Regulatory review welcome for business, but with limits
Massachusetts has possessed a long-standing reputation as a state that can be unfriendly to business.
So, Gov. Charlie Baker's recent signing of an executive order launching a comprehensive review of all regulations enforced by the administration, and his extension of a moratorium on new regulations are welcome developments; the goal being to determine which rules should stay, which could be eliminated, and which ones should be modified. Depending on the outcome of that review, it could go a long way toward reducing the red tape that businesses face when they want to establish, grow or expand.
In some cases, it has earned that reputation. In two recent, notable, nationwide surveys the Bay State has not stacked up well against others when it comes to tax and regulatory policy, as well as its degree of “friendliness” to business.
“This will be an intensive process that ultimately makes Massachusetts a more efficient and competitive place to live and work, while driving economic growth,” Baker said in announcing the executive order.
Judging from the results of the two surveys, red tape and investment in transportation and infrastructure seem to be the major factors restraining business growth in Massachusetts. In its annual survey on small business friendliness last year, Thumbtack.com gave the Bay State an overall grade of D+. But it ranked within the top third — with an A-minus — in ease of hiring, which addresses not only how easily businesses can fill jobs, but also the qualifications of Massachusetts workers. Since the state's unemployment rate has been lower than that of the nation since 2010, that says a lot about the employability of Bay State residents.
The other survey, conducted in 2013 by the publishers of Chief Executive Magazine, was harsher, ranking Massachusetts 47th — or fourth worst — among the states as places to do business. But the survey was also conducted at a time when then-Gov. Deval Patrick was pushing for a hike in the state's income tax and an expansion of the sales tax to services (though he also sought a cut in the sales tax to 4.5 percent from its current 6.25 percent). While that lowered the state's grade on taxes and regulation, Massachusetts ranked higher on its workforce and quality of life.
One comment from that survey pointed out a particular challenge Massachusetts has when it comes to growing its tech base: “Massachusetts has been strong economically because of small to mid-size technology-driven companies … While there may be excitement here for early-stage technology companies, more established companies may consider growth and expansion elsewhere.”
Therein lies a significant challenge for Baker and the rest of the state leadership. While Massachusetts may be a great incubator for new, innovative businesses, it must do more to help established, innovative companies grow here and not elsewhere. The same goes for lower-margin industries that don't rely so much on innovation, such as retail. While they're more impacted by such progressive government policies as increases in the minimum wage, they also benefit directly from any government action that can help lower their costs.
Regulatory reform is needed, but should not come at the expense of environmental health and the overall health and wellbeing of the state's residents. The Baker administration and lawmakers must balance the need for greater efficiency with the necessity to make adequate investments in our transportation infrastructure, especially public transit, which has emerged as a top priority after a harsh winter. Both business and political leaders are pushing for maintenance and equipment upgrades at the MBTA, as well as an expansion of the system to help make it a more viable option for working commuters.
WBJ Web Partners
Most Recent
Most Recent
0 Comments