Reforming Regulations
Regulations
placed on the business community as a whole and individual
businesses lead to
increased costs on goods and services and can help
to undermine certain
businesses and the economy.
That is not to say that some regulation is
necessary.
However, excessive regulation is costly and can hurt
competitiveness.
The
Kosmont Companies based in Los Angeles revealed in
a 2005 study that the cost
of doing business in California is 30% above the western states average, and
32% above the national average. More eye-popping was the finding that
regulatory costs are 105% higher in California than in other western states.
The
state legislature decided to take a look at the burdens
of regulation on the
state's small businesses.
AB 2330 by Assemblyman Juan Arambula (I-Fresno)
was passed and signed into law by Governor Schwarzenegger
in 2006.
The
study was issued in September 2009
Results
summarized in the Executive Summary:
The
study finds that the total cost of regulation to the
State of California is
$492.994 billion which is almost five times the State's general fund budget,
and almost a third of the State's gross product.
The cost of regulation results in an employment loss
of 3.8
million jobs which is a tenth of the State's population. Since small business
constitute 99.2% of all employer businesses in California, and all
of
non-employer business, the regulatory cost is borne almost
completely by small
business. The total cost of regulation was $134,122.48 per small business in
California in 2007, labor income not created or lost was $4,359.55 per small
business, indirect business taxes not generated or
lost were $57,260.15 per
small business, and finally roughly one job lost per
small business. This study
provides the most comprehensive and complete analysis
of the total regulatory
burden in California.
To
read the full study, go here:
http://www.sba.ca.gov/Cost%20of%20Regulation%20Study%20-%20Final.pdf
