Regulatory Audit Concludes State Must Do More to Ease Regulatory Burden
The day I was in Portland participating in NFIB’s Small Business Conference on government regulations and their impact on small businesses, the State Auditor’s Office released a Performance Audit on regulations in Washington state.
“Regulatory Reform: Communicating Regulatory Information and Streamlining Business Rules” examines whether Washington state government websites effectively provide information to business and whether the state’s 26 regulatory agencies have streamlined their business rules as the legislature and the Governor told them to.
The answer to both questions is “no”.
The Auditor’s report says much work remains to achieve the dual goals of streamlining agency regulations and making it easier for businesses to understand and follow regulations.
The Auditor noted three issues:
Washington does not have a one-stop business portal for all business transactions with state government, including licensing, permitting and tax payments—only 16% of state businesses licenses are available through the Business License Service (BLS) website, which is supposed to be the state’s primary licensing portal.
As the Audit Report states:
“In spite of specific statutory and executive direction to simplify regulatory interactions with businesses, Washington is still a long way from achieving the vision of a one-stop business portal.”
Regulatory information on agencies’ websites is incomplete and the sites are often difficult to navigate—business owners must navigate through up to 26 different agency sites to find all the information they need to comply with state business regulations, and those sites are often difficult to use and do not always provide all of the necessary regulatory information about the state’s 1,000-plus licenses and permits. In fact, no agency website provides complete information for the permits and licenses.
According to the Audit Report:
“It is not enough to put ‘some’ or ‘most’ information online. When businesses face penalties if they do not comply with all the regulations, it is only fair that they be able to find out about 100 percent of those regulations online.”
Agencies must do more to streamline the rules that govern permits, licenses and inspections—while some state agencies ensure their regulations are streamlined and kept up-to-date, not one agency measures the results of their streamlining activity to see if they are having the desired effect.
The Audit Report says:
“Rule streamlining is critical to establishing and maintaining a manageable regulatory environment – and to creating a positive business climate…The complexity of regulations drives costs for businesses, government agencies, and taxpayers alike. The dense regulatory environment affects some businesses much more than others. Large, well-established companies are much better positioned than smaller firms to absorb regulatory expenses, retain regulatory specialists, and spread the costs over more employees and greater production.”
One thing that struck me was the list of reasons regulatory agency officials gave for not participating in the one-stop shop BLS website. Among the reasons are “the cost of adding infrequently issued licenses would exceed the benefit of the agency,” and skepticism that “they [the agency] would save time or money by joining the system.”
These comments point to a pervasive attitude that plagues many state regulatory agencies. Streamlining is not supposed to benefit the state agencies—it is supposed to help the small businesses that drive our state’s economy, but must navigate the complex maze of costly regulations in order to do so. The goal is to make life easier for small business owners, not for state regulators. Agency officials’ comments clearly demonstrate a culture of “government first, citizens second.”
The good news is the Auditor’s Office clearly understands this concept. Throughout the Report reference is made to the enormous impact state regulations have on businesses, especially small businesses, and government’s duty to ease the burden as much possible for the benefit of employers, government and the economy.
Washington Policy Center has long recommended the state ease the regulatory burden on small businesses—streamlining regulations and providing a centralized means by which businesses transact with government are two of WPC’s long-standing recommendations for improving the state’s regulatory climate.
