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Sat., Nov. 20, 2010

Editorial: Regulations freeze a step toward help for business

Maybe Washington Gov. Chris Gregoire is beginning to get it.

On Wednesday, as she declared a yearlong moratorium on much rule-making, she demonstrated that she understands the importance of reviving business activity in this state by loosening the bindings that hobble small enterprises with cost and uncertainty.

By ordering state agencies to stop developing more regulations, except in critical situations, the governor conceded the public purposes that a reasonable regulatory structure serves, but she noted, “In these unprecedented economic times, this action will provide businesses with stability and predictability they need to help with our state’s recovery.”

Not everyone is on board. A small-business owner quoted by Fuse Washington, a liberal public policy organization, labeled Gregoire’s action “disappointing and shortsighted.”

That’s not surprising. Many interest groups have discovered that the most effective method for manipulating public policy is not through elected legislators, who determine the broad parameters of the law, but through sympathetic agency personnel who fill in the details – the specific rules by which the law is ultimately executed.

It has been years, perhaps decades, since those regulations, known as the Washington Administrative Code, surpassed in volume the body of statutory law that has been enacted by the Legislature and governor.

And still it grows. Even under Gregoire’s memorandum, which applies through the end of 2011, exemptions are made. Regulations required by law or court order aren’t affected. Rules necessary to manage urgent financial matters or to protect public health can continue as well.

Carl Gipson of the Washington Policy Center, a conservative think tank, called the executive order a “good first step,” but he predicted it still will allow thousands of pages of new regulations in the next year, depending on how narrowly the Office of Financial Management defines what’s critical and what isn’t.

Small businesses dread rules that micromanage their routine practices, driving up compliance costs and changing the calculations on which previous hiring and purchasing decisions have been made. Even in a healthy economy, that would be a daunting unknown, so regulatory reform shouldn’t end when the moratorium expires. The state needs to curtail noncritical regulations as a matter of policy, imposing fewer of them and applying sunset clauses on those that are processed.

What we know now, however, is that the unpredictability of the present woeful climate drives business owners toward the prudent decision: Sit tight.

Last August, the governor summoned a delegation of small-business representatives to talk about what would help them rebound. Regulations were one concern. By seeking their input, Gregoire made a constructive move. By following up on it, she made another.

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