Earlier this month, the New York State Senate Majority Coalition issued a report called Public Forums on Regulatory Reform in an effort to engender support for Senate Bill S05166. The bill, if passed, would require Governor Cuomo to repeal at least 1,000 “costly regulations [that] are holding back New York State’s economic growth and job creation.”
Of particular concern to the Majority Coalition is that New York was ranked “second-worst for the cost of doing business,” in a 2013 CNBC report, America’s Top States for Business. Taking this ranking at face value (and without any analysis) the Majority Coalition says it’s “clear that, while many regulations provide benefits well worth their costs, for other regulations this is not the case.”
A closer inspection of the CNBC and Majority Coalition reports, however, reveals that it is anything but clear that the burden of regulations led to this ranking — or that this ranking is even having an impact on the economy. In fact, the CNBC report itself didn’t even consider regulations in its analysis. The cost of doing business was determined using the state and local taxes, including individual income and property taxes, business taxes, gasoline taxes, utility costs, the cost of wages and rental costs for office, commercial and industrial space.
The Coalition’s effort also ignores the fact that, despite the relatively high cost of doing business in New York, the Empire State has the third largest economy and the eighth highest per capita GDP in the nation. Moreover, the unemployment rate is basically in line with historical levels according to the New York State Department of Labor.
There is little, if any, evidence proving how regulations negatively impact jobs and economic growth. But it’s not simply this arbitrary assertion that weakens the Coalition’s effort; it also gives no consideration to the public health, safety and economic benefits of regulations. Although some perceive these regulations as imposing too high a cost, many are critical to keeping our air breathable, water drinkable and workplaces safe.
Take, for example, the State Environmental Quality Review (SEQR), which “requires all state and local government agencies to consider environmental impacts equally with social and economic factors during discretionary decision-making.” The SEQR would apply to just about any major transportation or development project and takes into account, among other things, air pollution. A Hofstra University study found air pollution imposes not only economic costs, but social and environmental costs as well. In a more specific example, a RAND Corporation study found air pollution in California from 2005-2007 resulted in 30,000 hospital visits and overall spending on hospital care alone of slightly more than $193 million.
The State Senate Majority Coalition’s proposal is exceedingly poor public policy, not simply because it doesn’t actually do anything to bolster New York’s economy, but also because it could compromise public health and safety. If Coalition members really want to to create jobs and support economic growth, they might consider pushing for greater investment in public transportation.
