Thursday, March 31, 2011

The Business Cost of Regulations

The Cost of Regulations
Regulations adversely affect business because of the time and expense required to comply. Compliance often requires hiring attorneys, engineers, and other professionals at great expense. The worst regulations vary among the industries, but generally are those that require the most time for compliance. Time is money.
When a business must wait months to move in to a new space solely because the permits and inspections are held up up in regulatory red tape, they are losing money. The already depressed construction industry has been hit very hard with new compliance requirements for regulations such as green building standards or construction storm water permits that have not been properly vetted for safety or benefit/cost analysis.
The 340+ California state-level boards acting independently from each other, and often from any accountability to elected authority, leads to fractured public policy with confusing, duplicative, and often contradictory requirements. In addition, many permitting requirements have the Catch-22 condition that the permit is not valid until completing all other government requirements, ending up in a perpetual circular approval process.
Some boards meet only once a month and the backlog of permits pushes the process to beyond the 6-month action period required by the California Permit Streamlining Act. The fact that California had to enact a law requiring regulatory action to be reduced to 6 months provides some insight into what kind of time loss many business projects face when approaching the California regulatory process.
Time is money and what California doesn’t take in excessive taxes and fees, it eats up in profits lost to regulatory delays and compliance expense, which ultimately drives business out of state.
Cheryl Bly-Chester, Director; Advocacy for Jobs Affected by Regulation (AJAR); A CECE nonprofit public education project for government accountability and due process.


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