This report by the Secretary of State provides campaign financing information (beginning cash on hand as of 7-1-98, total receipts and expenditures from 7-1-98 through 12-31-98, and ending cash on hand and debts as of 12-31-98) for all 1998 general election candidates for California Constitutional Offices, the California State Senate, and the California State Assembly Districts 1 thru 29, Assembly Districts 30 thru 59 and Assembly Districts 60 thru 80.

The report also identifies and ranks all legislative candidates from high to low based on the amounts of their total contributions received, total expenditures made, and total ending cash on hand. Specifically, the report lists from high to low all Senate Receipts, Senate Expenditures, Senate Ending Cash, Assembly Receipts, Assembly Expenditures, and Assembly Ending Cash. These rank-order lists identify legislative candidates with the largest financial transactions. For example, Senate Expenditures show that the two top spenders among Senate candidates were the opponents in Senate District 2; Republican John Jordan spent $2,694,602 in his losing campaign against Democrat Wes Chesbro, who spent $2,375,358. (Although he was not a candidate, Senate President pro Tempore John Burton spent $7,368,487 during the general election, primarily in the form of transfers to Senate candidates.) And Assembly Expenditures show that the largest expenditures were made by Speaker Antonio Villaraigosa ($8,043,859) and Minority Floor Leader Bill Leonard ($2,807,719), who transferred most of their funds to other Assembly candidates.

The report also shows receipts and expenditures during the last six months of 1998 for all incumbent state officeholders who were not candidates in the general election (i.e., officeholders who were leaving office and State Senators in odd-numbered districts who were not up for election in 1998). This includes Non-Candidate Constitutional Officers, Non-Candidate State Senators, and Non-Candidate Assembly Members.

And the report includes a summary of campaign financing activity in connection with the State Senate District 9 Special Elections of September 1 and November 3, 1998.

In the 1998 general election for Governor of California, Gray Davis spent $28.6 million to defeat Dan Lungren, who spent $23.8 million. As shown in Figure 1, the expenditures by these candidates set a new record for spending in a general election race for Governor.

Although Gray Davis spent more than any previous candidate in a general election race for Governor (and so did Dan Lungren), it is interesting to note that these expenditures were not the all-time record for a gubernatorial candidate in California. That record is held by Al Checchi as a result of his 1998 primary election expenditures. Grand total expenditures in the 1998 primary election campaigns for Governor were:

During the six-month period of July 1 through December 31, 1998, grand total campaign receipts, expenditures, and ending cash on hand (as of 12-31-98) for all major party candidates for the State Legislature were:

The history of campaign financing in California's general elections is shown for the State Legislature in Figure 4 (Receipts), Figure 5 (Expenditures), and Figure 6 (Ending Cash on Hand). In terms of grand total receipts, expenditures and cash on hand, Figures 4, 5, and 6 indicate that the 1998 general election for the State Legislature was similar to the previous 1996 general election. Figure 4 shows that 1998 grand total receipts of $52.8 million were slightly less than 1996 receipts of $53.3 million. Figure 5 shows that 1998 expenditures of $56.6 million established a new spending record by exceeding 1996 spending of $55.6 million. And Figure 6 also shows that total cash on hand of $8,613,958 held by all legislative candidates after the December 31^st close of the 1998 general election period was slightly more than the $8,606,023 held in 1996.

Although grand total general election receipts and expenditures for 1996 and 1998 legislative campaigns were similar, it should be kept in mind that only the 1998 legislative campaigns were conducted simultaneously with campaigns for constitutional offices. In other words, while the 1998 general election candidates for the State Legislature were raising $52.8 million and spending $56.6 million, candidates for Governor and other constitutional offices were simultaneously raising $72.1 million and spending $80 million.

Figures 4, 5, and 6 provide a "big picture" perspective on the financing of California's general election legislative campaigns by showing the history of grand total, or aggregate, amounts of money spent by all major party candidates for the State Legislature. A different and equally important perspective addresses the question of how much it costs for an individual candidate to run for a seat in the State Legislature. In other words, how much have individual candidates spent, on average, in their general election campaigns for the State Legislature?

Figure 7 identifies the average amount spent by legislative candidates in general elections from 1976 through 1998. Figure 7 shows that, in 1976, the average expenditure by an Assembly candidate was slightly more than $20,000. (Note: "Average" campaign costs are determined by using the statistical "median" which is the midpoint in a series of ranked numbers. For example, during the 1976 general election, half of the 153 Assembly candidates spent more than $22,064 and the other half spent less. Hence, $22,064 is the median, or average, campaign cost.) By the mid- to late-1990s, the average expenditure by an Assembly candidate increased to approximately $150,000. Similarly, average spending by State Senate candidates rose from approximately $50,000 in the mid- to late-1970s, to nearly $250,000 in 1998.

The analysis of average campaign costs provides insights into important issues related to the role of money in politics. One of these issues is the difference in the amount of campaign funds spent by incumbents versus their challengers. Figure 8 shows the average campaign spending of incumbents versus challengers in general elections for the Assembly and Senate. In both Assembly and Senate campaigns, the differences are striking. However, for the purpose of showing historical trends, an analysis of Assembly campaigns is superior to Senate campaigns because the larger number of Assembly campaigns provides greater statistical reliability. Consequently, the data for Assembly campaigns are portrayed as a graph in Figure 9 which shows the huge and growing differences between campaign spending by incumbents versus challengers.

Another important issue related to the role of money in elections is the relationship between the amount a candidate spends and whether or not that candidate wins or loses. Figure 10 compares the average campaign costs of winners versus losers. Although it is not surprising that Figure 10 shows winners have always significantly outspent losers, it is interesting to note the tremendous increase over time in the "differential" between winners and losers - both in terms of absolute dollars and spending ratios. For example, Figure 10 shows that, in 1976, Assembly winners outspent Assembly losers by a ratio of less than 3 to 1. By the late 1990s, that ratio had become approximately 14 to 1. The information in Figure 10 for Assembly campaigns is portrayed as a graph in Figure 11.

Figure 12 provides the final historical comparison of average campaign costs by general election legislative candidates. This comparison of Democrats versus Republicans does not show consistent trends based on political party affiliation. Rather, the variations over time are more likely caused by the fluctuating number of candidates in each party who were engaged in competitive elections because competitiveness is the most important factor associated with high campaign costs.

See Preface and Technical Notes for a discussion of the report's methodology.