Dive Brief:
- The most high-profile industry-related candidate in Tuesday's midterm elections was Scott Wagner, founder of Penn Waste. After serving as a state senator since 2014, Wagner won the Republican nomination for the Pennsylvania governor's race this spring. He lost to incumbent Gov. Tom Wolf by a wide margin Tuesday night. John Chrin, part of the family that owns Chrin Disposal, also lost his own race for Congress in Pennsylvania.
- Both members of the House Recycling Caucus, Reps. John Shimkus, R-Ill., and Frank Pallone, D-N.J., won reelection. Pallone is also expected to become chair of the Energy and Commerce Committee. Rep. Chellie Pingree, D-Maine, co-founder of the new House Food Waste Caucus, was similarly successful. Her co-founder, Rep. David Young, R-Iowa, was not.
- In Maryland, Mark Erlich won the race for Montgomery County executive after campaigning in part on a platform of shutting down the local waste-to-energy facility. Covanta is contracted to operate the site through 2021. During an August earnings call, CEO Stephen Jones said the company was watching that race but remained neutral on the outcome. "...If they go in a different direction, they go in a different direction," he said about the plant's fate, "it won’t have a material impact for us."
Dive Insight:
It's not uncommon for the fate of landfills, WTE facilities or other industry-relevant policy discussions to come up in local races, though they are rarely primary issues in any campaign.
While the industry didn't have an obvious stake in many elections this time around, plenty of companies made their preferences known with contributions in various forms. Following the recent establishment of an official political action committee by the NWRA over the summer, the industry's campaign contributions can be expected to ramp up ahead of the even more critical 2020 elections.
Those spending trends bear further attention heading into 2019 and will receive it from Waste Dive in the months ahead, but the key story to watch in the meantime is what will happen now that Democrats have regained a majority in the House of Representatives.
During last week's third quarter earnings call, Waste Connections CEO Ron Mittelstaedt shared his thoughts on what different outcomes might mean for M&A activity in particular.
"If the Republicans hold the House, illustratively, I think you have more of the same and maybe even a little acceleration because it just brings uniformity to what’s been going on," he said. "If the Democrats take the House, I think you also potentially see acceleration because people see that as a predictor for two years later that there could be a wholesale change and that there could be a reversal of tax law, and then that provides a window of sellers to look to do something with their companies."
With M&A activity now happening at a rapid pace — and many more deals rumored to be on the way — it will be telling to watch how last night's outcome might factor into the deal-making equation.
Beyond that, Democratic control of the House will of course also mean increasing pressure to take action on raising the federal minimum wage, expanding health benefits, reforming immigration policy, addressing the climate crisis and potentially reversing some of President Trump's deregulatory agenda. The possibility of a bipartisan infrastructure bill, which could include funding for new recycling projects, has also been discussed.
Movement on any of those fronts could have significant implications for all industries, including waste and recycling companies of any size.
