Official: Regulatory concerns could spur relief

Tony Gagliardi NFIB
Tony Gagliardi NFIB

The results of a national survey quantifying growing concerns among small business owners over government regulation could help in enacting legislative relief in Colorado, an official says.

Tony Gagliardi,  state director of the National Federation of Independent Business in Colorado, said the results of the survey conducted by the small business advocacy group could aid in passing a measure in the State Legislature changing the way agencies interact with small firms.

Senate Bill 1 requires that when a state agency determines a small business has committed a minor violation of a rule, rather than impose a fine, the agency notifies the business in writing and gives the business 30 days to cure the violation.

The Colorado Senate voted 24-11 to pass Senate Bill 1. The measure is now before the Colorado House, where it’s been assigned to the Business, Labor, & Technology Committee.

State Sen. Tim Neville, a Republican from Littleton who authored Senate Bill 1, said the measure signals Colorado welcomes small businesses. “Asking agencies to work cooperatively with businesses on compliance issues puts out a shingle for the state that says, ‘We will work with you, we want you here and we aren’t going to automatically slap you with a big fine if you’re making diligent efforts to play by the rules.’”

Gagliardi said Senate Bill 1 doesn’t apply to violations that threaten public health. “All it would do is alleviate the worry over minor violations made inadvertently.”

“The bill is no threat to any elected official’s political supporters. I would urge its speedy passage through the House and onto the governor’ desk,” he added.

The results of a national survey the NFIB Research Foundation conducted could promote passage as well, Gagliardi said, in raising the awareness of what small business owners perceive as the effects of regulations on their operations.

The results were based on interviews of 750 small firms that employ no more than 249 people.

About 25 percent of small employers interviewed for the survey characterized government regulations as a “very serious” problem in operating their business. Another 24 percent of firms described regulations as a “somewhat serious” problem. Meanwhile, 20 percent of small employers said regulations were “not too serious” a problem. Twenty-eight percent said they don’t consider regulations a problem at all.

Roughly 50 percent of small employers reported an increase over the past three years in the number of regulations with which they must comply. Another 45 percent of firms said they didn’t experience a change one way or another. Only 2 percent of firms reported a decrease.

While 55 percent of small employers said the overall volume of regulations represents their largest problem, 37 percent of firms said they’re most challenged by a few specific regulations from one or two sources.

While 28 percent of small employers cited compliance costs as their biggest issue with regulations, 18 percent of firms cited difficulty in understanding what they must do to comply and 17 percent said they’re most burdened by the additional paperwork required. Another 10 percent of firms cited time delays cause by regulations as their biggest problem.  Six percent cited difficulty in discovering new regulations.

Nearly 10 percent of small employers reported they’ve been fined, penalized or sued over the past three years over regulatory violations. Larger businesses were two times more likely to have had this occur than smaller firms.

While 31 percent of small employers said they consider regulations affecting their operations of little or no value for customers or consumers and not worth the cost of compliance, 20 percent of firms said they consider regulations of limited value. At the same time, though, 16 percent of firms characterized regulations as valuable and worth the cost.

About 33 percent of small employers reported having a government official enter their places of business over the past year for an inspection, to examine records of check for regulatory compliance. Fifty-seven percent of larger businesses reported such visits, compared to 28 percent of smaller firms.

Forty-one percent of small employers said they’ve reached out over the past three years to talk with a government agency for help with regulatory compliance. About 19 percent of firms that contacted an agency said they were satisfied with the experience.