The California Institute For Federal Policy Research 419 New Jersey Avenue, SE, Washington, D.C. 20003 202-546-3700 fax: 202-546-2390 ransdell@calinst.org http://www.calinst.org California Capitol Hill Bulletin Volume 5, Bulletin 1-- January 8, 1998 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. CALIFORNIA MOURNS LOSS OF REP. SONNY BONO California's congressional delegation and the nation mourned the loss of Rep. Sonny Bono (Palm Springs) this week. On Monday, while on vacation with his family at Lake Tahoe's Heavenly ski resort, Rep. Bono died in a skiing accident. Before coming to Congress in 1994, Bono was a well-known entertainer and served as mayor of the City of Palm Springs from 1988-1992. Rep. Bono is survived by his wife, Mary and four children. His funeral will be held in Palm Springs on Friday and a memorial service in Washington, D.C. will be announced at a later date. Condolences may be sent to Rep. Bono's Washington Office, 324 Cannon Building, Washington, DC 20515. In lieu of flowers, the family has requested contributions be made to the following charities: City of Palm Springs D.A.R.E. (Drug Abuse & Resistance Education) Program, Attn: Lt. Mike McCracken, P.O. Box 1830, Palm Springs, CA 92263; and the Olive Crest Homes for Abused Children, 383 S. Palm Canyon Drive, Palm Springs, CA 92262. By law, Governor Wilson has 14 days to announce the date for a special election to be held within 120 days of the vacancy of the seat. BOXER CIRCULATES TRANSIT FUNDING LETTER In response to rumors that President Clinton plans to cut transit funding 10% in his upcoming FY1999 budget proposal, Senator Barbara Boxer is circulating a bipartisan letter asking the Administration to maintain transit funding at least at the FY1998 levels. Last year, the Transportation Appropriations bill provided $4.8 billion in transit funding. The letter states that this funding "is particularly important in California which has four of the top 10 most congested urban areas in the United States." According to the letter, the Sacramento Rapid Transit District, Bay Area Rapid Transit District (BART), Santa Clara Transportation Agency, San Diego Metropolitan Transportation District, and the Los Angeles County Metropolitan Transportation Authority rely on grants from the Federal Transit Administration and would be adversely affected by a cut in transit funding. Members wishing to sign the letter should contact Guy Ziv with Senator Boxer at 224-9180 by the close of business on Friday, January 9th. EDUCATION AND INFRASTRUCTURE TOP WILSON'S FINAL STATE OF THE STATE ADDRESS In his eighth and final State of the State address as Chief Executive in California, Governor Pete Wilson placed educational reform and repair of the state's aging infrastructure at the top of his 1998 legislative agenda. Addressing a joint session of the legislature in its first week back from winter recess, Wilson called for a statewide competency test to be administered to students in grades one through four and seven and ten, for advancement to the next level. Wilson also pushed for a private voucher system for students attending the state's lowest performing schools. Previewing Friday's official budget proposal to the legislature, the Governor asked lawmakers to authorize a $2 billion bond for school construction, $1 billion for university renovation, $1.3 billion for water projects and $800 million for parks. In order to alleviate concerns about such new spending plans, Wilson also announced his plans for a new and tighter cap on growth in the state budget. Other proposals highlighted in Wilson's address are: Standardized Tests Requiring students to pass a statewide standardized test in grades one through four and seven and ten to advance to the next level. Students who do not pass these tests are required to take summer school, and if they fail the test after summer school, must repeat the previous grade. Support for continued use of the Scholastic Aptitude Test (SAT) in university admission formulas. School Vouchers Proposal for "opportunity scholarships" available to 15,000 students in the state's poorest performing schools to attend a public or private school elsewhere. "Poorest performing schools" would be determined by aggregated standardized test scores. Infastructure Bonds A $5.1 billion bond proposal to build and repair schools, water projects and parks (see separate article on water projects and parks bond); and $5 million to continue planning the 10th campus of the University of California, in Merced. State and Local Expenditures Adjusting the 1979 Gann formula used to determine annual state spending. Support for lowering the threshold required for local school bond approval from a 2/3 majority to a simple majority. The Governor's Budget will be available Friday afternoon on the Department of Finance's Internet website at: . NATURAL DISASTER INSURANCE MARK-UP SCHEDULED IN HOUSE The House Banking Committee's Housing and Community Opportunity Subcommittee has scheduled a mark-up for the natural disaster insurance bill on February 4. The bill, H.R. 219, was introduced last year by the Subcommittee's Chairman Rick Lazio (NY), and Reps. Vic Fazio (West Sacramento) and Bill McCollum (FL). It authorizes the Secretary of the Treasury to establish a federal program to provide reinsurance for state disaster insurance and reinsurance programs. The reinsurance contracts authorized under the bill would cover losses caused by hurricanes, earthquakes, and other perils, such as fires and tsunamis, caused by earthquakes. Although the bill does not enjoy the support of all interested parties, the Chairman hopes the mark-up will provide some momentum for establishing a much needed federal disaster insurance program. WILSON PROPOSES TWO BONDS FOR BAY-DELTA AND WATER PROGRAMS In his State of the State Address, Governor Wilson announced that his FY98-99 Budget will propose two new bond programs to meet the state's water, environmental, and recreational needs. The first is for a $1.3 billion general obligation bond for water supply, watershed and ecosystem projects. It would include funding for continued feasibility studies and advanced planning for the Bay-Delta improvement project, as well as for water recycling, conservation, and management programs. The second bond of $791 million would be used for watershed, wildlife, parks, and coastal protection and improvement programs. It includes $95 