California was a place originally known for its opportunities, beauty,
wilderness, open roads, Gold Rush mentality, freedom, and innovation. Eureka,
the state’s motto, means "I have found it!"
But this place of dreams is now the land of wishful thinking: a
consummate nanny-state of over-regulation, command and control. From the profoundly and absurdly huge ideas
(saving the planet from climate change while China and India march to a
different tune) to the silly (mandating fitted sheets in hotel rooms). And we’re so over-regulated, that I
guarantee, right now, you are breaking some California law this very
minute. (Did you install your CO2
monitor required in every home July 1? No? $200 fine is on its way.)
Where unemployment at over 12% is one of the highest in the nation–two
million people out of work–the state’s bond ratings flirt with junk status,
and private investors are wary of a constantly changing and uncertain
regulatory environment. Where governors
from other states proactively seek and invite the relocation of our best
businesses. And what’s to stop business
from leaving? California has ranked 49th or 50th on numerous national lists as
the worse place to do business for the last several years. According to Dun & Bradstreet, 2,565
businesses with three or more employees have relocated to other states since
January 2007 and 109,000 jobs left with those employers.
How can we restore California’s competitiveness?
With less.
Less government, less regulation, less mandate, less taxes. We need to "let my people go!" as Moses would
say.
One of the most difficult challenges posed by legislators to the weary
regulated community is to name which offending regulations to change. There are so many-each individually and
independently approved with such good intentions-but piled one on top of the
other, have produced a morass of laws and prohibitions that stifle investment,
strike fear into the hearts of small business start-ups, and ultimately kill
jobs before they’re even offered.
How many folks lost the opportunity for employment because-instead of
hiring–thousands of hotels must now buy replacement fitted sheets for flat
sheets? Yes, that’s the law now
proposed.
Let my people go. Let my people
work. Simply, until businesses can
predict with relative certainty what regulations they will be subjected to, (and
litigated) and what their tax burden will be, at all government levels, they
will not invest or grow or hire. If
business isn’t investing, growing or hiring, the state isn’t receiving tax
revenues. If business isn’t investing,
growing or hiring, public employee pensions like CalPERS aren’t earning fair
returns on their portfolio, entirely invested in stocks, bonds, mutual funds,
real estate: in BUSINESS! The more elected leaders forget these
time-honored facts, propose more taxes to fund government, or favor the flavor
of the day in eco-thought without regard to economic benefit, the more this
state will sink into a black hole of red ink.
To return California to economic competitiveness, every regulator at
every level must do one thing now: any proposed
regulation must be subjected to an independent economic impact analysis. What laws will it affect? What jobs will it create/destroy/impact? What other departments or agencies have
competing or conflicting regulations?
What is the true cost/benefit analysis?
How does this relate to competing/complicit federal regulations? You get the picture.
The independent economic impact analysis must be paid for by the agency
or lawmaker proposing the law. Don’t
have funding to do this? Don’t propose
the regulation. The economic impact
analysis must be done by an outside, independent company-not by the lawmaker or
agency in-house. This analysis must be
on the same level of sophistication as a CEQA environmental impact report for a
proposed real estate development project, including formal public review, peer
review and comment processes.
Southern California Association of Governments (SCAG)-the metropolitan
planning organization for two-thirds of the state’s population-recognized this
year that planning for future growth meant nothing without a strong
economy. Earlier this year, under the
work of seven economists, developed its first ever Southern California Economic Recovery and Job Creation Strategy
(www.scag.ca.gov) concentrating specific recommendations to expand the region’s
economic base and increase the flow of funds driving the regional economy. Fundamental to the strategy is the maxim that
"stronger economic growth will help every community."
To their members’ credit, SCAG approved this strategy unanimously. 190 cities and counties–with the strong support
of the business community–threw down the gauntlet with job-creating action
strategies that include:
(1) Oppose new legislation that negatively impacts jobs in the private
sector;
(2) Support legislation that allows agencies…the flexibility to finance
early delivery of project and at the same time create jobs;
(3) Eliminate or reduce regulations that inhibit expedited project
delivery; and
(4) Require new state regulations be accompanied by an independent
economic impact analysis…Any legislation considered to significantly impact
jobs would be opposed;
This is outstanding work that recognizes California’s return to
competitiveness begins with jobs that result from less government. The State has both the need and wherewithal
to develop a comparable strategy to create jobs, stimulate the economy, reduce
regulations, and ultimately increase California’s competitiveness. Let my
people go.