🔒Regulatory reform: An inexpensive way to boost biz climate

For the sane and rational, few illusions remain about the state of Connecticut's economy.

Taxes are high. The state's budget in coming years is wildly unbalanced. Many municipalities are pressed to the financial wall — and some even teeter on the brink of bankruptcy.

The key drivers of financial distress — the cost of pension and retirement benefits for government workers and retirees — continue to rise every year, yet the government has clear plans neither for containing those costs nor paying the bills.

Our once-thriving state is caught in a vicious cycle. High taxes and a punitive business climate push out the most productive — and highest tax-paying businesses and families. In turn, the eroding tax base leaves fewer resources to meet still-escalating costs, which pushes taxes still higher, exacerbating the whole problem.

Connecticut could break the cycle by containing costs enough to reduce taxes, thus making our state attractive to businesses again. But if this is impossible — politically or otherwise — then we must consider other ways to stop the downward spiral and enhance Connecticut's appeal to business.

It is time for regulatory reform.

Regulation in Connecticut is both extensive and expensive. Business owners claim, with ample justification, that they are harassed by regulators who quibble over trivial violations.

Meanwhile, especially in the labor and environmental fields, ill-considered and poorly executed regulations raise the costs of doing business in our state with minimal public benefit.

The new government should quickly enact a series of structural reforms that will direct government resources to reviewing, revising and paring back regulation — with the same vigor and dispatch that has characterized state and municipal promulgation of those regulations.

A few suggestions follow.

The state should establish an office charged with reviewing regulations, then revising or eliminating those that are outdated, duplicative, unnecessary or otherwise inappropriate. It should have the power to act on its own initiative and a duty to act promptly on properly supported public petitions seeking review of specific regulations.

This office should have the power to require agencies to defend their regulations in current form, and to revise or repeal regulations it finds wanting.

The new administration should require that agencies, when promulgating new regulations, undertake cost-benefit analysis similar to what has been required at the federal level for nearly 40 years.

By sensible and consistent standards, agencies should be expected to quantify all the reasonably foreseeable benefits expected to be generated by the regulation, as well as what it would cost to implement the rule.

It should be permitted to enact the regulation only if it determines — with sufficient evidence and after public comment and review — that the benefits of acting outweigh the costs.

Agencies should also have to account for their regulations. They should be required to catalog the regulations they currently enforce, along with the purpose for and applicability of those regulations. In the same process, they should be obliged to draw up “safe-harbor” checklists for the types of entities they regulate.

Such checklists could provide some much-needed relief from excessive or unexpected enforcement for businesses proceeding in good faith.

These are just a few ways that the state could make enforcement of its regulations both clearer and more just while upholding its responsibility to protect public health and safety.

Carol Platt Liebau is president of the Yankee Institute for Public Policy, a free-market think tank. Scott Shepard is its director of policy and research.