It’s no secret many Connecticut businesses think the state’s regulatory environment is overbearing. In fact, 9 percent of the 377 firms recently surveyed by the Connecticut Business & Industry Association ranked regulatory compliance costs as their No. 1 concern, ahead of national economic uncertainty, taxes, and even Obamacare.
No doubt red tape in Connecticut is elastic; some have even questioned if it has a breaking point. Apparently it does; or at least it might.
Dannel P. Malloy’s recent call for a broad review of state regulations could be the Democratic governor’s most pro-business policy initiative to date. Since taking office, Malloy’s economic development agenda has largely been focused on providing government handouts and loans to small, midsized, and large businesses, to help them grow, stay, or even move to Connecticut.
The state subsidies have generated sexy headlines, and even allowed Malloy to claim Connecticut is once again “open for business.” But corporate greenmail is only a short-term economic development fix aimed at covering up the state’s inability to grow jobs organically.
A comprehensive review, and potential overhaul, of regulations offers a much more impactful, long-term solution to improving Connecticut’s business climate.
At a meeting with small business leaders in Fairfield last week, Malloy announced his administration is accepting public comment on all state regulations more than four years old; he wants the public’s help in identifying regulations that are obsolete, duplicative, excessively burdensome, or otherwise ineffective or unnecessary.
Malloy laid out new principles that state agencies must follow when drafting updated regulations, including:
• Clearly identifying policy goals and how the proposed regulations seek to achieve those goals;
• Accounting for the anticipated impact on economic growth;
• Utilizing best practices for regulation, including the least burdensome tools to achieve goals;
• Writing regulations in clear, easy-to-understand language.
This isn’t state government’s first attempt to streamline operations. Democratic and Republican lawmakers have adopted measures in recent years to improve the permitting process in key agencies like transportation and energy and environmental protection.
Many state agencies have also adopted lean principals, a discipline commonly used in the private sector for streamlining and efficiency. The Department of Energy & Environmental Protection has reduced the processing time for permit applications by 74 percent, according to Malloy.
This is all a good start, but there’s still plenty of work to be done. Attacking regulations is smart policy. If done right, it can lower the cost and burdens of doing business in Connecticut, without eroding the state’s coffers.
Malloy’s call for a regulatory review, however, must be backed up with meaningful changes. It won’t be easy. In a dark blue state, any attempt to scale back regulations will be met with political opposition. Malloy must show leadership on this issue. If he does, a skeptical business community may embrace him. And that’s not a bad voting block to have in his corner going into an election year.
