(Editor's note - AIM last week released the Blueprint for the Next Century, a long-term plan for economic growth and prosperity in Massachusetts. The AIM blog will this week publish one summary each day of the four recommendations contained in the Blueprint. We invite your responses in the Comments section.)
Establish a world-class state regulatory system that ensures the health and welfare of society in a manner that meets the highest standards for efficiency, predictability, transparency and responsiveness.
Where We Stand
Massachusetts employers acknowledge the need for effective and well-managed regulation that ensures the health and welfare of society without weakening the financial underpinnings of the job market. But the employer community believes that Massachusetts regulations and the regulators who enforce them often stray from the primary objective of protecting society and into a mindset of “punishing” businesses.
Where We Can Improve
- The governor should appoint an independent ombudsperson to review comments, suggestions and complaints from employers about ineffective state regulations and/or the manner in which those regulations are enforced. The ombudsperson would have the authority to determine which regulations and/or enforcement issues represent real impediments to growth and recommend changes to the Legislature or the executive branch.
Associated Industries of Massachusetts, as the statewide business association, will establish a phone/internet hotline, or perhaps a mobile app, through which employers might report regulations they believe are not efficiently achieving their objectives. AIM would pass these communications to the ombudsperson.
- Encourage regulators and employers to adopt “smart partnerships” to ensure that government-business interactions solve problems instead of propping up bureaucracies.
State Senator Daniel Wolf from the Cape and Islands, founder of Cape Air in Hyannis, recalls an example of creative problem solving that took place many years before he entered public service. The Federal Aviation Administration required (and requires) Cape Air to scrupulously wash all aircraft. The airline did so, but then faced fines from the Massachusetts Department of Environmental Protection because there was some runoff into drains on the airport tarmac. After good-faith negotiations, the DEP and Cape Air reached an agreement: Cape Air paid for a state-of-the-art clean wash bay for Barnstable Municipal Airport, and DEP significantly reduced the fine. This was a win for the company and a win for the citizens of the commonwealth. And, it represents a great example of a “smarter partnership.”
The governor should engage willing employers who are global leaders in productivity and process improvement to streamline the operation of state government agencies. General Electric, an AIM member, provided just such a service for the New York State Highway Department at the request of Governor Andrew Cuomo. GE Capital used its expertise in lean process to help the Highway Department reduce the processing time for curb-cut requests from 70 days to three days.
Empower front-line regulators with the authority to approve creative solutions such as the one developed with Cape Air.
- Initiate a comprehensive review to identify regulations that are outdated, redundant, ineffective, inefficient or unnecessary.
- Eliminate current state regulations that exceed federal standards.
- Adopt an immediate moratorium on any state law or regulation that exceeds or duplicates a federal law or regulation.
- Enact broad regulatory reform at the Massachusetts Department of Revenue:
Ensure that taxpayer returns remain confidentially held by the DOR.
Ban DOR from lobbying the Legislature and other elected officials.
Reform the DOR’s audit practices to ensure timely resolution of disputes and increase the use the mediation.
Reform the Appellate Tax Board to ensure fair, equitable and timely resolution of tax disputes.
Eliminate the practice and use of contingent auditors.
Improve the DOR’s electronic filing system, which is one of the most challenging and complicated in the country.
- The state should work with cities and towns to establish a set of efficiency and fairness standards for local issues such as inspections, fees and permitting.
Associated Industries of Massachusetts, perhaps in conjunction with the Massachusetts Municipal Association, will develop an annual rating of the business climate in cities and towns and recognize the top 10 municipalities for business.
The commonwealth and its municipalities should move toward regionalization of functions such as inspections and permitting to improve efficiency.