California Capitol Hill Bulletin Page 1 THE CALIFORNIA INSTITUTE FOR FEDERAL POLICY RESEARCH 419 New Jersey Avenue, SE, Washington, D.C. 20003 Voice: 202-546-3700 Fax: 202-546-2390 e-mail: ransdell@calinst.org California Capitol Hill Bulletin Volume 3, Bulletin 31 -- September 5, 1996 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 WINS $5.5 MILLION IN MANUFACTURING EXTENSION PARTNERSHIP FUNDS FROM COMMERCE DEPARTMENT On Tuesday, the Commerce Department s National Institute of Standards and Technology (NIST) announced that California was the recipient of $5.55 million dollars in federal matching funds for new and expanded Manufacturing Extension Partnerships (MEP). The MEP provides services and support for small business manufacturers, giving them access to new technologies, resources and expertise. Of the $5.55 million dollars, $1.25 million went to establish the San Diego Manufacturing Extension Center, a new center serving the estimated 4,500 to 5,000 manufacturing firms in San Diego County. The remaining $4.3 million went to the four-year-old California Manufacturing Technology Center (CMTC) which provides assistance to small- and medium-sized manufacturers in the Los Angeles Basin, and helps improve their operational efficiencies and global competitiveness. With the increased funding, the CMTC plans to expand its operations
California Capitol Hill Bulletin Page 2 by creating three satellite offices in the Orange Region, the Inland Empire Region, and the Ventura Region. David Braunstein, the President and CEO of CMTC, noted that in the four years since CMTC was created, it has helped increase manufacturing productivity in the L.A. area by 18% and have saved regional manufacturers an average of $200,000 each. ENERGY & WATER APPROPRIATIONS CONFERENCE IMMINENT On Thursday, the House Appropriations Committee named conferees to the Energy & Water conference, signaling that the conference may begin shortly. Conferees will be every member of the Energy & Water subcommittee -- including Californians Frank Riggs (Windsor) and Vic Fazio (West Sacramento) -- and full committee leaders Bob Livingston and David Obey. The Senate had appointed its conferees when it passed its bill last month. California will have various concerns as the bill moves to conference, including various water projects, energy research funds, the National Ignition Facility at Lawrence Livermore Lab, and funding for magnetic fusion programs -- the Senate version funded fusion programs at a slightly higher level, and also avoids earmarks which would be problematic for California projects. PROPOSED COMPROMISE ON DISABLED EDUCATION FORMULA WOULD LIMIT HOPED-FOR FUNDING INCREASES FOR CALIFORNIA While it remains to be seen whether there is enough time in the 104th Congress for the Senate to pass it, staff are discussing a possible compromise on the funding formula for the Individuals with Disabilities Education Act (IDEA) which would break the present logjam holding back the bill. The House passed its bill before the August recess, but the Senate has yet to schedule floor consideration for its version of the bill, because of time constraints, the number of amendments that might be proposed, and concern about the differences between the House and Senate versions. The new proposal was reportedly drafted by House staff in an effort to move a bill to conference. The new proposal would retain the current funding formula for distributing the vast majority of IDEA funds. Current law distributes funds based on state-reported counts of disabled individuals, which critics claim can lead to inaccuracy and exaggeration by some states. The original House proposal would have replaced that technique with an objective formula based on numbers of children -- a scheme which would have increased California s share substantially. According to the Congressional Research Service, the state s share would eventually have risen from $229 million to $260 million under the original plan. The proposed compromise plan would significantly reduce California s increase. HOUSE SUBCOMMITTEE BEGINS HEARING SERIES ON DEPORTATION OF CRIMINAL AND ILLEGAL ALIENS On Thursday, the House Judiciary Subcommittee on Immigration and Claims held its first in a series of oversight hearings on the deportation of illegal and criminal aliens. Although two panels of witnesses were present to respond to Congressional inquiry on the subject, the bulk of the hearing consisted of a statements by committee members followed by questions directed toward Immigration and Naturalization Service (INS) general counsel David Martin. In his statement before the Subcommittee, Martin discussed the recent successes of the INS in identifying and deporting criminal and illegal aliens and the areas in
California Capitol Hill Bulletin Page 3 which the INS is seeking to improve its operations for this purpose. For a copy of Mr. Martin's testimony, contact the Institute at (202) 546-3700. The focus of the committee members questions related primarily to the INS's accounting of the number of aliens in the U.S. who have been incarcerated, who are here illegally, who have received orders of deportation, and who have actually been deported. Several subcommittee members expressed their desire that the INS provide Congress with a specific figure representing the total cost to the federal government of achieving the highest reasonable level of deportations of criminal and illegal aliens. On a related topic, the conferees for H.R. 2202 have yet to set a date for consideration of the immigration reform bill. HOUSE COMMITTEE HOLDS ISTEA FIELD HEARINGS ON BORDER INFRASTRUCTURE During the recent Congressional recess, the House Surface Transportation Subcommittee held two hearings on the reauthorization of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). The purpose of the field hearings, both of which took place in Texas, was to review southwest border infrastructure and motor carrier safety issues related to the implementation of the North American Free Trade Agreement. To this end, the subcommittee heard testimony from federal, state and local U.S. and Mexican officials, as