In this episode, Eric Wareham VP of Government Affairs for WEDA discusses the legislative landscape amid COVID-19 and issues that may face dealers as state budgets waver. He also discusses Right to Repair which continues to pop up amongst some state legislators.
Sponsored by: West Texas National Bank
Executive Orders
For proponents of federalism, the last ten weeks have been noteworthy. The rise of the role of state governments during the coronavirus crisis has been substantial as state governments, not the federal government, still holds most policing power over the health, safety and welfare of their citizens. The increase is state government activity is quantifiable-nearly 2,000 emergency orders, proclamations and directives have been issued related to COVID-19.
In the current phase of this crisis, Governors are grappling with how best to reopen their economies while balancing the health and safety of employees and the general public. There is wide variation on this front as some states have nearly completely reopened without many strings attached, while others are requiring strict adherence to face mask and social distancing requirements. WEDA is staying on top of these orders and advocating for dealers throughout the process. Early on, we had great success in designating dealerships as essential businesses to keep dealers open. We’ve also had meaningful input in the legislative process that resulted in Washington State allowing construction projects to resume ahead of schedule, and are working with Oregon and Washington regulators on creating workable rules for equipment dealerships and their staff.
If you are experiencing any issues with these regulations, contact the association for help in navigating these complex issues. As we continue to weave our way through this crisis, there will be many more orders and regulations to come and WEDA will be here to monitor them and keep you apprised of the latest changes.
State Budgets
Warren Buffet recently said something along the lines of the federal government will never default on its debt because it issues debt in its own currency and the federal government can always print more money. That may be true for the federal government, however state governments play by different rules. Nearly every state has a balanced budget requirement, which prohibits taking on significant debt. This is problematic given that recent data shows there is a 20 percent decline on average nationally in state sales tax, user fees and other revenue.
Because of COVID-19, twenty-two states adjourned early without approving a 2021 budget. With state fiscal years starting on July 1st combined with declining revenue, many states are now in special sessions trying to figure out what to do.
In a crunch like this, legislators typically turn over every stone looking for ways to increase revenue. One major concern for dealers is the rise of discussion about repealing exemptions such as the farm equipment sales tax exemption. We are closely watching these special sessions to make sure that legislators do not make bad decisions because of expediency and understand the consequences if they do. In recent years we have seen these sales tax exemptions under threat and have killed multiple bills that attempted to repeal them. During this time of crisis when it may seem enticing to grab that money, we are reminding legislators of why they already shot down these bad policies. We will keep you informed of the status of these special sessions and if any action is needed to protect our industry.
Federal Action
Throughout the crisis, WEDA has kept you informed about the several pieces of legislation Congress has passed in response to COVID-19, including our webinar on the CARES Act. We are now seeing a possible phase IV of relief legislation coming down the pipe.
The House has already passed a $3.5 trillion dollar package that Senate leadership has described as a liberal wish list, indicating that the chances of that legislation moving forward as is was remote. However, Senate Republicans have recently stated their support for a next round of direct payments in a phase IV relief package. Election politics are certainly playing into these discussions as the presidential election looms a little more than three months from now. It seems that neither side of the aisle wants to be blamed for leaving people high and dry, so it is likely that some form of additional relief legislation will be passed in the near future with the Senate expected to start discussions after the July 4th recess.
On another front, despite seeming unlikely given all the congressional spending during the crisis, an infrastructure bill is making its way through Congress with bi-partisan support. Democrats and Republicans see it as a means to stimulate the economy while making overdue repairs and improvements to our nation’s infrastructure. The House is expected to vote on a package before July 4th and the Senate is working on a companion bill that is in the committee process.
Typically in an election year, Congress is expected to do very little besides campaign for re-election. The current crisis seems to be breaking tradition with legislation moving at a breakneck pace. WEDA is staying on top of it all and we will be reporting to you on the major developments as they happen.
Right to Repair Roundup
With everything else happening, it’s hard to remember that three short months ago we were battling Right to Repair legislation on multiple fronts across the country. The Coronavirus brought all that to a stop as legislatures adjourned and tabled many policy discussions mid-sentence. There are just a few updates to share, though.
Proponents of Right to Repair have been trying to capitalize on COVID-19 by focusing on ventilator repairs and have attempted, but failed, to try and tie the repair discussions back to farm equipment. Legislators are seeing through this. Representative Love of Missouri recently wrote an op-ed about his support for equipment dealerships and the pitfalls of Right to Repair legislation, which came about because of dealer meetings with the representative during legislative sessions this year.
Another quick note is related to elections and Right to Repair. In Idaho, Representative Raybould, who sponsored the Right to Repair bill in that state, lost her primary election and will not be returning to the Capitol. Without her pushing the legislation forward, it seems unlikely there will be any Republican support for Right to Repair legislation.
And finally in Oklahoma, Representative Phillips, who sponsored Right to Repair legislation this year, has three primary opponents and is expected to be defeated in the June 30th election. We will keep you updated on the results of that race.
Podcast Host Eric Wareham
