How many members of our state legislature–how many of us–have a clue about the overall impact of all of these regulatory requirements on our economy? And if they don’t, is it not because none of us has a systematic way of assessing the usefulness or effectiveness of all these rules and mandates?
AB 1969 (Beth Gaines) offers a critical first step to turning this mess around in a thoughtful and orderly way by putting a halt to the autopilot regulatory process for two years. The bill requires the Office of Administrative Law to hold all regulations for that period. The legislature can, of course, by a majority vote, order promulgation of that handful of regulatory actions that it judges to be critical to public health and safety during that period.
“Everybody complains about the weather, but no one does anything about it.” That old saw also applies to the proliferating regulatory burden in California: political leaders regularly acknowledge that this is a serious challenge to small businesses, but routinely kill every significant reform idea put before them. Now there is something they can do about it.
Surveys of small business owners confirm that the confusing and burgeoning numbers and requirements of the mandates from hundreds of regulation-writing agencies is a serious problem. Whether it’s endless new paperwork requirements from the Employment Development Department or sprawling new proposed burdens from the Department of Toxic Substance Control on so-called “green chemistry,” small business owners chafe under the nonstop impositions from the government they pay for.
Regulatory mandates proliferate at a rate of 50 new pages to the California Code of Regulations per week. Small business owners, who can rarely afford legal counsel to brief them on how to stay in compliance, are always running the risk of an enforcement action or fine for technical transgressions.
And these are just California state regulations. Small business owners are also hit with always changing and expanding local and federal rules as well.
Since time is money, every hour a business owner must take to deal with this behemoth is a loss to his or her business. Over the course of a year, these hours add up to substantial time losses, which are at the expense of providing goods or service s to customers, hiring new employees, exploring new markets, and applying more efficient business practices.
AB 1969 accomplishes several key objectives. It stops the proliferation of regulations. It gives all of us some breathing space to carefully review and revise the entire regulatory network to reduce and reconfigure its impact on economic growth. It gives the legislature, and not some unelected bureaucracy, the responsibility for determining exceptions.
Some say this approach is a radical one. Perhaps, but to date, in spite of a recession and a double-digit unemployment rate of four years’ duration, no one has been willing to take on the challenge in any meaningful way. And since the legislature can decide to let certain regulations go ahead if necessary, the bill does not get in the way of addressing essential and immediate problems.
Addressing the regulatory burden is a non-partisan responsibility. Governors of both parties across the country have initiated serious reform initiatives, including Deval Patrick in Massachusetts, Andrew Cuomo in New York, and Martin O’Malley in Maryland.
Small business owners will be watching the progress of this bill very eagerly. We will find out who is serious about regulatory reform, and who, like complainers about the weather, are unwilling to do anything about it.