AGC Members Make Voices Heard in Sacramento

AGC Members Make Voices Heard in Sacramento

By: Carol Eaton

2012-07-03

A high profile lineup of legislative, governmental and business leaders offered their views and fielded questions on issues ranging from pension reform, redistricting and the budget process to the latest on high speed rail among other things during the Associated General Contractors annual Legislative Day in Sacramento on June 19, 2012.

More than 60 contractor and associate members from AGC of California and AGC San Diego gathered at the headquarters of the California Chamber of Commerce for a variety of presentations, then headed over to the capital that afternoon to visit with their local legislators and educate them on industry issues and concerns.

During the morning sessions, members heard from the Democratic and Republican leaders of the Senate, Darrell Steinberg and Bob Huff; Cal/Chamber President Allan Zaremberg and consultants Steve Glazer and Rob Stutzman; Acting Secretary of the Business, Transportation & Housing Agency Brian Kelly; and Insurance Commissioner Dave Jones.

Senate Leaders Exchange Views

The AGC Legislative Day kicked off with addresses from two of the state’s top Legislative leaders representing markedly different sides of the aisle: President pro Tempore of the Senate, Darrell Steinberg, and Senate Republican Leader Bob Huff.

Senator Steinberg focused his presentation on what he described as his “most important cause”: workforce development and education issues. Noting that “right now, there is a complete disconnect between public education and the economy,” he outlined his current bill, SB 1458, which is designed to reduce the role standardized test scores play in ranking of California’s academic performance index for high schools. The bill would elevate the degree to which college and career readiness programs play in ranking schools instead.

During his address, Senator Huff tackled the topic of the state budget negotiations, sharing his perspective that creating jobs is the best way to bring new revenue to the state budget. “When you create jobs, you have more wealth flowing into the state treasury without having to go after those who are creating the wealth,” he noted. “We currently give reverse incentives for people to go away from this state at the same time we’re trying to balance our budget.”

In a question and answer period with AGC members, the democratic and republican leaders fielded questions on a variety of issues ranging from project labor agreements to pension reform. Steinberg asserted that by the end of this legislative session “we will deliver” concrete pension reform that he said would be based on the 12 principals the governor has put forth.

“There is some detailed discussion to be had, but the test for us in the majority party is whether we deliver pension reform by the end of the session,” Steinberg said. “I’d like to get it done by the summer recess. If we don’t, I think it makes it that much more difficult to pass a tax measure.” The Democratic budget is contingent on voters’ passage of their tax package in November; failing that, draconian cuts to a variety of services will be triggered.

Senator Huff, who has worked closely with Gov. Jerry Brown to craft the current pension reform package, commented, “When you have on the conservative side an estimate of $100 billion to on the higher side $550 billion unfunded liability over the next 20 years, it’s clear we have to do something. When it comes down to what that is, it starts falling apart.”

Regarding the budget, the two Senators pointed out the huge partisan divide that now separates the democratic and republican approaches. Given that the budget can now be passed on a simple majority budget, and democrats in the senate now hold that majority, Huff noted that this year’s budget has not included Republican support.

BT&H Reform, Transportation Agenda

During the morning addresses, AGC members also heard from Brian Kelly, Acting Director of the California Business, Transportation & Housing Agency (BT&H). Kelly outlined the details of the Governor’s Reorganization Plan, slated to go into effect as of July 2, 2012 and then fully rolled out within a year. The plan will create a single, cabinet level California Transportation Agency (CTA) focused solely on transportation policy, moving transportation out of the Business, Transportation and Housing Agency which will be renamed Business, Consumer Services and Housing Agency. AGC has strongly supported the plan that will take the seven transportation related departments, including Caltrans, and put them under one agency whose secretary is directly accountable to the governor.

Among other issues at his agency, Kelly also described an effort currently underway by his office to offer up a “suite of policy options” to the governor’s office regarding transportation challenges and potential solutions based on a number of stakeholder meetings they currently are conducting. The overriding challenge as always is funding, given that Proposition 1B bond funds as well as federal American Recover & Reinvestment Act (ARRA) funds either have already or will soon run out.

