Guest opinion: Federal regulations slow small business growth

2014-05-07T00:00:00Z Guest opinion: Federal regulations slow small business growthBy RILEY JOHNSON The Billings Gazette
May 07, 2014 12:00 am  • 

Within days of each other this month, Gov. Steve Bullock released his business plan for Montana, and the federal Bureau of Labor Statistics issued its latest jobs report.

The BLS report found that Montana’s employment has grown back to its pre-recession peak, although the recovery has taken longer than any since the BLS started keeping score back in 1939. Part of this success has come from common-sense state regulatory policies.

Pledging to create “a climate that attracts, retrains and grows businesses,” the governor’s plan made it clear that there is a direct correlation between economic development and smart regulations.

Washington obstacles

Unfortunately, our federal agencies in Washington have not come to the same solution. The biggest obstacle to Montana's long-term economic growth and the short-term recovery of the U.S. economy, especially for small businesses, has been federal regulations.

Years of uncoordinated regulatory expansion by federal agencies has created a complex and inefficient system that works against America’s job creators.

This is not a political issue. Regulatory requirements have grown under the watch of Democratic and Republican presidents. Now, elected officials of both parties are noticing the threat that the current regulatory system poses to business growth and job creation. It's not hard to see why.

There are more than 400 federal agencies in Washington, and many of these agencies put out rules and regulations. When you add these regulations on top of state regulations and on top of existing regulations, it’s easy to see how we have inadvertently created regulatory morass with a host of inefficient, duplicative, and outdated rules. In fact, as of February, there were more than 3,000 new federal regulations pending.

One of the main reasons that private sector job growth has been so slow is uncertainty among small-business owners about what new regulations are coming next, and how much they will to add to the cost of doing business.

Gambling on future rules

Expanding payroll is a major bet on the future. And small-business owners are reluctant to make that bet while the wild card of new federal regulations is on the table.

Our regulatory system is in critical need of modernization and giving small businesses a greater voice in the regulatory process, providing an independent review of both the potential costs and benefits a regulation would create, and building a more transparent rule-making process would go a long way in updating and balancing the current process.

Rules like the Clean Water Act proposed by the Environmental Protection Agency and the Army Corps of Engineers is a prime example. It would give the agencies authority over any private property and dramatically expand the definition of wetlands. As a result, ranchers, who might have ditches on their land that fill with water when it rains, may need a permit from the EPA. And the cost of an EPA permit can run as much as $270,000.

Regulations play an important role to be sure safeguarding our community and protecting the pristine environment in our state. But, it’s not sensible to make landowners susceptible to a host of new permitting requirements. Rules, like the expanded definition of wetlands under the Clean Water Act, only reaffirm the need for modernization of our regulatory system.

It’s time to take a stand for smarter and more efficient regulations. I hope Sens. Jon Tester and John Walsh will lead the way. This is something that many small-business owners in Montana would welcome.

Riley Johnson of Helena is Montana state director for the National Federation of Independent Businesses.

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