Introduction | Overview | Victories | Setbacks | Looking Ahead | Summary 

From the PresidenT

ABC continued our focus on Government and Labors Affairs (GLA) this past year. Andy Kaplowitz, Vice President of Government Affairs, was hired in February to expand ABC’s grassroots initiatives and is working closely with the Government and Labor Affairs Council aligning with our strategic partners; the Washington Policy Center, Association of Washington Business, the Washington Liability Reform Coalition, and Worker Rights Alliance

Andy has been collaborating with ABC’s lobbyist Cliff Webster with Carney Badley Spellman in Olympia supporting issues that affect our members’ business such as:

- Prevailing Wage
- Project Labor Agreements
- Workers Comp reform
- Free Enterprise
- Labor and Employment
- Tax and Fiscal Policy

As you will see in this legislative update, ABC has endorsed Initiative 1608, which focuses on Government Transparency, we have supported many business-minded candidates and are focused on creating opportunities for members to help us spread the word about merit shop in the construction industry.

 

Wendy Novak, President and CEO, ABC of Western Washington



Introduction

The Merit Shop Philosophy encourages open competition and a free-enterprise approach that awards contracts to the most qualified and lowest bidder, based solely on merit, regardless of labor affiliation.  Merit Shop is neither pro-union nor anti-union. We believe union and open shop workers should be able to work side-by-side to provide the best project for the owner.  Workers should have the right to choose whether to belong to a union, and should be rewarded based on their individual skill and initiative.   It’s simply a way of doing business, built on free enterprise and a level playing field.

There’s no question that merit shop contractors are confronted with significant challenges in Washington State when it comes to bidding, workforce education and development, prevailing wage, and labor relations, not to mention the abundance of labor-friendly laws and regulations that impact Western Washington’s construction economy.  There’s an old saying in government affairs that says “if you don’t have a seat at the table, you’re on the menu.”  Fortunately, ABC of Western Washington members do have a seat at the table, through the efforts of our Government and Labor Affairs Council.  These dedicated members help elevate your collective voice in conversations with lawmakers, regulators, and political candidates. 

In the pages that follow, we’ll share measures of success achieved, even in light of a changing political climate that returned control of the state Senate to labor-friendly interests.  You’ll also learn more about our expanding efforts through grassroots initiatives to strengthen our understanding of what our members’ concerns are, and to line up support for our issues at the local, state, and federal level, now, and in the long-term.

OvervieW

The 2018 Legislative session was a shorter, 59-day session, and as an election year prevents legislators from campaign activities until session has ended, it came as no surprise that Washington’s legislators adjourned in a timely manner.  While shorter legislative sessions are typically less eventful, control of the Washington State Senate returned to the Democrats this year.  What this means is that a number of pent-up labor-friendly legislative issues became law, since Democrats control the Governor’s mansion along with the House and Senate.  For the construction industry, that meant several labor-friendly bills advanced on issues like prevailing wages and mandatory union membership, some with little notice or hearings without allowing balanced testimony.

Victories



We scored a victory the first week of session, when the $4.17 billion capital budget was approved.  The capital budget was supposed to be approved during the 2017 session, but was held up until legislators reached an agreement on how to resolve water rights issues surrounding the State Supreme Court’s Hirst Decision. The compromise allows rural landowners to tap household wells, (more commonly known as permit-exempt wells,) while newly formed local committees come up with longer-term mitigation plans for individual watershed.  Once this was achieved, the capital budget, which supports hundreds of construction projects and about 19,000 construction industry jobs, was approved.  ABC, through our participation on the Washington Construction Industry Council and AWB membership, helped legislators reach consensus.

Some victories are defined by what doesn’t advance, and in 2018, ABC, the WCIC (Washington Construction Industry Council), and other business organizations stood firm and defeated Governor Inslee’s proposed Carbon Tax (2SSB 6203), a flawed approach to B&O Tax reform (HB 2940), a bill regarding construction defect claims (HB 2475), another proposed Capital Gains tax bill (HB 2967), and long-range planning fees (HB 2599). Through our involvement with the WCIC, we lobbied successfully for removal of detrimental provisions within SSB 6126 (trade apprenticeships.)

Our work on SSHB 1851 demonstrates the power of mobilizing our membership to protect our industry from bad legislation.  This bill would have made it harder for public agencies to contract out services and would have put the power to determine whether outsourcing was more cost-effective in the hands of the very state employees who would have been affected by outsourcing.  Placing this responsibility in the hands of any self-interested group is unfair, and can lead to mistrust and conflict.

In 2017, this bill passed the House on a 50-48 vote along party lines and moved to the Senate, where a public hearing was held and no vote was taken.  This reflects how important it is to hold a majority in at least one Legislative chamber, something we hope to accomplish with November’s elections.

However, with Democrats in control of both the House and the Senate this year, the bill was expected to advance.  Senator Mark Miloscia (R-Federal Way,) a friend to ABC, was prepared to offer an amendment from the Senate floor that would have removed construction, architecture and engineering from the effects of the bill.  Once the unions saw that the amendment would succeed, they quit pushing for the bill, and we were ultimately successful in defeating the bill altogether.  

