This week President Obama said he wants regulations
on business to be more effective and less burdensome.
He ordered federal agencies to make a plan to review
regulations to see how they could be modified, streamlined,
expanded or repealed.
Senate leader Darrell Steinberg agrees that regulations
need to be streamlined and duplication eliminated to
help create a more friendly business climate for investment
Gov. Brown should get on this bandwagon, too, but with
a meaningful plan for real reform.
Attempting to solve the massive state budget gap only
through a combination of spending limits and new taxes
ignores the huge role to be played by the economy.
We won’t have long term budget health until the economy grows
millions of high wage jobs.
State economists say we won’t replace jobs lost in the recession until the third
quarter of 2016.
That’s five years to get back to even.
Is there anything we can do to accelerate that timeline?
California’s regulatory environment is renowned for being hostile
to business, making companies reluctant to make new
investments and hire more workers. Other states have
stepped up marketing their friendlier tax, labor, and
environmental climates to lure California employers
to relocate or expand in those states. Complaints from
California companies run the gamut – many can be seen at CMTA's casualties list and the
relocation coach – with a common theme being the “California-only” regulations and laws that make operating more expensive,
litigation more frivolous, and getting environmental
permits more uncertain and time-consuming.
The next few years will define the trajectory of our
Will it be fast and steep or will we lag behind other
states? Will a global manufacturer choose California
for their next product cycle, or will a similar facility
in Georgia win the contest for limited capital dollars?
Will a small company growing beyond their current footprint
choose a California location or will they find a better
alternative in Oregon?
Will high compliance costs in California force many
companies to save money by avoiding new hires?
It’s time for Gov. Brown to send a message that California
is “open for business” and will welcome new investment and hiring. That means
owning up to the difficult regulatory climate in the
state and doing something about it to make our regulations
smarter and more accountable to our economy. Let’s start with an approach that measures the economic
impact of laws and regulations to “do no more harm” during the fragile recovery.
We should also review the existing regulations to ensure
they are achieving their goals at least cost to employers.
Weeding out useless, low priority and duplicative regulations
should be part of our ongoing oversight of regulatory
We need to institutionalize periodic reviews with stakeholder
participation to measure outcomes, modernize, and ensure
that each regulation still serves a vital need.
Gov. Brown has an enormous challenge to bring California
back from the brink.
The economy can help him get there.
He should take the lead and make permanent improvements
to the California regulatory environment.