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.

Salton Sea Briefing
Special Elections
Los Angeles MTA Suspends Work on Three Rail Projects
NASA Budget
Briefing on Transportation Data
Sacramento's 2000 Census Rehearsal
Electricity Deregulation Implementation Delayed
Legislative Analyst Predicts CA Surplus
Commission Reports Findings on Cost of Higher Education
Proposal to Reduce California's Welfare Penalty to be Considered
State Senate and Assembly Democrats Select New Leaders
Raytheon Plans Layoffs
Los Angeles Jobs Linked To Exports
Entertainment Industry Leads Southern California Economic Recovery
 

Salton Sea Briefing Examines Future of Lake
    On Thursday, representatives from the Salton Sea Authority conducted a congressional briefing on the future of the massive and increasingly salinized Salton Sea that spans both Riverside and Imperial counties just east of San Diego County.
    Of particular concern is the fact that the Salton Sea ­ the water source for much of the inland empire's vast agricultural lands ­ has become increasingly salinized to unusable levels and is currently at a critical point as far as sustaining riparian and aquatic wildlife. The shallow 380 square-mile water bed, which sits 227 feet below sea level, is almost 25 percent saltier than the ocean.  If left unchecked, the Salton Sea, which has no outlet, will continue to increase in saline level and eventually become unusable.  Scientists have been very active in offering solutions to stabilize the health of the lake.  Proposals for stabilization include: the construction of a lake-internal dike system in which saline can be separated and concentrated away from the water; construction of a pipeline system that would remove salts by pumping water from the Salton Sea (or highly saline water from the diked impoundment) to the Sea of Cortez; and finally, a more elaborate proposal would include a pipeline from the Salton Sea to the Sea of Cortez coupled with another pipeline returning less saline ocean water from the Sea of Cortez back to the Salton Sea.
     Members of the Congressional Salton Sea Task Force, which includes Rep. Ken Calvert (Riverside), Rep. Jerry Lewis (Redlands), Rep. George Brown (San Bernardino), and Rep. Duncan Hunter (El Cajon), have been crafting legislation to provide the resources necessary to alleviate the problems associated with the Salton Sea.  The Task Force is expected to finalize legislative proposals in the near future in preparation for moving a bill forward in the early stages of the second session of the 105th Congress.  A representative for Governor Wilson indicated that the Governor is supportive of the Task Force's efforts and will actively work with the Task Force to create a California-Federal partnership to stabilize the Salton Sea.  Additionally, following the death of Rep. Sonny Bono, who supported the clean up of the Sea, Speaker Newt Gingrich indicated that he also would support legislation to assist in the restoration efforts.

Special Elections to Fill Capps, Bono, Dellums Seats Take Shape
    Three special elections to fill the seats vacated by the imminent retirement of Rep. Ron Dellums (Oakland), and the deaths of Reps. Walter Capps (Santa Barbara) and Sonny Bono (Palm Springs) have begun to take shape.
    In the 22nd District, Lois Capps, Assemblyman Tom Bordonaro, and Assemblyman Brooks Firestone faced each other in a January 13th special election.  No candidate managed to garner 50 percent of the vote, the total required to avoid a runoff election.  The top two vote getters, Lois Capps and Tom Bordonaro, will now face each other in a runoff election set for March 10th.
    In the 44th District, Governor Wilson announced last week that a special election to fill Rep. Bono's seat will be held on April 7th.  The only announced candidate is Mary Bono, Sonny Bono's widow, who publicly announced her plans Thursday.
    No election date has been set for retiring Rep. Ron Dellums' 9th District seat.  State Senator, and former Dellums aide, Barbara Lee is widely expected to announce her candidacy for the office.  Oakland Mayor Elihu Harris announced this week that he will decline to make a bid for the office and will retire from politics altogether.

Los Angeles MTA Suspends Work on Three Rail Projects
    In keeping with the recommendation of Los Angeles Metropolitan Transit Authority (MTA) CEO Julian Burke and pressure from federal transportation officials, last week the Metropolitan Transportation Authority's (MTA) board of directors voted 10-3 to suspend construction for at least six months on three MTA subway and light rail projects.  This action was taken in an effort to put the regional transportation agency's finances in order.  However, the MTA board decided to continue work on a 6.3 mile subway extension of the Metro red line connecting downtown Los Angeles to North Hollywood because MTA officials said it would cost more to halt the project than to finish it.
    A recent audit of the MTA's finances showed the agency in financial crisis; if MTA had continued construction on the subway and light rail projects on the current schedule it would face a $727 million deficit.  Even with work on the three subway and light rail projects suspended, the audit said MTA will need to find an extra $465 million to fund existing bus and train services over the next six years.
    It is unclear whether MTA's financial woes will affect the amount of state and federal funds it receives to complete the Los Angeles subway and other projects.  The MTA received $61.5 million in federal funding last year for the red line extension.

