By Tom Ichniowski, Pam Hunter McFarland and Debra K. Rubin, with Jim Parsons, JT Long, Mary B. Powers and Erin Richey

Washington and the nation saw red—more than expected—across the electoral map with Republican Donald Trump’s Nov. 8 squeaker win of the presidency over Democrat Hillary Clinton in a tight race to the end, and with the GOP managing to keep control of the U.S. Senate and House of Representatives.

As the construction industry digests Trump’s surprising victory, they expect the new administration’s regulatory policy to tilt strongly toward business interests’ point of view. In particualr, industry officials foresee a pullback on environmental and workplace-related rules.

Another construction industry focus will be Trump’s proposals for a sizable increase in infrastructure investment. Just how large an increase—and the type of projects the plan will include—are unclear, however.

During the campaign, Trump called for a $1-trillion, 10-year infrastructure plan in his first 100 days in office. But a post-election posting on his transition web page cites a $550-billion program. Robert Murray, Dodge Data & Analytics vice president for economic affairs, suggests that the lower figure may reflect a shortening of the the time period to five years, from 10. The Trump transition’s new statement also refers only to transportation infrastructure.

In his post-election speech early on Nov. 9 Trump cast a broader infrastructure net. He said, according to a CNN-provided text, “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.”

The prospect of boosted infrastructure investment in the new administration sent some E&C sector firm stocks higher on Nov. 9, according to the Seeking Alpha website—including Caterpillar, which rose 7.7%; Jacobs Engineering, up 9.8%; Fluor, rising 10.1%; and AECOM, which went up 12.6%.

In a Nov. 9 note, Andrew Wittmann, lead construction industry analyst for investment firm Robert W. Baird Inc., said he was “incrementally positive on E&C sector post-presidential election though not rushing in.” Wittmann was optimistic about oil-and-gas sector construction with “a potentially more-accommodating” Federal Energy Regulatory Commission and little, if any, use of “development-restricting Executive orders.” But he cautioned that cross-border projects “could be potentially curtailed under a more protectionist Trump administration” and that a “broader reigning in” of environmental regulation could hurt certain industry niches. Reduced federal backing also could negatively impact alternative energy sector work, he said.

Steve Hall, American Council of Engineering Companies vice president for government affairs, notes that Trump and Clinton had infrastructure on their agendas. “It’s the thing that is the consensus item between both parties,” Hall says. “With tighter margins in Congress, this may be one of the few consensus issues that they can actually make progress on.”

Steve Sandherr, Associated General Contractors of America CEO, said via email that “we are eager to work with the executive and legislative branch to advance new infrastructure investments and identify and put in place sustainable, long-term and reliable ways to pay for them.”

The American Association of State Highway and Transportation Officials would like to see the envisioned infrastructure proposal include a revenue “fix” for the income-challenged Highway Trust Fund, says Jim Tymon, chief operating officer. But Tymon said in a Nov. 9 press call, “The speed bumps you may encounter [from conservative lawmakers] are whether or not a package is offset or paid for.” He adds, “I think you’ll find a lot of bipartisan dance partners. per se, but finding a way to come up with a bipartisan offset or a bipartisan way to pay for it is going to be more of the challenge, I think.”

Says one contractor executive: Trump “says the right things, but will he follow through?”

Some see the possibility of tax-reform legislation as a vehicle for a Highway Trust Fund solution. The National Electrical Contractors Association also would like to see a comprehensive tax measure include other provisions, says Marco Giamberardino, executive director for government affairs. He says NECA members favor repealing the estate tax and also are seeking “parity” in the tax rates that corporations pay and the rates paid by firms organized as “pass-through” entities, such as S corporations or partnerships.

Status Quo in Congress

The Capitol Hill balance of power will be largely status quo. Republicans maintained control of the House and the Senate—though, in both cases, with slightly diminished margins.

While Republicans clearly had a big day on Nov. 8, their sway over federal policies and legislation will not be absolute, because they lack the 60 votes in the Senate needed to ensure that legislation, and presidential nominees, won’t be blocked by filibusters.

