GOVERNMENT RELATIONS


Funding Issues Dominate Legislative Midterm Results


By Felipe Fuentes, AGC Legislative Advocate


business community given the deep blue results of the 2018 election cycle. With a solid super majority and full control of the constitutional offices of the state, Democrats were expected to struggle in exercising restraint in their governance of the state. Half way through the legislative session, it’s time to see if those worries were truly warranted.


T


The State Budget With a record high budget of


$213.5 billion, Governor Gavin Newsom has wisely cautioned about an inevitable recession. It is estimated that the next downturn could result in a $70 billion hit to California’s general fund – more than double the $27 billion loss of revenues that took place after the “great recession” of 2008. With the national economic


expansion now surpassing 10 years, the governor and legislative leaders are in agreement of fully funding the “rainy day” reserves and buying down over $8 billion in budgetary debts and unfunded pension liabilities. Tat is a good thing. Understanding that 2020 is an


election year for most legislators, Democrats in both houses are looking less for omens of a future recession and focusing more on press-worthy spending ideas. Be it the relaxation of sales tax on feminine products and diapers, or increased tax credits for low wage households, Democratic legis- lators continue to introduce legislation in support of new spending. Time will tell if new spending legislation that makes it to Governor Newsom’s desk will be supported or denied as so often


www.AGC-CA.org


he start of the 2019-20 legis- lative session brought significant concern from the employer and


was the case with former Governor Jerry Brown.


Transportation Funding and Critical Infrastructure


Te passage (and subsequent


protection) of Senate Bill 1 (SB 1) in 2017 was a milestone moment for the construction industry and general contractor community. In particular, the AGC chapters and AGC of America worked in our nation and state capitols to fight for this critical funding for the state transportation system. While a significant step, more work


needs to be done to close the deferred maintenance deficit in our roads and highways. Most notably, the Federal


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© 2019 Trench Shoring Company Associated General Contractors of California 5


Highway Administration has identified California’s need for $70 billion to modernize and fix its highway systems and $118 billion to widen its highways to keep up with growth. Good news: In addition to the


new $5 billion in new funding from SB 1, the 2019 budget promises to include appropriations for construction and rehabilitation of critical state infrastructure. Equally exciting is that these budget proposals include alternative procurement and delivery options for projects. Specifically, there are proposed projects that will be eligible for design-build procurement which include the Department of


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Safely and cost-effectively shore up a range of pipeline or pit excavations up to 35 feet deep, while maintaining required vertical clearances


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