Setbacks

 

With Democrats in control of both chambers of the legislature and the Executive Branch, a number of union-friendly bills were enacted into law, including SB 5493, which established the prevailing wage based on collective bargaining agreements or other methods if collective bargaining agreements are not in place. This includes segments of the construction economy where unions don’t participate, such as affordable and public housing.  This change effectively raises the prevailing wage for journeyman workers from about $29/hour to over $42/hour, presenting a big problem, not just for the few contractors in this sector, but for non-profit housing organizations, who can ill-afford such a dramatic increase in costs.  Passage of this legislation, which is scheduled to be implemented in August, will have an adverse impact on the cost of affordable housing, significantly compromising the ability for non-profits in this sector to provide housing for those most in need. 

This bill is an example of the Law of Unforeseen Consequences – open shops didn’t recognize the impact of this provision, and we’ve since learned that labor is working behind the scenes to funnel these projects their way by encouraging restrictions in construction methods.  ABC of Western Washington is leading the effort to address this issue with regulators, and we’re evaluating our options to enact a permanent fix in next year’s legislative session that would preserve this market segment for open shops.

While Governor Inslee’s repeated efforts to implement a carbon tax failed once again, this victory doesn’t signal the end to this debate, as efforts are underway to place an initiative on November’s ballot to create an extra-governmental effort to reduce carbon. ABC has grave concerns about this proposed solution (see attached,) as it provides minimal representation from the business community and operates  without Legislative oversight.  We prefer a bipartisan solution within current governmental parameters, and while we won the battle again, Washingtonians face a significant decision with I-1631. 

Looking Ahead

While ABC didn’t take a position on ESB 5450 (Concerning the use of mass timber for building construction,) Washington’s legislature joined BC, Oregon, and this bill passed, which means the state Building Codes Council will prepare rules to allow cross-laminated timber to be used in residential and commercial construction.  While some members believe there are better products being developed, approval represents an advance for the industry, and adds to the options to build affordable, reliable residential and commercial projects, and likely paves the way for adoption of other innovative construction products and techniques.

The upcoming election presents an opportunity for Republicans to regain control of either or both houses of the State Legislature, which would re-establish a bi-partisan political climate, and hopefully lead to more centrist policymaking.  

There are many strong candidates from both major parties, and we’ve included a list of candidates we endorse in the pages that follow.  Visit www.leg.wa.gov to find out in which legislative district you live, and which district your place of employment resides.  We encourage our members to exercise the right to vote, and to openly support the candidate of your choice.  We hope you’ll give serious consideration to supporting ABC’s slate of endorsed candidates, as identified by your Government and Labor Affairs Council with the assistance of ABC’s lobbyist Cliff Webster.  When you donate or volunteer, be sure to let the candidate know that ABC’s endorsement impacted your decision to support!

Another promising development was the emergence of Initiative 1608 (Concerning Government Transparency.)  This initiative would make negotiations between elected officials and public unions a matter of public record, and would create a library archive of prior negotiations.  This would restore a system that discourages back-room deals where significant expenditure of public funds is concerned.  Given the full-slate of initiatives being floated for the upcoming election, the decision to redirect this effort was made recently, and we expect the idea to resurface, possibly as soon as the next legislative session, depending upon the composition of Washington’s Legislature following November’s elections.

There’s an unusually high degree of interest in the mid-term election on both sides of the aisle, and ABC encourages our members to research the issues and candidate, share with your friends and associates, and, of course, VOTE! 

Summary



Another popular political saying is “Get into Politics, or Get Out of Business!”  Decisions are made at every level of government on a daily basis that impact our members’ bottom line, from municipal and county government, to Ports, the State, and Federally.  ABC of Western Washington brings our members’ voice to Olympia, working to advance the issues that matter to you.  Our effort is only as strong as our members’ engagement on the issues, and we need your help: share your issues with the Government and Labor Affairs Council.  Get involved, and start small: Are you willing to testify before City Council or the Legislature?  Let us know!  Participate on the GLA, especially if you own your business, or plan to own a business someday.  Is there something that you’re passionate about?  An issue that drives you up the wall?  A regulation or a tax policy issue?  It all starts with letting us know what’s keeping you up at night.  When we know where your pain is, we can bring the fight to change to your community, your district, your legislator.  There are so many ways you can help us make a difference.  Tell us what’s on your mind - we’re listening!

 

Andy Kaplowitz, Vice President of Government Affairs, ABC of Western Washington

Thank you to our current GLA Council members, whose passion for issues that impact all of Washington State’s ABC members is the catalyst for our current results and the promise of better outcomes tomorrow:

ABC GLA Council Members: 
GLA Chair Josh Griesse of Washington Commercial Painters
Bryan Cordes, Crystal Soda Blast
Ryan Haggard, Haggard Electrical Contractors
Travis Hull, Mechanical & Control Services
Clarke Jewell, Olympian Precast
Terry Marston, Marston Legal, PLLC
Pedro Martinez, AM Exteriors
John Merrill, Mechanical & Control Services
Mike Schultis, SSI Construction
Matt Stewart, Synergy Construction, Inc.
Mark VanWell, VanWell Masonry
Jason Wandler, Oles Morrison Rinker & Baker, LLP.
Toni Walker, AM Exteriors 

ABC Staff: 
Wendy Novak, President and CEO, ABC of Western Washington
Andy Kaplowitz, Vice President of Government Affairs, ABC of Western Washington
Gay Hutchins, ABC of Western Washington

Suzanne Schmidt, President and CEO, ABC Inland Pacific Chapter

Leadership PAC donations:

Senate Republican Campaign Committee
House Republican Organizing Committee
The Reagan Fund (House Republicans)
The Leadership Council (Senate Republicans)
Washington State Republican Party