On Sept. 27, California Gov. Gavin Newsom, a Democrat, issued a veto on SB 894, a bill that centered around the imposition of mandated project labor agreements on state construction projects. When introduced, the bill originally was crafted to mandate PLAs on all state projects over $35 million in total project costs, directly mirroring President Joe Biden’s Executive Order 14063, which mandates PLAs on all federal construction projects over the same $35 million threshold.

Due to ABC-led advocacy, the bill’s negative impacts were first significantly mitigated through the legislative process and amended to apply to only a handful of projects within the California State University system or overseen by the state’s Judicial Council. This amended bill was passed by the legislature and sent to Gov. Newsom for his assumed signature and enactment.

However, Gov. Newsom vetoed the bill outright and sent an accompanying letter to the legislature explaining that “while … generally supportive of PLAs as an option,” he was wary of the budgetary impacts and the lack of prudence in spending taxpayer money on important projects under this mandate. Newsom wrote, “The new requirements proposed in this bill could result in additional cost pressures that were not accounted for in this year’s budget.”

He said that he aimed to “[avoid] deep program cuts to vital services and protected investments in education, health care, climate, public safety, housing, and social service programs that millions of Californians rely on.” Through the veto and letter, Newsom acknowledged that the unnecessary added costs of PLAs would not only affect the bottom lines of the much-needed projects the state aimed to build, but also have negative impacts on other important goods and services funded by California taxpayers.”

This veto follows similar recent actions and statements from other state and local leaders on government-mandated PLAs, including Washington, D.C., Democratic mayor Muriel Bowser, who declined to sign a city council ordinance this year that would have expanded pro-PLA policies on District of Columbia projects.

It also comes amidst executive action in other states pushing forward with the imposition of PLAs on public projects, and subsequently those states’ elected officials deciding how to implement the policies and navigate the budget implications sure to come. In Maryland, Democratic Gov. Wes Moore implemented a PLA mandate earlier this year on all state projects over $20 million dollars, while Hawaii Gov. Josh Green, also a Democrat, issued a directive mandating PLAs on all state projects over $1.5 million. Pennsylvania’s Democratic governor, Josh Shapiro, also issued a directive urging general PLA use on state projects where feasible.