million, contingent on federal matching funds, to fund California's share of the Lake Tahoe Environmental Improvement Program and a $130 million to fund the state's share of the 1996 agreement to purchase 7,500 acres of virgin old-growth redwoods in the Headwaters Forest. FEDERAL JUDGE STRIKES DOWN CAMPAIGN FINANCE RESTRICTIONS On Monday, federal Judge Lawrence Karlton struck down the state's campaign finance laws that were adopted in November 1996 with the approval of Proposition 208. Stating that "the effect of the initiative is not only to significantly reduce a California candidate's ability to deliver his or her message, but in fact to make it impossible for the ordinary candidate to mount an effective campaign for office," Karlton ruled that the one-year old law violated the First Amendment's free speech and free assembly provisions as defined by the U.S. Supreme Court in the landmark 1976 case Buckley v. Valeo. The ruling, which Karlton issued without a stay or provision to delay the effect of his decision, immediately eliminates the contribution caps placed on candidates under Proposition 208 -- $100 for local candidates, $250 for legislative candidates and $500 for statewide candidates. While the Proposition was written with severability clauses included in it - allowing for Karlton to consider the spending cap separately - the judge decided not to invoke the severability clause because, in his words, the contribution caps were "the linchpin of the measure." Karlton did order the state Fair Political Practice Commission to file an immediate petition with the California Supreme Court to seek a ruling on whether any parts of the measure are severable or capable of being rewritten to pass constitutional muster. Proponents of the ballot initiative have said that they will appeal the case to the 9th Circuit Court of Appeals immediately and ask that court to issue a stay on Karlton's ruling. IMMIGRATION COMMISSION ISSUES FINAL REPORT TO CONGRESS At the end of December, the U. S. Commission on Immigration Reform issued its final report to Congress entitled, Becoming an American: Immigration and Immigrant Policy. This report along with three interim reports in 1994, 1995, and 1997 is intended to provide a framework for immigration and immigrant policy for the United States over the next several years. Among its conclusions, the report recommends restoring the eligibility of legal immigrants for public benefit programs; reducing over time annual legal immigration levels for nuclear family members to 550,000; and establishing a new federal grant program to support information clearinghouses in communities receiving new immigrants to provide basic orientation information. The report also calls for a comprehensive restructuring of responsibilities within the federal government. For instance, it proposes stripping the INS of its responsibilities over immigration benefits and labor standards and transferring these functions to the Departments of State and Labor, respectively. The report also makes several recommendations aimed at assimilating immigrants into the American culture through adult education programs, English language programs, and teacher training programs. For more information on the report, contact the Commission at 2430 E Street, NW, South Building, Washington, DC 20037; telephone number 202-776-8400. STATE'S POPULATION GROWS 1.3 PERCENT ACCORDING TO CENSUS BUREAU Last week, the U.S. Census Bureau released state population data for the previous year ending in July. California's population rose 1.3%, exceeding the nation's growth rate of 0.9%. By far, California is the nation's most populous state, but not its fastest-growing. While California's population increase of approximately 410,000 was the most in terms of people, Nevada had the nation's fastest growing rate for the 12th consecutive year. From 1996 to 1997, Nevada's population increased 4.8% followed in second place by Arizona at 2.7%. California was the 12th fastest-growing state. Overall, the West region (Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming) was the nation's fastest-growing region, gaining 1.6% to surge to more than 59 million people. The U.S. Census Bureau estimates California's population, as of July 1997, at 32,268,301 people. California's Department of Finance, however, estimates California's population at 32,609,000 (January 1997). According to the Department of Finance, both agencies use similar methods to calculate the state's population, but Finance uses different indicators to measure domestic migration. Look for Finance's July 1997 population estimates later this month. Its Demographic Research Unit operates an automated number for state, city, and county population estimates at (916) 322-4651. The Census data is available at: . REPORTS SAY ROBUST CALIFORNIA ECONOMY According to end-of-the year reports from several industry and government sources, California made impressive economic gains in 1997. In November 1997, California's unemployment rate fell to 5.8%, its lowest rate in seven years. The California Economic Development Department's monthly survey said 70,000 more people started work between October and November, with the largest gains reported in the retail, services, and manufacturing sectors. The entertainment industry also added 4,400 jobs that month and is credited for continuing to energize the Los Angeles region's economy. The Los Angeles Economic Development Corporation (LAEDC) forecasts the addition of 16,000 jobs in the entertainment sector in 1998, approximately one-fifth of all new employment forecasts for the region. More than 50,000 new businesses were started in California last year, according to a study by CDB Infotek. Overall, incorporations statewide were up 6.2% in 1997, with the Central Valley (15.8%), San Francisco Bay Area (8.5%), and Southern California (5%) all reporting increased rates of incorporation. The California Association of Realtors also reported large increases in the sales and prices of single-family homes in California in November 1997 compared to estimates made at the same time last year. Median prices rose 10.4%, from $175,500 in November 1996 to $193,750 in November 1997. While most groups predict continued growth for the California economy in 1998, several forecasters warn that Asia's financial crisis may slow the growth of the state's economy. 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