Inside the Capitol

Thursday, November 10, 2011

11-14 Have relaxed regs given economy a boost?

111411 dereg

SANTA FE – Does New Mexico have too many regulations? Gov. Susana Martinez thinks so. She campaigned for smaller government.
Eliminating regulations is one way of making government smaller. With fewer regulations, fewer inspectors are needed to monitor and enforce the regulations. And it is easier to conduct business with fewer rules to follow.
So Gov. Martinez appointed a Small Business Friendly Task Force The group has reported on ways to eliminate regulations and reduce waste. As one might guess, the Regulation and Licensing Department and the Construction Industries Division were two of the first targets.
Gov. Martinez has heard plenty from the construction business about the onerous regulations they face. Many of the regulations involve improving the environment, which was a major goal of former Gov. Bill Richardson.
Richardson wanted to be known as the greenest governor in the nation. That is a popular item in the national Democratic platform. Many also believe that production of alternative energy equipment is a way for the nation to regain some of its international trade leadership.
But Martinez thinks Richardson overreached considerably in his efforts. Her task force has recommended to her that New Mexico go no further than federal environmental requirements. New Mexico was quickly becoming the leader in that field.
The task force also recommended New Mexico withdraw from the Western Climate Initiative and become merely an observer. Martinez says she still wants green businesses to come to New Mexico.
Martinez and the task force encourage small businesses with complaints about state regulations to call the Office of Business Advocate, 505-827-2486, with any problems on interaction with government agencies. All complaints will be kept confidential.
Many findings of the Task Force seem to be common sense. Environmental interests likely are pushing for too much regulation. Martinez likely wants too little in terms of environmental controls.
The task force also had recommendations about middle management personnel in state agencies who have an anti-business attitude. Some of the staff shuffling in state agencies that we have seen in the past seven months may be a result of that finding.
The task force was established by Gov. Martinez on Jan. 1, her first day in office. It called for 90 days of study, followed by a report. That report was submitted on April 1.
The Small Business Friendly Task Force was neither small in size nor composed of representatives from small businesses. The Web site lists 29 members composed primarily of top management and lobbyists from New Mexico's largest businesses.
There isn't a mom and pop operation on the list. Representatives of environmental groups claim their meetings were closed to the public and that it was necessary to file public records requests to obtain any of the work products of the meetings. That information is now on the Web.
The governor's office and the Economic Development Department now have had the report for seven months. Little has been said publicly about any action on the report.
Possibly some legislative action will be required in January but these recommendations were intended mostly for executive action, which doesn't require changes in the law. Regulations fall within the purview of the executive branch of government.
So the question is, has there been a reduction in regulations as a result of the report and, if so, have we seen any improvements yet in our economy?
One might have expected to see a rise in housing starts but that may be hampered by the lending market being so stingy.
As long as interest rates remain as low as they are, banks say what they spend on due diligence and paperwork make the measly interest they make from a loan less than what they can get investing their money.
This summer, the Legislature and governor's office reported some fairly rosy revenue projections but by fall those projections were backed off considerably.
So the answer seems to be that it is too early to have seen any economic results from trimming back regulations.


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