Last February, I wrote a legislative column calling for regulatory relief outlining how Albany’s endless flood of rules, regulations and red tape – the three “Rs” of State government – were hurting job creators and holding back New York’s economic recovery.
WHAT IS NEW YORK’S REGULATORY COST?
My column mentioned how the U.S. Chamber of Commerce reported the total impact of Federal regulations on America’s economy in 2008 as being $1.75 trillion – and that no similar figure was available regarding regulatory costs here in New York State. In the year since my column was published, that figure is still unknown. The lack of a New York regulatory price tag is not because state authorities are withholding information. Instead, it is due to the fact that nobody (and I mean NOBODY) in state government has any idea as to the total cost of rules, regulations and red tape to New York’s business community.
The lack of such basic information gives you some idea as to the Mount Everest-style challenge of transforming Albany’s “regulate now, ask questions later” culture. If nobody in Albany has any idea how much rules, regulations and red tape cost New York’s private sector businesses and taxpayers, maybe state government should spend less time imposing all those regulations and more time trying to determine their price tag.
COST OF STATE REGULATIONS IN CALIFORNIA: $492 BILLION
Calculating New York State’s regulatory costs is not some wild goose chase or pointless academic exercise; it has a direct bearing on understanding the very real regulatory roadblocks holding New York’s economy back and making us less competitive. Our state government can find these answers if there is a willingness to do so. In fact, the State of California already determined this information – and it did so three years ago!
In 2009, two California college professors conducted a study to measure the cost of state regulations on small businesses in the Golden State. Their study, the most comprehensive and complete analysis of the total regulatory burden in California, measured the direct, indirect and induced costs of state regulations to California’s small-business community. They found the total cost of regulation to the State of California was $492.994 billion, equivalent to the loss of 3.8 million jobs for that state on an annual basis. Read the study for yourself here: http://tinyurl.com/7xgu54k.
CALIFORNIA’S COSTS GIVE AN IDEA AS TO NEW YORK’S LIKELY MULTI-BILLION DOLLAR REGULATORY PRICE TAG
While the size of California’s economy does not allow for a direct apples-to-apples comparison of regulatory costs with our state, it is not a stretch to estimate the fiscal impact of New York’s rules and red tape in the tens of billions, if not hundreds of billions, of dollars. This means billions taken out of our economy as job creators struggle with the crushing costs of New York’s regulatory environment. Imagine the economic boom if, instead of going toward regulations, those billions were reinvested and put toward job creation and economic development. New York would have a jobs boom the likes of which we have never seen!
SMART SOLUTIONS FOR REGULATORY RELIEF AND MORE JOBS
The following are some smart solutions that will deliver real regulatory relief to New York’s small businesses and result in more jobs for New Yorkers:
- Determine New York State’s True Regulatory Costs: Commission a study, preferably by the private sector and similar to California’s 2009 analysis, to determine the true cost of rules, regulations and red tape to New York’s job creators. Is New York’s regulatory cost $10 billion? $50 billion? $100 billion? Knowing that number is a step closer to regulatory relief;
- Prohibit New Rules, Suspend Existing Regulations: Every year, State Agencies and the state Legislature grind out hundreds of costly new regulations without any idea of their cost to businesses. Preventing Albany from issuing new rules, while suspending current regulations unrelated to health and safety, would give the private sector an opportunity to catch its breath from state government’s regulatory onslaught;
- Re-establish a Regulatory Review Commission: A big reason why New York’s regulatory problem has gotten much worse is that state government lacks a formal mechanism to review new rules. New York used to have the Governor’s Office of Regulatory Reform (GORR), but it was eliminated in 2011. We need to reinstitute a formal division of regulatory relief with the power to cut red tape. This division should provide a toll-free hotline and web site for job creators to share concerns about any harassment from State Agencies; and
- Hold a “Regulatory Corrections Day”: Once a week, the state Legislature should take up bills specifically focused on removing, revising and correcting costly and bureaucratic rules, regulations and red tape, call it “Corrections Day.”
These smart solutions are non-partisan in nature and, if given an up or down vote, such a common sense agenda would likely pass by wide majorities in both the Assembly and Senate. The time for real regulatory relief, more jobs and a stronger economy is now!
As always, constituents wishing to discuss this topic, or any other state-related matter should contact my district office at (315) 781-2030, or e-mail me at firstname.lastname@example.org.