State Business Regs Might Not Be That Onerous After All
AIM survey on regulatory burden garners low response rate
Just 66 of the Associated Industries of Massachusetts' 7,000 members responded to the grouchy group's survey asking businesses to list the most burdensome, redundant and outdated state regulations.
The AIM survey went hand-in-hand with a larger, state regulatory review initiative announced in October with much talk of efficiency, development and "economic opportunity" by Attorney General Martha Coakley, Gov. Deval L. Patrick, AIM President and CEO Rick Lord, various enthusiastic business leaders and the heads of several chambers of commerce.
AIM officials, business leaders and advocates all had different explanations for the meager response to AIM's survey, ranging from businesses are so downtrodden by government regulations that they can't lift their heads to participate in surveys or government initiatives, to the government is actually doing a pretty good job regulating businesses, to response to the survey wasn't low at all and was, in fact, quite impressive.
Confusion Reigns
Bradley A. MacDougall, associate vice president of government affairs at AIM, said the response to the organization's survey may seem small because some businesses took their complaints straight to Coakley's office in the form of open testimony.
MacDougall said environmental laws and regulations were some of the most confusing for businesses, but Robert Rio, the AIM senior vice president who keeps his eye on environmental and energy policy, said relatively few businesses found the state's environmental regulations a hindrance to business because the state Department of Environmental Protection "has done a pretty good job."
That's a departure for an organization that normally has its teeth firmly in state government's trousers.
"They've done a pretty good job streamlining their operations and regulations," Rio said. "The average person today has less contact with DEP than ever before, and I don't mean that in a bad way. The old BS is gone."
Rio said when it comes to the environment, local regulations are more of a hindrance to business than state regulations.
"People get confused," he said, and the biggest culprits are health care and environmental laws and regulations.
And the state's administrative and regulatory agencies often fail to comply with a state law that requires them to issue a "business impact statement," outlining a law or regulation's fiscal effect on the public and private sector for its first and second years and a projection for its first five years.
"Businesses are faced with a huge regulatory process, and they're never really included in the process," MacDougall said. Compliance with the business impact statement law would make law- and regulation-making "more of a transparent process," he said.
Straight To The Top
Stephen J. Adams, a U.S. Small Business Administration regional advocate, agreed with MacDougall. Often, state agencies pass burdensome, expensive regulations that small businesses don't learn about until it's too late, he said. Certain regulations look innocuous, but in practice cost businesses thousands. And often, state agencies have the attitude that cost is not their concern, Adams said.
"Most regulatory agencies don't mean to be harmful to small business," Adams said, "they just don't think about it."
Adams said the response to AIM's survey may seem small, but "federal advocacy did a similar initiative on the same exact issue, and received 80 solicitations and we're very happy with that. I don't think it reflects that regulations aren't a problem. For smaller firms, they put their heads down and do the job. They don't have time to focus in on these intricacies to these regs."
Michael Lanava, the Worcester Regional Chamber of Commerce's business resource manager, said the chamber publicized AIM's effort among chamber members.
"I think people went directly to the AG with their opinions," he said. "And others made their cases known to the House and the Senate. I wouldn't say it just died or went away."
Still, the first law in a list of laws that AIM's members say "impact competitiveness" is about chairs. MGL 149 Section 103 requires chairs be provided for employees "when not actively engaged in their job duties unless the job cannot be properly performed with the chairs."
And aside from AIM's conclusion that 95 percent of employers said state regulations, including health care, environmental, workers compensation and unemployment insurance regulations, are overly burdensome and "significantly impact competitiveness," the numbers throughout the report are small and offer no indication of consensus among the state's employers.
Under the heading of "top issues of concern" for Massachusetts businesses, AIM notes that 15 percent of respondents consider health care costs and regulations burdensome; 18 percent said environmental regulations are overly burdensome; another 15 percent said workers compensation benefits are too generous and 18 percent said unemployment insurance benefits are likewise too generous.
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