Regulatory Reform Project Underway

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Nov. 14, 2003 Share this on FacebookTweet thisEmail this to a friend

The biggest problems facing the state, such as workers' compensation or the energy crisis, receive plenty of attention. The press does front page stories, we call special legislative sessions, and legislators fall over themselves to author bills to fix the problem.

More hidden, but just as costly to the California economy, is the manner in which California agencies perform their regulatory functions. The regulated community must comply with a myriad of regulations, permitting conditions and reporting requirements as established by state law and implemented by state agencies. The cost of compliance is a given. But businesses also pay in other ways. They may pay higher than justified fees to support agency operations. They can be subjected to enormous penalties for minor violations. As taxpayers and fee-payers, they incur the costs of agencies that are inefficient, performing overlapping or duplicative functions, or deploying scarce resources to unimportant functions. They pay for litigation to protect themselves from regulatory decisions made without a fair process based on evidence in the record.

The budget deficit has increased the pressure to move toward fee-based support of agency functions. The law in California that allows fees to be imposed for purposes not directly related to the cost of enforcement means it is “open season” on California businesses. Once a fee is imposed, there is little or no incentive for agencies to reduce costs or shed personnel. Agencies that survive on fees do not undergo the scrutiny afforded agencies supported by the general fund.

We believe the costs add up to billions of dollars. “Regulatory Reform” is the umbrella effort to improve the regulatory environment and reduce these costs. CMTA is backing a coalition of businesses and trade associations lead by Loren Kaye and Steve Spears of the SAER Group. We are gathering specific information on how state agencies are performing their regulatory functions and how much it is costing business. A report will be transmitted to the new Governor’s administration in the next few months.

CMTA would like to get your input. We need examples, stories, and cost impacts to complete the report. A questionnaire is available to guide your input. Contact Loretta Macktal at to obtain a copy.
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