As President Obama once said, “elections have consequences,” and this last one certainly will as the Orange County business community can expect changes at all levels of government. OCBC’s government affairs team has assessed the playing field for 2017 and has a few predictions, including insights to the challenges and opportunities, from city hall to the White House. OC’s cities and local government agencies will remain fairly steady in 2017, but also with notable shifts. Anaheim will add two council seats —from four to six — resulting in new city council districts, rather than at large city council representation—plus a directly elected mayor. Several OC cities, including Anaheim, have seen power shifts in council majorities that could significantly alter their policy priorities. Other issues that will face local governments — particularly with the passage of new sales tax measures in Westminster, Fountain Valley and La Palma — include pressure to raise taxes to fund pension costs. Further stress on housing and commercial development will result from ballot box zoning initiatives percolating through the county. Some good news: finally an opportunity to improve south county mobility by with a new process for an alternative alignment to connect SR-241 to I-5. This is a tremendous opportunity, made possible only by the landmark settlement agreement reached by TCA and the environmental coalition ending a decade’s long legal battle. Lucy Dunn and Board Member Mike Kraman were at the center of negotiations to clear a path towards finding a new solution for the highway. 2017 will be a very busy year for OCBC’s Government Affairs team but we are up to the task.
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Following the outcome of the 2016 election, both houses of the California legislature are dominated by two-thirds majorities as Democrats picked up several seats in the Assembly and one key seat in the Senate. The key race in the Senate capturing a majority of the attention was the 29th District, which is largely anchored in Orange County. Republican Assemblywoman Ling Ling Chang lost to Democratic newcomer Josh Newman. The victory gives Democrats 27 seats and control of two-thirds of the 40 seats in the Senate. Assembly Democrats have 54 seats – enough for them to approve tax increases, suspend legislative rules, pass emergency legislation or overturn the governor’s vetoes without any support from Republicans. This is the second time Democrats have achieved a “super-majority” in the last four years. Historically, many aggressive bills from the left were tamped down by more moderate Democrats siding with Republican lawmakers and business interests. For instance, several attempts to raise taxes tighten regulations on business failed in the 2013 Assembly in spite of the super-majority.
This year the legislature will likely revisit several key priorities they were unable to achieve last year. Priorities like a robust transportation funding package that will likely include tax hikes at the pump, a funding package for housing, and potentially more bills on climate change.
The business community is hopeful that the moderates in the legislature continue to consider the importance of balance between the environment and the economy. To that end, OCBC will continue working on legislative priorities including transportation funding, permanent funding for housing, education, and improving CEQA.
At the federal level, congressional leaders and the President-elect have already pointed to several key priorities that will directly affect the OC business community, including the Affordable Care Act or “Obama Care,” as House Republicans have voted numerous times to repeal or defund it. This was done largely for political reasons and Republican leadership is acutely aware of the harmful impact that a wholesale repeal of Obama Care would have on Americans. It is likely that Congress and the new president will move thoughtfully to amend Obama Care rather than simply deleting it. The business community will have a strong voice in what moves forward and OCBC will certainly be part of the discussion.
Next, while Donald Trump has vowed to drastically alter the U.S.’s direction on climate and energy, California’s regulations are more stringent in most cases, and so it is unlikely these actions and steps will have a large impact on local business practices.
Trade was a big issue in the election and the President-elect was particularly outspoken on the issue. There is growing fear that the Trump Administration will take aim at the Export-Import Bank (Ex-Im Bank). OCBC is a strong supporter of Ex-Im Bank as many local businesses rely on it for their existence. There is also a possibility that Canada, Mexico, and the United States will begin negotiations to revamp the North American Free Trade Agreement (NAFTA), although many experts have opined that opening NAFTA would not necessarily benefit US interests.
In the short run, we expect the first weeks of the Trump Administration will focus on quick action to reverse many of the Obama Administration’s executive orders. Priorities likely include approving the Keystone XL pipeline, reversing Clean Air Act rules, and striking down the increased minimum wage for federal contractors. Finally tax reform and immigration will be a major topic of discussion in Washington DC.
For more information, contact Bryan Starr, Sr. Vice President, Government Affairs.