According to the Associated Press, as of the morning of Nov. 10, Republicans held 51 Senate seats and Democrats 48, including two Independents who caucus with them. A race in Louisiana will be decided in a runoff. That compares with a 54-46 Republican-Democratic (and Independents) split now.

Democrats picked up two U.S. Senate seats. In Illinois, Rep. Tammy Duckworth (D) defeated incumbent Mark Kirk (R) and in New Hanpshire, Gov. Maggie Hassan (D) defeated Sen. Kelly Ayotte (R). In Nevada, Democrat Catherine Cortez Masto (D-Nev.) won the seat being vacated by retiring Minority Leader Harry Reid.

But several other Republicans won in races rated as toss-ups, including Sens. Roy Blunt (Mo.) Richard Burr (N.C), Ron Johnson (Wis.); and Pat Toomey (Pa.). Another GOP winner was Sen. Marco Rubio (R-Fla.) who bested challenger Rep. Patrick Murphy (D), the son of the chairman of Miami-based Coastal Construction.

The House will have 239 Republicans and 193 Democrats, according to AP as of early Nov. 10, compared with a 246-186 breakdown now, plus two vacant seats. In Florida, Murphy’s former House seat representing North Palm Beach County and the Treasure coast was won by Republican candidate Brian Mast. Also in Florida, Francis Rooney, chairman of construction firm Rooney Holdings, Naples, Fla., won his race for a U.S. House seat as a Republican.

War on regulation?

Industry executives also are looking for Trump to make changes in Obama administration regulations. ACEC’s Hall points to the so-called “blacklisting” rule, which requires federal contractors to verify their compliance with workplace-related statutes in order to qualify for federal work. He also mentions a Fair Labor Standards Act rule revising the pay levels at which employers must pay overtime. Trump’s election, he says, “has to bolster our efforts at revisiting these rules and scaling them back to a fairly significant degree.”

AGC’s Sandherr said voters sent a message: “They are tired of tax and regulatory policies that discourage job creation.”

Group spokesman Brian Turmail said the group wants to see action on regulations mandating project labor agreements and paid sick leave. He said it also favors replacing the Occupational Safety and Health Administration’s silica-dust regulation “with a new rule that actually improves workplace health and safety instead of setting unattainable goals.”

Senate Majority Leader Mitch McConnell (R-Ky ) also wants to see some Obama administration rules and presidential executive orders done away with. He told reporters on Nov. 9 that Republicans would work with Trump administration officials “and see what kind of unilateral action he can take to undo some of this regulatory overreach which has slowed the economy so much.”

AGC also is seeking “significant changes, if not repeal” of the the Affordable Care Act. Turmail added that AGC member firms see increasing costs of health care as “the second-greatest threat…to their long-term vitality, after only tightening margins.” McConnell said repealing the health-care law is “a pretty high item on our agenda” and added, “The sooner we can go in a different direction, the better.”

The mood was glum at a Nov. 9 press briefing by environmental groups. Leaders from the League of Conservation Voters, the Natural Resources Defense Council, and other organizations expressed deep disappointment in the election’s outcome. All of the groups at the briefing had tried to mobilize support for Clinton and pro-environmental House and Senate candidates.

The environmental officials said they were determined to challenge any efforts to roll back environmental protections. They will do this on a variety of fronts, from court challenges to legislative advocacy to grassroots activities. Michael Brune, executive director of the Sierra Club, said, “We will not be in a defensive crouch over the next four years.”

The advocates said that Trump’s close win was not a mandate to reverse course on climate change. Some state governors, for example, have said that they support the Clean Power Plan (CPP), a key element of the Obama’s administration’s efforts to curb greenhouse gas emissions from powerplants, said David Goldston, NRDC’s director of government affairs.

Brune said that during the Bush administration, the Sierra Club was able to stall or halt 184 coal plant projects.

