October 19, 2009
Burdensome Regulations Negatively Impact Small Businesses
With California first-time jobless claims hitting record high numbers,
the persuasive words of John Kabateck, Executive Director, California
National Federation of Independent Business, signify an urgent call to
action: "We need to allow small businesses to do what they do best,
which is to create jobs and stimulate the economy." As evidenced by the
recently released state-commissioned “Cost of State Regulations on
California Small Businesses Study," now is the time for re-assessing
burdensome local and state regulations that negatively impact small
businesses.
Eye-opening facts from this study include the following: 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 the
State’s gross product. The cost of regulation results in an employment
loss of 3.8 million jobs which is one-tenth of the State’s
population. Since small businesses constitute 99.2% of all employer
businesses in California, and all of non-employer business, the
regulatory cost is borne almost completely by small business. The total
cost of regulation was $134,122.48 per small business in California in
2007, labor income not created or lost was $4,359.55 per small business,
indirect business taxes not generated or lost were $57,260.15 per small
business, and finally roughly one job lost per small business. The
total regulatory cost of $492.994 billion translates into a total cost
of $38,446.76 per household, or $13 ,052.05 per resident. The total cost
per household comes close to the median household income in California.
Clearly, the “Cost of Regulation” is everyone’s problem.
Moreover, the study enlightens by stating: “The ultimate drivers of
growth and economic prosperity are innovation, economic risk taking, and
investment. The majority of this comes from small business. Legislative
and regulatory mandates often result in practices and enact polices that
raise the costs of operating for small business or provide a deterrent
to small business growth and hence provide disincentives for economic
risk taking and entrepreneurship.” The case for regulatory reform is
also credibly and forcefully explained in the study, as follows: “Since
small businesses are the lifeblood of California’s economy constituting
99.2% of all employer businesses, efforts to make the regulatory
environment more attractive will make California a more attractive state
for doing business. This in turn will improve the state’s output,
employment, labor income, indirect business taxes, economic climate,
quality of life, living standards, and gro wth prospects.”
I am a small business owner and understand the difficulties faced on a
daily basis due to overregulation. Small businesses need to be promoted
and expanded for our communities and families to continue prospering and
thriving in these difficult economic times. They are the driving force
for our economy encompassing the dreams of individuals to create lives
for their families, jobs for their neighbors, and security for the
community. As an elected official, I will continue to support
streamlined processes that encourage economic growth in traditional and
emerging industries, thereby increasing employment opportunities.
By way of example, as an Anaheim Councilman, I and my council colleagues
have diligently encouraged and supported improvements to various
permitting processes within our Planning Department that have caused
fees to be drop, shortened time frames, and resulted in significant cost
savings, e.g., reducing time spent processing conditional use permits,
eliminating pre-file applications, waiving parking studies where
appropriate, creating a library of standard conditions, flexibility in
conditions of approval, etc. Our Anaheim Public Utilities Department
“Advantage Services” program also delivers a range of incentives,
rebates, and simple tips designed to help our business customers save
energy, water, and money on their utility bills. Additionally, Anaheim
launched its first J.D. Power and Associates Customer Satisfaction
survey in 2008 resulting in positive cost saving efficiencies.
We can all make a difference in creating job growth and stimulating
economic turnaround by voicing our support for much-needed regulatory
reform at all levels of government.
