American Car Rental Association:
The Voice of the American Auto Rental Industry
Dedicated to the betterment of the rental car industry by supporting and promoting sensible legislation that will benefit all its members.

2010 General Election Results/Analysis of Impact on our Industry

United States Capitol BuildingElection Results – Federal

As anticipated the Republicans made significant – in fact, historic – gains in the House. While several races are “too close to call,” it appears as if the Republicans will at least gain 60 seats in the lower chamber. Many of the Democrat losses came in conservative districts, many of which favored Sen. John McCain for President in 2008. Therefore, most of the casualties were moderate to conservative Democrats. This means that the Democrat minority in the House will be a bit smaller, but it will also be a bit more liberal – which will make compromise difficult.

Key defeats for the Democrats were Rep. John Spratt (D-SC), House Budget Committee Chairman and Rep. Ike Skelton (D-MO), House Armed Services Committee Chairman. Rep. Jim Oberstar (D-MN), House Transportation Committee Chairman was also defeated. He had been a foe on our vicarious liability battle. The industry lost a good friend in Rep. Rick Boucher (D-VA). Rep. Boucher was a great voice on vicarious and other tort issues as well as the lead sponsor on our anti-rental car tax legislation. He, like many conservative Democrats, could not stem the Republican tide that swept through several states, including Virginia.

The 10-seat pick up for the Republicans to gain a majority in the Senate proved to be too steep. Two races are considered “too close to call”, but it looks as if the Republicans will have a net gain of six seats. Key wins for the Republicans were Ron Johnson of Wisconsin who defeated Sen. Russ Feingold, Rep. Mark Kirk (R-IL) defeated Alexi Guinnoulias in Illinois, and Pat Toomey defeated Rep. Joe Sestak (D-PA) in Pennsylvania. Sen. Harry Reid (D-NV) and Sen. Barbara Boxer (D-CA) held on to win as did Sen. Michael Bennett (D-CO). It appears Sen. Patty Murray (D-WA) will hold as well – but that has yet to be called. In Alaska, Sen. Lisa Murkowski – who ran as an independent “write-in” after losing the primary to Joe Miller is still battling Miller in the general. That race has yet to be called. Also, longtime industry supporter, Rep. Roy Blunt (R-MO) will be heading to the Senate.

Senator-elect Mark Kirk will actually be sworn in for the lame duck session because he is filling the unexpired term of President Barack Obama. This means the Republicans will have 42 Senators during the lame duck session. The same holds for Chris Coons (D-DE) and Gov. Joe Manchin (D-WV), as they, too, are filling vacancies.

1. House – Republicans: 239
Democrats: 185
Outstanding: 11

2. Senate – Democrats: 52*
Republicans: 46
Outstanding: 2

*Independent Senators Joe Lieberman (I-CT) and Bernie Sanders (I-VT) caucus with the Democrats and are treated as majority members.

Impact on Industry

Lame Duck session – Good News! The results likely mean that very little will get done during the Lame Duck session later in November. That is very good news on the vicarious liability front. The less Congress works on, the fewer chances of any changes to the Graves Amendment. In terms of other broader issues, such as the Bush Tax Cuts…that remains to be seen, but an extension of 1-3 years could happen. Estate taxes and budget issues may also be on the agenda.

Regarding the ACRA-supported anti-rental car tax bill, no action is likely and we will have to find a new lead Republican sponsor in the House and confirm a Senate Democrat.

Next Congress – Great News! The opportunities for the trial lawyers to impact Graves will diminish tremendously. The Republicans will chair every House Committee, which will likely result in no committee action on the issue. Any floor action – if it were to get that far – would likely be defeated as well. In the Senate, despite the Republicans not having the majority, the numbers are such that they will have a greater impact on the shaping of legislation. Therefore, it is most likely any anti-Graves Amendment would not survive.

The anti-rental car tax legislation may actually get a boost with the election outcome. Republicans tend to be more favorable on these tax issues. The Senate is still a bit unclear, but if we land on a good Democrat sponsor, we believe we can make significant progress.

Election Results – States

As the national Republican tide swept through the national elections, there were definite ripple effects in the States. Republicans picked up 10 governorships this cycle and took control of 16 state legislative chambers. In fact, the Republicans won more than 680 legislative seats – the largest gain of either party since 1966. This means that the Republicans will have a significant role in the legislative redistricting in the next year. The North Carolina Senate has a Republican majority for the first time since 1870. The Minnesota Senate – which was nonpartisan until 1974 – is under Republican control for the first time. The Republicans hold a majority in Alabama legislature for the first time since Reconstruction. There are several chambers that could yet switch depending on individual races: Undecided chambers that could still switch are the Colorado Senate; the New York Senate; the Oregon House; and the Washington Senate.

Key Republican Governor pick ups were Rick Snyder in Michigan, John Kasich in Ohio, Tom Corbett in Pennsylvania and Scott Walker in Wisconsin. A key hold for the Republicans was Rick Scott in Florida. California bucked the trend and elected former Governor and current Attorney General Jerry Brown. A close race in Connecticut has not been called.

1. Legislatures:
Full Republicans control: 25
Full Democrat control: 16
Split: 5
Undecided: 4

2. Governors:
Republican: 29
Democrat: 21

3. Key Ballot Initiatives
a. California: $18 increase in car registration fees for parks (defeated).
b. California: Requires 2/3 vote for fee increases (same as tax increases) (passed).
c. Colorado: Prohibited state taking on debt without public approval (defeated).
d. Georgia: $10 increase in car registration fee for trauma center fund (defeated).
e. Washington: Restore requirement that tax increases need 2/3rd requirement for passage or voter approval (passed).

Impact on Industry

With the increased number of legislatures controlled by Republicans, we believe there will be a more concerted effort to deal with budget shortfalls with budget cuts, as opposed to tax increases. This should decrease somewhat the number of rental car tax proposals. But, even some Republicans view these taxes as user-fees, particularly in the context of infrastructure investments. So, we must remain vigilant.