Biz4NJ filed this report after meeting Senator Steven Oroho, a member of Christie’s Red Tape Review posse on May 5th, 2010. The occasion was a meeting organized by the NJRA & the NJFB. (the NJ Restaurant Association & the National Federation of Independent Business). Senator Oroho (NJ Dist-24) is an articulate advocate for regulatory reduction. He is a former Sr. VP (Finance) of Young & Rubicam Advertising and is also a member of the Senate Budget & Appropriation Committees.
Laurie Ehlbeck, the NFIB President in her introductory remarks framed the discussion by referring to the high cost of doing business in NJ. She reminded attendees that the Tax Foundation had ranked NJ, 50th nationwide in taxation, and therefore business friendliness.
Oroho began his presentation by clarifying the limited mandate of the Red Tape Review Group which was to study pending and proposed regulations as well as all operational Executive Orders from previous administrations. In the process the group also studies various long term policy issues that impact regulatory reform.
Said Senator Oroho “the quickest way to reduce the cost of doing business is to reduce regulation.” The Senator then followed up with the three areas that the Red Tape Review Group had earmarked for reform:
- The Administrative Procedure Act that governs government rule making.
- Unfunded local mandates that regulations often imposed, and
- A return to “common sense principles” such as a greater emphasis on service to the public and making conclusive decisions in a reasonable time frame.
In fact the Senator spoke of a “Time of Decision Bill” that would ensure that government departments would not be able to change rules on an applicant while the process was underway. Jeff Spatola, the Senator’s Chief of Staff (later in the day) confirmed that the bill (Senate Bill 82) had just been signed. When asked by Biz4NJ, Jeff confirmed that there would be some exceptions when government departments could still change rules midway in an application process, but that they would be few and far between and would mostly relate to health & safety issues.
The Red Tape Review Group has had a good beginning, after Governor Christie froze 128 pending regulations for 90 days; the group did away with or modified 16 regulations or 12 % of the total. If 12 % of the remaining 26,000 pages of rules were removed or modified similarly, an estimated 3,000 pages of regulations or 111 chapters of administrative code would bite the dust. An article by the Star Ledger lists a sampling of regulations that were done away with:
- A rule requiring some movers to weigh their trucks before and after loading,
- A ban on discount coupons for milk and
- An "exotic animal" fee for farmers who raise 10 or more bison.
To drive home the universal view that NJ needs to do more to attract the wealthy, the Senator cited the Boston College Study (released in Feb 2010) that estimated that $ 70 billion in wealth left NJ between 2004 & 2008. Conversely, between 1999 and 2003 there was a $98 billion cash inflow into NJ. Governor Christie in his inauguration address earlier this year had also suggested moneyed people were leaving NJ in droves and that that the average income of those leaving NJ was $149,000.
Senator Oroho went on to address a politically sensitive issue, the so-called “Millionaire’s Tax” and called it a bad idea. Marty Abo, President of the leading accounting firm Abo & Company also spoke to the fact that the tax actually applied to those earning $400,000 or more and was a sure fire way to get people to leave the state. Oroho further illustrated why it was important to incentivize the wealthy to work in NJ, he said “Capital is like water, it follows the path of least resistance.”
Senator Oroho then gave attendees at the NFIB meeting a sneak preview on how the Red Tape Group wanted to change the Administrative Procedures Act:
- Increase the role of Public Comment (not just complaints).
- Follow 9 criteria for making rules such as checking for economy and flexibility.
- Re-examine Governor Brendan Byrne’s sunset provisions for regulations. (Governor Christie’s web-site refers to a proposed 3 year sunset provision)
On the issue of unfunded mandates; The Senator pointed out that, 50% of the complaints on regulations were decided in favor of the complainant. Steps need to be taken however to encourage people to complain, without fear of retribution.
On the issue of common sense provisions in regulation, the (former advertising executive) said that an attitude of client service was key and that too many departments felt they were in the enforcement (not client service) business. He spoke of a greater need for measurement, “What gets measured, gets mastered” he said.
Another vital issue he brought up was to end the inherent conflicts of interest that funded departments like the DEPE. He spoke of the need to ensure that the fines the DEPE charged were not funding the agency but rather they should go back to the general fund.
The process of red tape reform does not stop with this report. Governor Christie has given all his department heads 180 days to review existing regulations. Bob Martins of the DEPE and Laurie Griffin of the DCA are specifically responsible for coordinating this effort with Lt. Governor Kim Guadagno.
Said Guadagno at a recent press conference; “we’ve created a whole arm of government that’s gotten out of hand. We have milk police, we have parking police, we have wine-tasting police, we have tire police. These are the kinds of things that make it nearly impossible for businesses."
In conclusion, Biz4NJ wants to help with regulatory reform because we along with organizations like the NFIB and NJRA advocate for business. If you are a business owner, this is your chance to make a difference and add your voice to this discussion, send your comments to Laurie Ehlbeck, the NFIB's President and she will ensure they get to the right people. Laurie's email address is: Laurie.Ehlbeck@NFIB.org.