Western Electrical Contractors Association, Inc.

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WECA Political Update December 7, 2023

Thursday, December 7, 2023

Changes in WECA Government Relations:

A message from Richard Markuson

California is a challenging regulatory environment. Recognizing that, WECA leadership has enhanced the WECA Government Relations role by promoting Rex W. Hime to Government Relations Director.

Rex was previously WECA’s Regional Relationship Manager for California’s Central Valley.

I will remain an integral voice for WECA as its state and federal lobbyist. I’ve known Rex and his family for years and know he brings renewed energy, dedication, and wisdom to this vital function at WECA.

In his new role as Government Relations Director, Rex endeavors to protect the rights of merit shop business owners and their employees throughout the Western United States.

“I want to make sure that WECA is involved not only in local politics but also increasingly engaged in each of the communities we serve because that is essential to bringing awareness to our merit shop philosophy. I believe that emulating our presence in Sacramento in each of the regions we serve is crucial to educating and advocating successfully,” Rex says. “A lot of legislation comes out of Sacramento, but with 58 counties, 482 cities, and even more municipalities in California alone, having boots on the ground whose sole job is to wave our members’ flags around the West is imperative to the future of the industry. We also have significant plans to increase WECA’s presence and advocacy efforts in Arizona and Utah.”

However, Rex warns that WECA’s efforts can only succeed if those in the merit shop community are involved.

“Luckily, our members embrace the idea that political action is not simply prudent but essential to preserving and enhancing their ability to pursue business opportunities in the public and private marketplace. Through education, advocacy, monitoring, and maintaining relationships, we encourage government agencies and officials to approach their responsibilities without any prejudice. If you’re not at the table, you’re on the menu – and my role is to have a seat for WECA at every table where a decision is being made that could impact our members,” Rex says.

Additionally, Rex maintains that “A fair, competitive, and open construction market is imperative to creating jobs and achieving critical infrastructure and electrification upgrades in a fiscally responsible and timely manner. WECA’s Government Relations will continue to work with all levels of government to level the competitive playing field so merit shop electrical contractors can focus more on their bottom line.”

It’s a plan that Terry Seabury, WECA’s Executive Director and CEO, and I have full confidence in.

Rex will have the time to pick up all the ‘bits and pieces’ of advocacy in three states and Washington; he was the best person for a tough job in a challenging political environment. 

Outside of work, Rex credits a strong support system with his success. “I am also lucky enough to have married recently,” Rex says. “I couldn’t imagine a life without my brilliant, beautiful wife by my side for all the challenges to come. I don’t fear any situation with her on my team.”


Rough Seas Ahead - California’s budget deficit balloons to $68B

Politico reports, “California’s budget deficit has swelled to $68 billion after months of unexpectedly low tax revenues, a shortfall that could prompt the state’s deepest spending cuts since the Great Recession.

The latest deficit figure — calculated by the nonpartisan Legislative Analyst’s Office and released Thursday — far exceeds a $14.3 billion estimate from June. The shortfall threatens to upend the upcoming legislative year by forcing Gov. Gavin Newsom and lawmakers to make spending cuts on a scale that few term-limited elected officials in Sacramento have faced.

‘California Faces a Serious Deficit,’ analysts wrote. ‘While addressing a deficit of this scope will be challenging, the Legislature has a number of options available to do so. In particular, the Legislature has reserves to withdraw, one-time spending to pull back, and alternative approaches for school funding to consider.’

The LAO forecasts a $4 billion drop in the amount of funding the state is required to send to schools and community colleges under Proposition 98, adding education to a list of possible targets for reductions that also includes climate and health care.”

But, the LAO added that lawmakers ‘could reduce’ K-14 funding by $21 billion to mitigate the deficit.

Analysts suggested legislators could alleviate the problem by cutting one-time spending, cutting school funding or tapping into the state's tens of billions of dollars in reserves. Legislative leadership floated drawing from its savings last year, but Newsom opposed the idea and they remained untouched. Debates over whether to use the money will likely intensify next year, given the size of the shortfall.

Analysts also on Thursday forecasted annual $30 billion deficits in future years. The LAO recommended leaving up to half of the state's reserves intact to help mitigate those future shortfalls.

In January, Newsom will release his first budget proposal of the year, setting up negotiations over how to address the financial situation. A smaller deficit last year forced the governor to make the largest cuts of his tenure after years of massive surpluses. The state avoided deeper reductions by delaying spending and shifting money between the state’s general and special funds.

California could offset some cuts by further delaying spending, making some funding conditional on revenue bouncing back, or shifting money to bonds. But there’s already stiff competition for bond money, with mental health on the March ballot and November ballot proposals for education, climate and housing.

The stock market has started to recover, and California’s deficit could shrink if that continues by generating additional capital gains taxes. It would also reflect financial stability among some of the companies the state relies on for revenue.

‘Stock prices are important leading indicators for future #CABudget revenues, and the indicators are up,’ Jason Sisney, budget director for Assembly Speaker Robert Rivas, wrote in a LinkedIn post earlier this week.

Yet whether — and how much — those trends will shrink the state deficit won’t be clear until later next year, when Newsom unveils an updated budget proposal and deficit projections in May.”

David Crane, President of Govern for California, points to decisions made by Governor Newsom and the State Legislature. General Fund Expenditures per capita have climbed 63.9% since Governor Newsom took office, growing at more than twice the annual rate at which those expenditures grew under Governor Brown (10.4% vs. 4.7%). You can read his analysis here.


McCarthy Resignation Sets Off Mad Scramble

CalMatters reports “Former House Speaker Kevin McCarthy’s announcement today that he will vacate his seat and not seek reelection sets off a tidal wave of speculation on who will represent a wide swath of California’s agricultural heartland.”

The announcement's timing also puts McCarthy in a spot to be a political kingmaker if he makes an early endorsement. It’s a role he’s played before and relishes. In announcing his resignation in a Wall Street Journal op-ed, McCarthy reiterated that he will “continue to recruit our country’s best and brightest to run for elected office.”

One thing is virtually certain: McCarthy’s replacement will be a Republican. And one of the names on a possible list of GOP stalwarts is a big one — former Rep. Devin Nunes.” Story


Unfair Labor Practice Charges on the Rise

Unfair labor practice charge filings rose 10%, and union petitions rose 3% for fiscal year 2023, ending Sept. 30, the National Labor Relations Board reported in October. An NLRB spokesperson said that the agency does not break down statistics by industry, so it does not have data specific to construction, but employers and unions can be searched for in their database. A search of “construction” turns up 5,570 results out of 453,517, or about 1%. Story


U.S. Chamber White Paper on "Whole of Government" Union Support The U.S. Chamber of Commerce released a white paper detailing the various elements of the Biden/Harris administration's advocacy for unions. The report examines how President Biden's "whole of government" approach to using the federal government to promote unionization harms workers, employers, and the economy. Read the full report here.


Indicative of the above, Acting Labor Secretary Julie Su Emphasizes Biden’s Support for Unions Acting Labor Secretary Julie Su underlined the White House’s worker-focused efforts at a construction trade event in D.C. “The Biden-Harris administration has your back.” That was Su’s bottom line when she recently addressed attendees at a conference hosted by The Association of Union Constructors. Story


40 Open Seats

·        There are 21 open seats in the State Assembly,

·        Eleven in the State Senate,

·        Seven in the U.S. House of Representatives, and

·        One in the U.S. Senate

See who’s in and who’s out here.