Business Leaders Warn of Regulatory 'Tidal Wave'
YOUNGSTOWN, Ohio -- An Ohio program that evaluates the cost of regulations before they are implemented could be a model for the federal government as it prepares to unleash what small-business advocates warn is a “tidal wave” of new regulations.
Lt. Gov. Mary Taylor, who leads the Common Sense Initiative, recently issued a report detailing its 2012 activities.
“Through CSI, we have sent the message that before proposing regulations that impact Ohio’s job creators, agencies much reach out to those businesses and ensure that the purpose justifies the impact,” she said. Last year, the CSI office reviewed more than 1,500 proposed rules, and rule filings overall were down 44% compared to the historical average, Taylor's office reported.
CSI “requires that any regulation has to have an honest-to-goodness cost benefit analysis done” before that rule makes it to the next step, said Jacob Larger, member support manager for the Ohio chapter of the National Federation of Independent Businesses.
The Common Sense Initiative is “a model that we think the federal folks can take a look at” and consider doing, Larger said. The NFIB official joined representatives of several local small companies Friday at City Machine Technologies to discuss how some 4,200 pending federal regulations “could come crashing down as a tidal wave on small businesses and the business community.”
Of those pending regulations, 845 pertain to the small business community in Ohio, an 11.5% increase just from 2009, Larger said. Since 2005 there has been a 60% increase in what the federal government defines as “economically significant regulations” or regulations that would have an impact of more than $100 million on the business community, he said. NFIB is part of a coalition called Sensible Businesses for Sensible Regulation, formed to call attention to the “overregulation” coming out of Washington, D.C.
“We definitely understand that the regulations are necessary and we aren’t saying that they’re not, Larger said, voicing a sentiment echoed repeatedly during Friday’s event. “That’s why we call the coalition ’Sensible Regulations.’ We want to see regulations that make sense, that have an impact the way they’re supposed to impact on the business community and they’re not hindering economic growth and job creation.”
“I’m sure everybody on this panel will agree we want out employees to be healthy, we want clean water and we want clean air,” said Claudia Kovach, vice president of City Machine Technologies. “Regulations are important but when you keep throwing more and more regulations on and they’re very costly, there’s only so many pieces of a pie we have to split up.” City Machine repairs equipment for heavy industry.
“Our big concern is coal. We do a lot with FirstEnergy. They’re very good customers of ours and we’re good customers of theirs,” Kovach said. “We live and die by cheap energy.”
Because of coal plants being shut down across the state due to environmental regulations, Starr Manufacturing in Vienna lost $8 million in revenue last year, said Andreas Foerster.
Among other concerns Foerster expressed was health-care reform. Already paying $40,000 per month to enjoy the company's employees, he said Starr Manufacturing can’t afford the $18,000 it is going to have to pay to comply with the changes.
“I believe we are all responsible for ourselves. It is not my responsibility to provide free health care to somebody who wants to kill himself by overeating or doing things he shouldn’t do,” he added. “That has nothing to do with somebody who needs help because he has a health issue.” He also is concerned about extensions in unemployment benefits, which he said provides an incentive for people “who would rather go fishing” rather than work because the amount of money they get while on unemployment isn’t much less than what they would be paid if they were working.
Further, the rules regarding unemployment benefits are so complicated that many workers won’t come back to work for brief periods because they are concerned they won’t be able to get back on unemployment, said John C. Hays, vice president of Hays Enterprises Inc., Lordstown, which repairs shopping carts and resurfaces cutting boards used in the food service industry.
Hays pointed to regulations that require the use of pickup trucks that cost are $3,000 to $5,000 more expensive to purchase and require “continuous maintenance.” Instead, many businesses purchase older vehicles that don’t fall under the regulations, he said.
“Supposedly we live in a country of capitalism. We’ve gotten away from that,” complained Toby Mirto, vice president of Rhiel Supply, Austintown. “What we have is crony capitalism because we have government deciding that they’re going to implement these regulations and they unfairly impact the small business community.” He criticized the government for creating regulations that prevent banks from making loans to entrepreneurs. “The government is the problem, not the solution,” he said.
Kovach offered an example of her company’s dealings with environmental regulators a couple of years ago. “They were very nice. They told us what we needed to fix and we need friendships like that rather than slapping fines on,” she remarked. “We fixed the problems we had, and we sent a letter to them and everything was fine.”
Copyright 2013 The Business Journal, Youngstown, Ohio.
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