Soon after the news that Congress had passed the Infrastructure Investment and Jobs Act, Gov. Gavin Newsom commended President Biden and other federal leaders, saying the bill “stands to accelerate investments in our clean transportation infrastructure, help mitigate some of the worst impacts of climate change and accelerate new projects that will create thousands of jobs.”
Newsom’s office expects California to receive nearly $9.5 billion through the new legislation over the next five years “to improve public transportation options across the state.”
But it turns out the Golden State won't be eligible for any of that green, according to Biden’s own Department of Labor.
Last week, the governor wrote to Secretary of Labor Marty Walsh, urging him to reverse a decision that will “cut off California transit agencies from billions of dollars in federal transit funding.”
The decision was reached by the Department of Labor’s Office of Labor-Management Standards (OLMS) in late October. At the center of the issue is the state’s Public Employees’ Pension Reform Act of 2013, known as PEPRA. That law has faced legal challenges in the past, but was most recently upheld in a 2019 ruling.
Biden’s labor department took a different stance, saying PERPA “substantially diminished the affected unions’ ability to bargain over future pension benefits,” which violates federal labor law, making the state ineligible to receive federal transit funding.
In his letter, Newsom calls the decision “a complete reversal” from that 2019 determination, saying it “has created tremendous confusion and uncertainty for numerous infrastructure projects.”
He goes on:
California objects in the strongest possible terms to the premature and inappropriate effort to unilaterally implement OLMS’s deeply flawed decision pending federal judicial review. I respectfully urge you instead to restore California’s access to federal transit grants pending judicial resolution of these issues. Withholding billions of dollars in crucial funding on the basis of a nine-year-old state law, while California wrestles with the COVID-19 pandemic, does great harm and injustice to the people of California.
A spokesperson for the governor’s office later told us the state "will continue to advocate for the federal transit resources that are critical to our state and workforce."
Locally, the labor law dispute leaves billions of dollars in limbo, even as staff from the Los Angeles County Metropolitan Transportation Authority work to determine the impact that money could have on its major transit projects.
“It is of major concern,” said L.A. Metro spokesperson Dave Sotero. “It could affect projects we have under construction and our ability to operate our service at appropriate service levels. We are hopeful that this is resolved soon so we do not see an impact to our operations and construction program.”
Senators Dianne Feinstein and Alex Padilla also sent a letter to Walsh, asking him to “take rapid action to ensure the eligibility of California to receive transit grants.”
Asked about what this means for federal transit funding, Department of Labor spokesman Michael Trupo said the department “has certified all such funding requests, and there are currently no requests before the department.”
“It is inaccurate to describe this as anything but the appropriate application of federal worker protection law,” Trupo told us. “When other states have passed legislation raising [labor standard] compliance problems, those matters have been resolved by the department working cooperatively with the state, or a state agency, to address and resolve the items that would cause non-compliance.”
Basically, it’s in the interest of all parties involved to find a solution, and it appears they are working on that. A U.S. District Court filing from Nov. 12 indicates California officials will file a cross-complaint against the DOL and the Amalgamated Transit Union, or ATU, which represents transit workers across the U.S. and Canada.
The state also plans to file a “judicial stay of implementation" by Nov. 19 in an attempt to keep the state eligible for federal funds while the issue is litigated in court. The state's goal is for the case to go before the court by mid-December.
A representative from the ATU did not respond to a request for comment before this publication.
