The regulatory reform debate in California just got a little spicier – not a bad thing for a topic that can be rather bland.
The Little Hoover Commission added its respected voice, issuing a report last week that says the regulatory process must be improved to encourage economic growth and better protect Californians. Among other recommendations, it calls for requiring "rigorous" cost-benefit analyses of major proposed rules, creating a new state office to oversee those assessments, and automatically reviewing major regulations after a set number of years.
Loren Kaye, who led the subcommittee that wrote the report (available at www.lhc.ca.gov/ studies/209/report209.html), describes it as a road map for the Legislature to go beyond, or go faster than, the measure it passed this year. Senate Bill 617 requires a more thorough study of the costs and benefits of major proposed regulations, but not starting until November 2013.
What makes the report more intriguing is that one commissioner not only voted against it, but filed a full dissent.
In her critique posted this week, Virginia Ellis complains that the commission did not adequately hear all voices, specifically environmental and consumer groups that support many regulations. She also says the panel relied too much on anecdotal evidence that regulations are to blame for economic distress, and then recommended sweeping changes that could do more harm than good.
Still, beyond disputes over how the report was put together, Ellis and Kaye don't disagree much on some important points.
Ellis, a former investigative reporter who joined the commission in January, makes clear that she's not arguing that there aren't any problems with regulations, or that economic analysis can't be a useful tool.
Kaye – who is executive director of a foundation affiliated with the California Chamber of Commerce and has been on the commission since 2006 – is up front in saying that regulations are a bigger issue for particular industries and "are not the difference between a healthy economy and recession."
I've been doing quite a bit of reporting on regulations for a series of pieces in California Forum (you can see them at sacbee.com/regs). I've come to better understand the need for balance in regulatory reform.
Regulations put in force laws passed by our elected representatives, so are essential to our democracy. They are written for good reasons – to protect public health, safeguard the environment and encourage fairness in the marketplace. When a tragedy like the San Bruno pipeline explosion happens, everyone wants to know if the regulations were adequate, if they were being enforced and if they might have prevented it.
At the same time, there are regulations that don't appear to be beneficial, are truly a burden or just don't make much sense. When our economy is struggling so much, we ought to get rid of any unnecessary rules that are getting in the way of business.
The secret – the really tough part – is separating the good from the bad. If smart people like Kaye and Ellis can have a meeting of the minds, our chances of getting there are much better.
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