Additionally, the progress that is being made in the electric sector under the CPP is on a trajectory that is irreversible, Brune said. “We don’t think a Trump administration will be able to reverse the progress that we’ve made,” he said.

Lame-duck session on the horizon

Construction lobbyists also will focus on the coming lame-duck session. The must-pass legislation is an appropriations measure to fund most federal agencies beyond Dec. 9, when a current stopgap expires. McConnell said he wanted to complete a spending measure by the end of December that would extend through the rest of fiscal year 2017, which ends next Sept. 30.

That coming legislation won’t include military construction and Dept. of Veterans Affairs programs, which won full-year fiscal 2017 funding in a bill enacted on Sept. 29.

Many construction, waterways and port officials—and at least some key congressional lawmakers—also would like to see a new Water Resources Development Act approved before the current Congress ends. The Senate and House have approved differing WRDA versions but those differences have not yet been reconciled. That WRDA measure would authorize at least several billion dollars for new Corps of Engineers flood control, dredging and other projects. It may also include drinking-water and wastewater-treatment funds.

Bond and Ballot Issues: Win Some, Lose Some

Construction participants also watched outcomes of ballot questions that could green-light new project spending and govern how firms and others do business, in many cases.

Not all items gained voter support, but some won big.

California voters clearly spoke up for education in approving the $9-Billion Proposition 51, which allows the state to sell $9 billion in general obligation bonds for new and upgraded school facilities. It is the first school construction bond measure on the state’s ballot since 2006, placed there by a coalition of builders.

In fast-growing Colorado, where a record $4-billion total of school bond money was up for decision, voters split on two of the largest totals. Denver residents overwhelmingly approved, by a 65% to 35% vote, a $628-million tax package for new construction and upgrades. But Jefferson County voters rejected a $568-million spending initiative by about 54% to 46%.

California voters also narrowly rejected, by 51-49%, Proposition 53—the so-called “No Blank Check” initiative that required statewide voter approval for revenue bonds above $2 billion on a state-owned or managed project. The measure was largely funded by a Central Valley landowner opposed to a proposed $15-billion delta tunnel, known as the California Water Fix, and could have complicated financing for the state’s high-speed rail project.

The largest transportation improvement measure in the state, the $120-billion Measure M in Los Angeles was headed for passage, 68% to 32%. The Los Angeles County Traffic Improvement Plan is a half-cent sales tax countywide with no sunset clause. It would fund a rail tunnel through the Sepulveda Pass and a subway extension to Santa Monica.

Voters on both sides of San Francisco Bay approved a bond measure for $3.5 billion to upgrade aging core components of the region’s BART transit infrastructure. The package will address more than 90 miles of track, water-damaged tunnels and the system’s nearly half-century old train control system, all of which have contributed to increased service disruptions and other operational issues.

Although critics contend that BART’s woes are due at least in part to the agency’s prioritizing system expansion over maintenance, a 30-year, half-cent sales tax increase approved in Santa Clara County will help fund a proposed extension to downtown San Jose. Area freeways will also benefit from the measures expected $6 billion in additional tax revenue.

But Sacramento’s $3.6 billion road and transit proposal fell short by just over 1% of the needed vote, while opponents of the San Diego Council of Governments’ failed $18 billion public transit and freeway program faulted the plan’s emphasis on transit, with only $2.6 billion earmarked for freeways and car pool lanes. Environmental groups were split on the proposal, with opponents claiming the plan didn’t do enough to promote alternative mobility modes such as trolleys, busses and bicycles.

Also defeated in San Diego were two proposals to boost its hotel room tax, which would have directed up to $1.8 billion toward a new convention center and football stadium. Owners of the city’s NFL team consider public funding essential for a new facility to prevent relocation to another city.

Washington state voters favored the $54-billion Sound Transit Proposition 1 with a 55% approval rating to expand light rail and bus operations, but they strongly rejected Initiative 732 by a margin of 59-41%. The measure would have imposed the nation’s first carbon emission tax on the sale or use of certain fossil fuels and fossil-fuel-generated electricity, with the amount increasing gradually to $100 per metric ton and being used to offset sales taxes.

