Small Businesses Face Large Costs due to Overregulation

A recurring issue on the minds of small business owners is that of overregulation. Regulations imposed at both the federal and state levels essentially act as an expansion of government.  This expansion translates into small business owners facing an added cost of doing business.  In fact, in recent years, federal regulations and unfunded mandates have cost local governments, citizens and businesses between $57 billion and $85 billion a year.  This is all wasted money that employers could be spending on a number of other things, particularly attracting talent and hiring.

In the U.S. Congress, both the House and Senate have committees related to the needs of small businesses and entrepreneurs.  Most notably, the House Small Business Committee, which was first formed in 1941, has been focusing its hearings on the topics of overregulation and Obama executive orders.  Congressman Steve Chabot, a long-time Ohio legislator, chairs the committee and makes small business growth and job creation a top priority.  This bi-partisan committee has twenty-one members which are given “jurisdiction over matters related to small business financial aid, regulatory flexibility, and paperwork reduction”.  The committee also has legislative authority over the Small Business Administration (SBA).

It’s fair to ask- why doesn’t Ohio’s legislature consider “small business” standing committees?  This may be due to the fact that current state policymakers are more open to cutting red tape and making the regulatory process easier for businesses to navigate. Federal legislators face a less business-friendly environment where they are forced to play defense against federal agency rules affecting small business.  Since Obama has taken office, the number of rules specifically affecting small businesses have routinely exceeded 800 annually.

Meanwhile, Gov. Kasich’s administration, literally from day one, has been directed to bring business leaders to the table.  Since Gov. Kasich took office in 2011, the regulatory environment in Ohio has vastly improved.  Kasich challenged his cabinet to approach government from the perspective of a business owner.  In January of 2011, Gov. Kasich named Lt. Gov. Taylor to lead Ohio’s Common Sense Initiative, which was originally created through executive order.  Subsequent to the creation of this initiative a Small Business Advisory Council was created which is comprised of small business leaders from around the state.  These actions kicked off a culture that has encouraged entrepreneurship and attracted businesses to Ohio.

Even though there have been vast improvements to the regulatory climate in Ohio, policymakers still need the input of small business owners. One avenue to get involved in the process is through our Ohio Small Business Council. Our next meeting is October 19 at 9:30am, where various issues facing small businesses will be addressed. If you are interested in attending or learning more about the committee, please contact me.

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