NASA Budget Cuts May be Smaller Than Predicted
    A recent report by Congressional Quarterly states that the National Aeronautics and Space Administration (NASA), once slated for as much as $1 billion in cuts, will be reduced by only $200-300 million in the FY1999 budget proposal to be released February 2nd.  The publication speculated that a letter received from 201 representatives and another from seven aerospace leaders played a role in convincing the White House to boost the request.  NASA's 1998 appropriation is $13.6 billion.  Historically, a large share of NASA expenditures are made in California.

PRC Briefing on Transportation and Census Data Link
    On Thursday, the Population Resource center held a briefing entitled "Transportation and the U.S. Economy: the Vital Census Data Linkage" to explain the connection between the decennial census and transportation planning and policy.  Transportation related data is collected by the Census Bureau on the "long form," distributed to one in every six people as part of the decennial census.
    Alan Pisarski, Chair of the Transportation Research Board Committee on National transportation statistics and author of "Commuting in America," discussed his use of census data to determine commuting patterns.  Ed Christopher, Director of Information services for the Chicago Area Transportation Study, explained how metropolitan planning organizations use the data collected by the Census Bureau to complete long-range transportation plans required by law and to inform decision-makers.  He stressed the need for the collection of transportation related data by the Census Bureau. Ronald Tweedie, director of the planning bureau of the New York State Department of Transportation, explained the need for consistent data.  Finally, Jacqueline Byers, director of research at the National Association of Counties, citing the lack of affordable and efficient transportation for welfare recipients, discussed how counties use census data to find ways to help welfare recipients get to where the jobs are located.  Census long form data is also used to allocate federal formula dollars for transportation and other programs.  For more information on this briefing, please contact the Population Resource Center at 202/467-5030.
 
Census Bureau Director Meets with Sacramento Officials
    In preparation for a "dress rehearsal" of the 2000 census to be held there this spring, outgoing Census Bureau Director Martha Farnsworth Riche met Thursday with local government officials and nongovernmental organizations in Sacramento to discuss plans for the event.  Sacramento is the only urban site for the dress rehearsal (others will be held in rural South Carolina and on a Wisconsin Indian reservation), and it is the only site where statistical sampling techniques will used to supplement the traditional headcount.
    Topics scheduled to be discussed Thursday included: making local residents aware of the 1998 dress rehearsal; recruiting local temporary workers; forming local answer-the-census committees; promoting the census with residents to encourage prompt response to the questionnaire; and disseminating summaries after the census.
    At a news conference Wednesday in Southern California, Riche commented that, if statistical sampling is not used in conjunction with the census, "hundreds of thousands of Californians could be overlooked," thereby costing the state federal formula dollars and perhaps a congressional seat.  The Southern California event was held at the offices of the Mexican American Legal Defense and Education Fund, and included comments by Los Angeles area Reps. Lucille Roybal-Allard and Xavier Becerra.

Electricity Deregulation Implementation Delayed
    California's historic transition to a competitive and open electricity market was delayed from its initial January 1, 1998 target date and will now likely go into effect no later than March 31st.  The delay is a result of an order issued by the California Public Utilities Commission (CPUC) after unexpected complications in the computer programs that will control and monitor the distribution of open market electricity to individual consumer households proved too much to overcome by the January 1 deadline.  In the interim, CPUC has ordered a 10 percent electricity rate reduction for individual and small business consumers until the free market transition can be made in March.

Legislative Analyst Predicts $500 million Budget Surplus
    Last week, the state's Legislative Analyst, Elizabeth Hill, predicted that state revenues would exceed the Governor's budget forecasts by at least $500 million.  However, the Department of Finance said it was too early to predict whether the revenues would materialize, despite the strong performance of the state's economy in recent months.  If you would like to read more about the Legislative Analyst's findings, the LAO's "Overview of the 1998-99 Governor's Budget" is available on-line at <http://www.lao.ca.gov/budget_overview_198.html/>.

Commission Reports Findings on Cost of Higher Education
    The National Commission on the Cost of Higher Education adopted the recommendations contained in its report, "Straight Talk About College Costs and Prices" this week after five months of work.  Most of the Commission's recommendations to the President and Congress emphasized the need for a shared partnership between the public and private sector to find solutions to the increasing price and escalating costs of higher education.  Notably, the Commission found that college costs have levelled off over the past three years but the concern about rising college prices is real.  Recognizing that there are many other issues related to the cost of higher education that the Commission did not have time to examine, several Commissioners commented that student financial aid processes are too complicated and confusing.  Dr. Barry Munitz, former president of the California State University System, served as Vice Chairman of the Commission and Dr. Jonathan Brown, President of the Association of Independent California Colleges and Universities, also was a member of the Commission.  The Commission will post its report on two web sites: <http://www.acenet.edu> or <http://www.chronicle.com>.
    Congress will continue to consider reauthorization of the Higher Education Act (HEA) of 1965 this session, although Congress may not complete its work this year.  The Higher Education Act authorizes the federal government's student aid and institutional support programs and is responsible for approximately $35 billion in student financial assistance.  President Clinton has said his budget for fiscal year 1999 will propose an increase of 55,000 work-study jobs, a program governed by the HEA.   California's Department of Finance projects there will be 2,447,409 students enrolled at the University of California, California State University, or at a California Community College by the year 2006.

