Have you ever wondered about the real costs of government on our society? Not just the cost in taxes to pay for government services, but the costs government imposes on our daily lives? As Californians suffer through the worst recession in decades, is our government working to make things easier for us, or harder? When the State Legislature imposes new regulations on business, what is the impact on our pocket books? How many jobs are lost when agencies like the California Air Resources Board (CARB) or the Cal EPA impose new regulatory burdens on those employers who seek to create jobs and wealth?
I have spent the last three weeks lobbying the Governor’s office urging the release of an historic study that spells out the costs imposed on jobs and businesses in this state by overregulation. This report is now available to the public. This study outlines the real costs to businesses in our state that are caused by our own government. The study originated from AB 2330 (Arambula), which passed with bi-partisan support in 2006. This was a quantitative study that focused on the actual losses in economic output, losses in jobs, the indirect losses in business taxes, and finally losses in labor income (the monies a family would normally spend as part of household disposable income). The study can be found on the Governor’s website at http://www.sba.ca.gov/.
The findings of this study confirm what many have said about the root causes of California’s economic decline. The total cost of regulation to the State of California is $492.994 billion, almost five times the state’s general fund budget, and almost a third of our gross state product! In fact, the indirect business taxes lost as a result of these regulations is a staggering $16.024 billion, or more than half of our recent deficit. These indirect business taxes could have helped fund many of the state’s departmental budgets, and prevented the current economic crisis now faced by this state.
What is even more revealing is the impact of regulations on jobs and individual families in this state. Overregulation in California has cost this state almost 4 million jobs, or a tenth of our state’s total population. The impact of regulations on labor income was a whopping $210.471 billion, or almost $40,000 per California family – money that would normally be spent on things like food, clothes, health care, entertainment, and general household operations. Do California families know they’ve been short-changed like this? Do voters know our regulatory agencies have become predatory wardens used to waterboard businesses into submission?
Perhaps the worst revelation of this study is that most of the regulatory burdens in this state do not fall upon big corporations, but are instead imposed upon small businesses. The total cost of regulation was $134,122.48, and one job lost per small business. That’s right, over one hundred thousand dollars so that government bureaucrats can tell you how to run your business. Is it any wonder so many businesses are now fleeing our state and taking the jobs with them?
The time has come for the de-regulation of California. We passed the point of basic regulations for health and safety long ago, and have regulated our economy to its death. We are killing businesses and jobs, and continue to force honest, hard-working people to the unemployment lines. It is unsustainable madness that places government power and out-of-control spending over the needs of the people.
It is time to again put people first. Let’s start by getting them back to work.