Nearly 60% of Austin, Texas, voters said yes to issuing $720 million in transportation bonds—the largest such measure approved in city history. Funded by an increase in the property tax, the bonds will relieve congestion along nine major corridors through major street and traffic control upgrades.

Wake County, N.C., voters approved a 10-year, half-cent sales tax increase to provide $2.3 billion for commuter rail and bus rapid transit systems that proponents say will help relieve road congestion across Raleigh’s fast-growing suburbs. The 2016 referendum had the support of area business and transportation alliances, unlike similar proposals that emphasized light rail.

But work under way on a light rail line between Norfolk and Virginia Beach, Va., shut down on Nov. 9 after voters overwhelmingly rejected $155 million in state funding.

A constitutional amendment in Illinois for a transportation tax “lockbox” to insure monies are spent exclusively on transportation projects gained overwhelming voter support, while In New Jersey, Question 2, which also would dedicate gas tax revenue to state road and rail projects, won 54% of the vote. Proponents were optimistic of a win after a three-month standoff over transportation funding this summer shut all state road and rail projects until early October when a 23 cent-per-gal fuel tax deal was reached. But some observers thought backlash over the increase might have defeated the measure.

In Louisiana, voters approved an amendment to the state constitution for a trust fund of higher-than-expected tax revenue from corporations and oil and gas operations. At the $5 billion threshold, the fund could be tapped for infrastructure and other capital projects if okayed by two-thirds of state legislators.

Colorado voters resoundingly defeated in an 80-20 split, Amendment 69, called ColoradoCares, which would have created the first state-run, single-payer health-care system in the U.S. Funded largely through payroll and income taxes, proponents say it would have provided universal care for residents and save on costs. But opponents, including many in the construction sector, cited its cost—between $25 billion and $36 billion. But voters agreed to a minimum wage increase, with a 55-45% split.

Alabama voters have approved enshrining the state’s right to work law in its constitution. The Associated Builders and Contractors supported the move. Randall Curtis, Alabama chapter chairman, said the move would provide an additional layer of protection for employees by preserving their membership or non-membership in a labor union or organization from being used as a condition of employment. Others argued that it is redundant.

But Virginia voters disapproved a similar constitutional amendment. Republican state Sen. Mark Obenshain proposed the change arguing that it would protect it from future legislators who could change the law. Opponents argued, however, that no attempt has been made to change the law in its 70-year history. The Richmond Times-Dispatch said the state’s right-to-work law is neutral but the amendment as written was tilted against union membership.

South Dakota defeated by a large majority a measure that would allow unions to charge non-union workers a fee for such services they provide such as collective bargaining. Opponents argued that it would force workers to pay union dues. Others argued that it would simply allow unions to charge workers a “fair share” fee for the efforts provided by the union on their behalf.

In Arkansas, voters said yes to a proposal to remove the 5% annual cap on general obligation bonds for economic development services and infrastructure used to attract projects. The 5% cap depends on annual revenue collections, but teeters around $300 million a year. Proponents argued it would help the state compete with other states for large development projects while opponents said there no longer would be a limit on the amount of state revenue used to support private projects.

Nearly 60% of Missouri voters approved a constitutional amendment that now prohibits any new sales tax on professional services, something municipal officials envisioned to boost revenue. State realtors pushed for the ban, which was supported by a coalition of state organizations of professional surveyors, land title professionals, home inspectors, interior designers and home builders.

Missing from the list, however, was the American Council of Engineering Companies of Missouri, which took a neutral stance on the amendment. “ACEC Missouri decided to remain neutral on Amendment 4 because it was felt this initiative petition style of constitutional amendment had not come through a deliberative process like the Missouri legislature, and was written overly broad and could impact any possible source for new revenue that might be needed in the future for state or local public needs,” group President and CEO Bruce Wylie said by email.

Updated on Nov. 12 10:55 am with new Trump transition infrastructure funding number.