Proposal to Reduce California's Welfare Penalty to be Considered
   In what could result in an important financial break for the state, a key author of the 1996 welfare reform law appeared ready last week to propose changes to the act that would prevent California from being assessed a $4 billion non-compliance penalty.  Rep. Clay Shaw (Fla.) has recently suggested that Congress should scale back the automatic penalties imposed on states that fail to build centralized computer systems to track parents owing child support.  The proposal would significantly benefit California, which faces a $4 billion penalty under current law, but would only be liable for $12 million under the proposed change.  California is among a large number of states which has not yet implemented a unified system, and it has the largest caseload of any state.
    The alternative plan would allow the Health and Human Services Department to sanction California and other noncompliant states for each year without a unified network. However, a less punitive amount could be assessed, at the discretion of the Secretary.  The penalty could rise from 4% of the state's federal child support enforcement block grant the first year of non-compliance with a ceiling of 20% in the fifth year (roughly rising from $12 million to $60 million).
    Rep. Shaw's Ways and Means Subcommittee on Human Resources is scheduled to hold a hearing on the issue at 9 a.m. on January 29 in B-318 Rayburn House Office Building.

State Senate and Assembly Democrats Select New Leaders
    Earlier this week State Senate Democrats, who hold a 23-16-1 edge in the 40 member body, selected former Rep. John Burton (San Francisco) as their nominee for Senate President Pro Tem.  Burton will assume the top leadership post from Sen. Bill Lockyer (Hayward) – who relinquishes his post to concentrate more time on a state-wide election bid – contingent on the success of a largely symbolic vote by the entire Senate in February.  Burton was first elected to the Assembly in 1964 before departing for Congress in 1974.  Burton returned to the Assembly in 1988 and was elected to the State Senate in 1996.
     On Wednesday, the Assembly Democrats voted unanimously to nominate Antonio Villaraigosa (Los Angeles) to succeed Cruz Bustamante (Fresno) as Speaker of the Assembly.  Like the Burton nomination, Villaraigosa's selection all but assures his success in the eventual vote by the Assembly.  Like Lockyer, Bustamante steps down from the leadership post to concentrate more time on a state-wide election bid.  Villaraigosa was first elected to the Assembly in 1994.

Raytheon Plans 10,000 Worldwide Layoffs, Some in California Possible
     In order to consolidate its operations after its recent acquisition of Hughes Electronics and Texas Instruments, Raytheon Co. is expected to lay off 8,000 to 10,000 workers soon, perhaps within a few days.  Following the Hughes acquisition, Raytheon now employs nearly 20,000 Californians, most in El Segundo and Fullerton.  Other major states for Raytheon include Texas (25,000 employees), Massachusetts (14,500), and Arizona (10,000), though a Massachusetts press report estimated the impact in that state would be minimal.  The company is headquartered in Lexington, MA.

Los Angeles Jobs Closely Linked To Export Trade
     A study recently released by California State University at Long Beach found that exports are responsible for more than 850,000 jobs in Los Angeles, Orange, Riverside, San Bernardino and Ventura counties.  Those jobs represent 14 percent of the total employment in those counties.  Lisa Grobar, the associate professor who authored the study, pointed out that her numbers may in fact be conservative, because of the difficulty in pinning down hard data.  Nevertheless, the study shows the importance of exports to the regions economic resurgence.
     Of the 850,000 jobs, export manufacturing supports 200,000 jobs directly and 400,000 indirectly.  Tourism and service-related exports account for about 253,000 of the jobs created.  On a country by country breakdown, the study found that 142,500 jobs are related to trade with Japan, while Mexico, Canada, and South Korea accounted for between 50,000 to 60,000 jobs apiece.

Entertainment Industry Leads So. California Economic Recovery
     A three-part feature in this week's Los Angeles Times highlights the entertainment industry as a catalyst for Southern California's ongoing economic recovery from the early 1990s recession.
     According to the feature - focusing on the industry's currently increasing job growth, worker salaries and overall revenue - entertainment and its related subsidiaries will become a $40-billion annual business in California by 2000.  Illustrating the industry's rapid growth, the article cites a Los Angeles Economic Development Council's finding that employment in the entertainment field has increased 83% over the past seven years - from 143,000 workers at the beginning of the decade to 262,000 this year.
     The industry - which in its broadest definition includes production in television, motion pictures, music, advertising, theme parks and multimedia - is being credited by economists for propelling Southern California out of its early-decade economic tailspin, caused in part by defense cuts.  State officials have estimated that for every job lost in aerospace, two jobs in the entertainment sector were created, many with smaller, entrepreneurial entertainment companies and contractors.  (A nascent recovery in aerospace employment, when coupled with strong growth in entertainment and other services, may signal the beginning of a Southern California boom.)  In addition to the increase in number of jobs within the industry, the article also reports that the average weekly salary in entertainment is more than double that of many other industries -- in excess of $1,200 per week.