By Kathleen Collins
SMACNA Legislative Consultant
Who’s in Charge
Riding the blue wave, the Democrats increased their majorities in both the House and Senate. The House Democrats gained seven seats to raise their numbers from the bare majority of 50 to 57. The Senate won back three Republican held seats to bump their majority to 28 out of 49 seats. This will mean the Democrats will have sufficient margins to pursue some long desired revenue and policy proposals.
The other change we are seeing is a transition in Democrat leadership. Senate Majority Leader Sharon Nelson from Seattle did not run. Senator Andy Billig from Spokane will be the new Majority Leader. The House will see a major change at the end of the 2019 session. Frank Chopp, the longest serving Speaker of the House, will be stepping down as the House’s Democrat leader, but will continue to serve as a legislator.
The Budget Wish List
The 2019 session is a long session, 105 days, when legislators put together their two-year budgets for operating, capital, and transportation expenditures. The healthy economy has added more money to the state coffers. Legislators can expect to have $50 billion to spend on their 2019 to 2021 operating expenses. This will be the largest revenue amount in the state’s history. There are some new fiscal demands on the budget—collective bargaining contracts, mental health services and facilities, and increasing health care costs. Many Democrat legislators have said they want to reduce some of the state property tax increase that was part of the McCleary education funding agreement in 2017.
What does that mean? Many Democrats are saying $50 billion won’t be enough. We expect the Governor will propose new revenue in his budget. Democrat leaders are already pushing for a capital gains tax to replace some of the property tax dedicated to education. The capital gains tax proposals in the prior session included tax, not only on profits from sale of stocks, but also on profits from the sale of businesses. SMACNA has opposed the capital gains tax for this reason.
Expected Contractor Issues in 2019
We will see a range of issues of interest to SMACNA contractors in the 2019 session. Last year the Legislature passed a law to requiring the use of collective bargaining agreements (CBA) to set the prevailing wage when there are applicable agreements in place. Lacking a CBA, the traditional survey method will be used. The change in law caused steep increases in a few trades triggering complaints from many some public entities. We can may expect to see a bill making some adjustments this session.
On the contracting front, the state employees will run a bill to restrict contracting out. SMACNA is working with other construction groups to exempt construction and service work or to minimize the impact. There will likely be bills to give women and minorities preference in contracting. And Labor and Industries will have a bill to increase bond limits for contractors who have complaints against them.
As part of his climate package the Governor is going to propose a bill to incentivize deep energy efficiency building retrofits. The state would make incentive payments to building owners who upgrade their buildings to energy performance standards set by the Department of Commerce. The energy performance standards would be established by rule for commercial buildings to require energy use intensity targets by building type and would include an energy management plan, maintenance program, and audits. While helpful to many SMACNA contractors, this proposal is likely to meet opposition from building owners. Also the Governor will be proposing a bill to phase out hydrofluorocarbons. It will include almost a million dollars to implement the program.
The issue of condominium liability has discouraged many SMACNA legislators from participating in condominium projects. The desire to have more affordable housing has increased interest in dealing with the problem. Senator Jamie Pederson, Chair of the Senate Law and Justice Committee, held several hearings on the issue this interim. There may be a bill that deals directly with the liability issue. The bill would set the legal standards to those generally accepted at the time of construction. The bill would also specify that the defect has to be more than technical, be significant to a reasonable person, violate construction standards used at the time of construction, and have caused physical damage or a safety risk. ß
SMACNA will keep you updated on legislative issues as they evolve during session. If you have questions, please contact the SMACNA office.
