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It’s Put Up or Shut Up for Employers on Regulatory Reform

Posted on March 21, 2012

It’s put up or shut up time for Massachusetts employers on the issue of regulatory reform.

Regulatory ReformAn advisory committee that includes AIM is inviting Massachusetts employers to identify outdated or burdensome regulations that should be included in the Patrick administration’s sweeping reform of more than 1,000 state business rules.

The committee of a dozen employers and business organizations held its first meeting recently at the AIM offices in Boston. Among the organizers of the group is AIM Director Michael Hogan, President and Chief Executive Officer of A.D. Makepeace Company in Wareham, who last year chaired the regulatory reform working group as a member of the Governor’s Economic Development Planning Council.

“Cutting regulatory red tape is one of the best ways to accelerate job growth in Massachusetts,” said Richard C. Lord, President and CEO of AIM and a member of the advisory committee.

“Employers have a unique opportunity to bring to the attention of state government those regulations that are inefficient, unnecessary and ineffective. But nothing will happen if employers do not speak up.”

Lord is encouraging employers to identify for the advisory committee by April 10 any state regulation that inhibits business growth without producing measurable benefit for the citizens of the commonwealth. Employers should email a description of the regulation, along with their contact information, to my attention at AIM,

The Patrick administration says it has already reviewed more than 200 old regulations across nearly 60 state agencies. Of those already reviewed, 41 will be rescinded and 107 will be improved, including 25 changes to adopt a national model or standard. These recommended changes cover a wide range of topics and include streamlining licensing requirements, simplifying standards for business practices, and eliminating duplicative reporting requirements.

The Executive Office of Housing & Economic Development has also appointed April Anderson Lamoureux, Assistant Secretary for Economic Development, to act as a regulatory “ombudsman” between the administration and business leaders on the topic of regulation.

Inefficient regulation places a huge burden in the economy. A study by researchers Nicole Crain and Mark Crain found that U.S. employers spent $1.75 trillion – or $10,585 in per employee – to comply with federal regulations alone in 2008. The compliance tab amounted to 14 percent of U.S. national income. Add the federal tax burden of 21 percent and one out of every three dollars earned in the United States goes to comply with federal laws and regulations.

The financial load falls disproportionately on small companies with fewer than 20 employees. That means regulatory expenses choke the very entrepreneurial ventures we count on to drive the innovation-based Massachusetts economy.