeals heard arguments this week on whether the federal ban on posting encryption codes on the Internet violates free speech. Daniel Bernstein, a mathematics professor in Illinois who was formerly a University of California-Berkeley graduate student brought the case. A federal judge sided with him earlier this year, ruling that the government ban was unconstitutional. The U.S. Attorney's office appealed to the 9th Circuit, arguing that the posting sensitive encryption codes on the Internet makes them available overseas and violates U.S. export control laws and undermines U.S. security.

The three-judge panel is expected to decide the case within a few weeks, but it is expected that any decision will be appealed to the U.S. Supreme Court. The case, when finally decided, could have far-reaching consequences for encryption product manufacturers, who are restricted from exporting high-level encryption products and devices under U.S. law. Legislation to ease these export controls was widely debated in Congress this year, but no final action has been taken (see Bulletin, Vol. 4, Nos. 17 (5/15/97), 22 (6/26/97), 26 (7/24/97), 27 (7/31/97), 29 (9/4/97), 30 (9/1197), & 32 (9/25/97)).
 

Transportation Conference Addresses Innovative Financing

Last week in San Diego, UCSD's Institute for the Americas and the Center for Infrastructure Finance Studies, with the help of the Federal Highway Administration, assembled transportation officials from 34 states and industry experts to discuss innovative financing methods for transportation projects. During the three day conference, participants discussed the potential for public-private partnerships to finance projects and innovative finance techniques used to finance current transportation projects. For further information regarding innovation financing methods, contact Dan Flanagan, President of the Center for Infrastructure/Finance Studies at 202-973-7609.
 

IGCC Establishes D.C. Office

The Institute on Global Conflict and Cooperation, a multi-campus research unit of the University of California which conducts research on the means of reducing conflict and establishing cooperation in international relations, established a Washington research and program office in August 1997. The Washington office, based at the University of California Washington academic center (UCDC), was established to develop programs and projects to promote closer links with the policy community and advance new research and educational opportunities related to international affairs for faculty, graduate students and undergraduates throughout the UC system.

Professor Bruce W. Jentleson, Professor of Political Science at UC Davis and Director of the UC Davis Washington Center, is the IGCC Washington Research Director. Monique Kovacs, a UC graduate who also holds a Master's degree from the London School of Economics, is the International Affairs Program Coordinator. Together they are working to build the UC presence in Washington, D.C. by: communicating results from IGCC research projects through conferences, briefings, and other means; enhancing intercampus cooperation via foreign policy-related programs at the UC Washington Center; and by increasing interaction between IGCC, government and nongovernmental organizations, and foundations in the Washington DC metropolitan area. The center will also sponsor Graduate Research Fellowships in Foreign Policy Studies and International Affairs Graduate Summer Internships.

For more information on IGCC in Washington, D.C., and its programs, contact Monique Kovacs at (202) 296-8183 <mkovacs@ucsd.edu> or Professor Bruce W. Jentleson at (202) 296-8221 <bwjentleson@ucdavis.edu>.