Editorial by NFIB/Alaska State Director Denny DeWitt
Rarely does a public policy bandwagon come along playing music to the ears of small-business owners, but one is traveling through the nation now, and it would benefit Alaska enormously if its state Legislature jumped on.
Representatives Lance Pruitt and Cathy Tilton have introduced House Bill 62, which would complement national efforts aimed at arresting runaway regulations. At the heart of HB 62 is its requirement that “a state agency may not adopt, and the lieutenant government many not accept, a new regulation unless … the agency repeals one or more existing regulations and the cost of the new regulation is less than or equal to the repealed regulation or regulations.”
Lawmakers in Juneau would do the state a service by examining the results from a national poll of small-business owners released February 15 by the National Federation of Independent Business. Since 1943, NFIB has been taking the pulse of this country’s largest employer group and No. 1 generator of new jobs: Main Street’s mom-and-pop enterprises.
Last year, NFIB released its quadrennial Small Business Problems and Priorities study listing, in order of most to least, 75 concerns and difficulties faced by small-business owners. Coming in second, behind the cost of health care, was unreasonable government regulations. This year, NFIB delved deeper into the problems regulations pose by polling small-business owners’ thoughts over 22 questions.
One of the poll’s findings points a finger, “All levels of government contribute to the regulatory compliance burden … But the main culprit for half of small employers is the federal government. Thirty percent find regulations promulgated at the state level most burdensome while 15 percent are most impacted at the local level.”
President Donald Trump took a great first step toward alleviating small businesses’ second-biggest headache when he issued an executive order instructing federal agencies to identify two regulations that can be rolled back for each new regulation proposed.
Should President Trump’s executive order take hold and should HB 62 pass the Alaska Legislature, the effect on Main Street would reveal itself in securer business solvency, business expansion, and more job-creation. The state would also have a more predictable revenue stream into its coffers from a component of its economy that would be better able to plan.
Now is a busy time in Juneau, so if time doesn’t allow legislators the opportunity to read the poll, two results and two observations by its authors are, at a minimum, worth their consideration:
- One-third of small employers have had a government official enter their place of business to inspect or examine their records and/or licenses or otherwise check on their compliance with some government requirement.
- About 28 percent of small employers cite compliance costs as their largest regulatory issue followed by 18 percent citing the difficulty of understanding what they must do to comply. Seventeen percent find the extra paperwork required as their biggest issue. The balance of the results includes time delays regulations cause, limits placed on actions you want to take, and other reasons.
- Few if any regulatory agencies consider the overall costs of all regulations on firms when considering their own. Each agency acts as is if there is no limit to the amount of money that firms can collectively spend on compliance; there is no coordination, no priorities set.
- Unlike tax policy, which broadly impacts all firms in much the same way, regulations are administered by a myriad of government agencies, at different levels of government impacting sometimes very narrowly defined types of businesses. Thus, it is difficult to construct a comprehensive approach to easing the burden. However, the better policy makers understand the impact of regulations on small-business owners, the more able they will be to lessen the burden.
A rare moment is before Alaska’s elected officials. They should leap on the bandwagon.