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Robust economic recovery depends on regulatory relief

Even a casual reading of the stories in this issue of the Business Times reveals a theme: Government regulations hinder business and, in turn, economic recovery.

A story on page 3 details the results of a study conducted for the Western Energy Alliance, a Denver-based trade association of more than 400 companies involved in energy production. The good news is that the West could produce significantly more oil and natural gas in the coming decade — not only bending upward the domestic energy supply curve, but also bringing significant capital investment, jobs and tax revenues to the region. The bad news is that government regulations on the federal, state and even local levels could hinder that development.

Turning to page 4, a story quotes the state director of a small business advocacy group in Colorado. What small business owners need to expand their operations and hire more employees, he says, is regulatory certainty — preferably in the form of less regulation. That’s why the National Federation of Independent Business continues to push for regulatory relief on the state and national levels.

In a commentary that appears on page 31, an economist with another small business group blames the weakening economy on what he describes as an “activist” government in terms of spending, taxes, regulation and monetary policy.

The call for regulatory relief takes on added urgency as it becomes clear the United States economy is growing more feeble and teeters only a few percentage points away from a return to recession — as if two years of minimal recovery hasn’t felt a lot like a recession to many small business owners. Meanwhile, consumers remain more shaken than stirred, as a nearly 15-point drop in the Consumer Confidence Index in August illustrated only too well.

President Barack Obama acknowledges as much in outlining plans to revamp federal regulations and save businesses an estimated $10 billion over five years. While any efforts to cut red tape are welcome, it’s a question of whether or not those efforts go far enough. The NFIB estimates that federal regulations cost the U.S. economy $1.75 trillion a year, more than 12 percent of gross domestic product.

Moreover, the burden of government regulations weighs more heavily on small businesses than large companies. The U.S. Small Business Administration estimates that federal regulations cost firms with fewer than 20 employees an average of $10,585 a year for each worker.

A new economic development plan for Colorado also acknowledges of the effects of regulation on business in including a major goal to find ways to cut red tape.

Of course, actions speak far louder than words or plans. There’s encouraging news in the Grand Valley in that regard. As part of an initiative to promote business growth, the Mesa County commissioners have increased the exemption for business personal property tax, eliminated planning review fees for developers and streamlined the development review process. In addition, the commissioners voted to amend a county resolution to add all of the sales tax exemptions available to counties under state law.

State and federal officials would do well to follow the example of the Mesa County commissioners in taking specific and significant steps at reducing the regulation that hinders business and, in turn, economic recovery.



The Business Times has served as the definitive source for Grand Junction business news since 1994. The journal offers news, views and advice you can use twice each month in print with daily updates online at www.TheBusinessTimes.com
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Posted by on Aug 31 2011. Filed under Opinion. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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