well as private interest groups involved in cross border trade. Witnesses discussed such issues as local highway and bridge needs, motor carrier safety enforcement activities and practices, and the implications of NAFTA for local communities. Earlier in the year, a similar hearing examining California border infrastructure issues was held in San Diego. These hearings are part of a series of hearings examining highway and transit issues in preparation for next year's reauthorization. The text of the witnesses testimony will eventually be available on the Subcommittee s web site: (http://www.house.gov/transportation). At this time, the Subcommittee has scheduled future ISTEA reauthorization hearings. The Senate Environment and Public Works Committee has not yet held an ISTEA hearing. U.S. DEPARTMENT SEEKING TO IMPROVE MIGRANT EDUCATION The U.S. Department of Education is seeking to create between five and fifteen projects nationwide to improve the academic achievement of migrant students who move between school districts. According to the plan proposed in the August 20 Federal Register, the successful projects must employ electronic technologies. Proposals have not yet been solicited, and the Department will accept comments on its plan until October 4. California has a large proportion of the nation s migrant children; the state receives roughly one-third of federal migrant education dollars under Title One. For further information, contact the Office of Migrant Education at 202-260-1357 or e-mail to Kristen_Gilbert@ed.gov. HOUSE PASSES BILL TO RESOLVE TIMBER DISPUTE On Wednesday, the House passed a number of land transfer bills including H.R. 2711, which would implement a settlement agreement reached between the Eel River Sawmills and the Department of the Interior regarding the controversial Elkhorn Ridge timber sale. Shortly after the Bureau of Land Management (BLM) awarded Eel River Sawmills Inc. with the contract to harvest Elkhorn Ridge, litigation halted further logging. In May 1994, BLM canceled the sale after concluding that further logging would cause irreparable
California Capitol Hill Bulletin Page 4 environmental damage, in particular by threatening the habitat of the northern spotted owl and marbled murrellet. The agreement, authored by Congressman Frank Riggs (Windsor) and hailed by Congressman George Miller (Martinez) as an example of unprecedented bipartisan harmony, identifies substitute timber which is cleared for environmental concerns and of substantially equal value to the original timber award. REPORT RANKS CALIFORNIA AMONG STATES IN RANGE OF AREAS The California Budget Project has recently released a report which provides statistical information on California's ranking among states in a variety of economic and social indicators. The report, entitled How Does California Compare?, offers detailed comparisons of California versus other states in such areas as taxes, revenues, public spending, education, income and social services. According to the authors, the purpose of the report is to "provide Californians with the tools to evaluate public spending and policy priorities and their outcomes and effectiveness". The California Budget Project is a nonpartisan nonprofit organization based in Sacramento which provides information regarding state and local tax and budget issues. For a copy of the report contact the Institute at (202) 546-3700. INSTITUTE WELCOMES NEW CENTER FOR CALIFORNIA STUDIES FELLOW The California Institute is pleased to welcome Mr. Morgan Young as the 1996-97 Center for California Studies Federal-State Relations Fellow. The participant for this fellowship, which is sponsored by the California State University, is selected from the prior year's class of Assembly, Senate and Executive Fellows. A native of Humboldt County, Young received his B.A. from University of Colorado where he studied American History. During his term as an Assembly Fellow, Young covered criminal justice and transportation issues for Minority Floor Leader Assemblyman Richard Katz Los Angeles. While here in Washington, he will continue his studies at the Graduate School of Political Management of George Washington University. CALIFORNIA EXPORTS GREW 13.5% IN SECOND QUARTER Governor Pete Wilson announced Thursday that rebounding sales to Mexico and Japan fueled a 13.5% increase in California s exports during the second quarter of 1996, with exports rising to a total of $51.9 billion. Citing the state s dominance in computer equipment, electronics and industrial machinery, Wilson reported that overall export growth through the second quarter registered $6.2 billion and supported 118,000 jobs. Exports to Mexico increased by 21.4% or $700 million during the first half of this year -- an improvement over the $300 million decline during 1995. The largest increases were in agricultural products (69%) and textile products (60%). California s 13.5% increase out paced the U.S. increase of 7.6%. The state s share of the nation s exports increased to 16.7% in the period. NEW JOBLESS CLAIMS FALL IN CALIFORNIA AND U.S. New claims for unemployment benefits nationwide fell last week for the first time in a month, declining by 15,000, from 331,000 to 316,000. California s claims declined by 1,627 -- the largest decline among the states. The decline was a surprise to Wall Street analysts, who had expected a slight increase in claims.
California Capitol Hill Bulletin Page 5 TAX FOUNDATION ESTIMATES CALIFORNIA IMPACT OF DOLE TAX PLAN The Washington D.C.-based Tax Foundation recently released an analysis containing state-specific impacts of the proposed Dole tax plan. According to the report, Californians would, on average, fair slightly better than residents of other states under the proposal. Over the period of the plan (1997-2002), the report states, California's total federal income tax burden would be reduced by 11.9% (from $556 to $490 billion) compared to a 11.5% reduction for the nation as a whole. Based on the statistics provided by the Tax Foundation, California's average per-filer tax cut would be $4,645, 7.2% higher than the national average per-filer tax cut of $4,334.