While the gas tax swap has helped to stabilize funding to some extent, Kelly noted, “Like everything else I think partisanship has gotten its hold on transportation financing. It’s gotten hard to get to [building] a coalition around a financing package and program that can get bipartisan support.” Kelly told the construction industry representatives, “That is an interaction that you all can help thread together.”

In terms of major infrastructure projects the high speed rail system, now estimated at $68.4 billion in cost, and the Bay Delta Conservation Plan are the two leading projects that Kelly said the administration would like to move forward, but he acknowledged the uphill battle they both face on the political front as well as from a funding perspective. “I’m hopeful that we’ll see the legislature agree and that we can move forward with the high speed rail project,” he commented. “Going forward, I’d like to engage in talking to folks on what it means to our economy and job creation, which is not a partisan issue, and see if we can’t get a suite of projects that can cut through some of that divide.” He noted that high speed rail will inevitably be a P3 project that must bring in private funds in some way in order to be accomplished.

When asked about what role public-private partnerships will play in building California’s infrastructure in the future, Kelly said he did not see it as the single solution but added “I think we need all the tools in the toolbox.” He noted there is interest in reviving the currently dormant Public Infrastructure Advisory Commission (PIAC) that had been created to provide advisory oversight on potential P3 projects. “We’re looking at how to bring it back and make it relevant, and how it can best advise us and the legislature on options going forward,” he said. “To me this is part of a broader view of the different tools we need to use to meet our objectives.”

Business, Insurance Leaders Address Attendees

California Chamber of Commerce (CalChamber) President and CEO Allan Zaremberg, accompanied by Steve Glazer and Rob Stutzman, Democratic and Republican campaign consultant, respectively, also spoke to AGC members about the upcoming November election, outlining the work of JobsPAC, of which AGC is a contributor. The stressed the importance of supporting moderates from both parties in the upcoming elections.

The keynote luncheon speaker, Insurance Commissioner Dave Jones, addressed the group on a range of business and insurance issues, focusing heavily on medical insurance costs and workers’ compensation issues. Pointing to the skyrocketing cost of health insurance that he said has increased some 153 percent over the last eight years in terms of cost to employers, Jones asked for support for a measure that will be on the November ballot that would give the insurance commissioner the authority to reject excessive rate hikes of health insurance and HMOs. That measure would offer the commissioner regulatory power similar to that which it currently has regulating rate hikes for other lines of insurance such as home, auto and property, among others.

“Right now businesses are on the short end of the stick,” Jones said. “You don’t truly have bargaining power with health insurers and HMOs. I think businesses would be better served by allowing, somewhere, the authority to say rates are too high.”

Jones also discussed the current state of workers’ compensation insurance and some of the major issues that are cropping up in the area, including increased utilization costs – stemming from the increase in office visits to treat some injured workers – as well as growth in medical liens by health care providers. He encouraged the contractor audience to support a bill by Senator Ted Lieu aimed at dramatically reducing the utilization of liens, which he pointed out can drive up workers’ comp costs by forcing workers’ comp providers to carry often unsubstantiated liens on their books and collect increased premiums to cover them.

Member Visits with Elected Officials

Following the informative series of presentations in the morning, AGC members headed over to the capital the afternoon of June 19 for scheduled visits with nearly 30 legislators representing virtually all districts throughout the state. During those visits, members provided information of the current business climate for the construction industry in California and the impact it is having on their businesses. They also discussed the need for infrastructure investment in the state and the role the construction industry plays in creating needed jobs through construction projects, and highlighted the efforts that AGC is taking in educating and development the construction workforce to meet future needs.

The day wrapped up with reception at Esquire Grill, which included a drop-in by Governor Jerry Brown.

For more information on AGC’s Legislative program or on ongoing grassroots legislative efforts underway by AGC of California throughout the year, contact John Hakel, Vice President of Government Relations, at (626) 608-5800.