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Hogan's regulatory reform

Gov. Larry Hogan's business-heavy commission to review Maryland's regulatory environment produced an initial report larded with suggestions for making the state more business-friendly that seem simple but are likely to be difficult to implement. It's easy to say, for example, that Maryland's government structure ought to be re-evaluated to fit 21st century needs but much harder to accomplish the kind of reorganization, consolidation and perhaps even expansion that might entail. Mr. Hogan framed his campaign for governor in simple terms — he said the state taxed too much, spent too much, regulated too much and drove business away — but this report begins to hint at just how complex governing can be.

Some things are, of course, relatively simple. Setting standards for state employees to return messages from the public promptly is just a matter of diligent management. Creating an attitude in which state regulators see their role as helping their customers — in this case, businesses or members of the public — to find ways to comply with state laws and regulations rather than to find ways to deny them permission may require a culture change in some departments but not a big appropriation.

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And some things the department found are absurd on their face. It makes no sense that the State Departments of Assessment and Taxation would charge more and respond more slowly to electronic rather than paper requests to register a new business and establish a tax account with the comptroller. It's also crazy to charge annual professional licensing fees of such a piddling amount that it doesn't cover the cost of the paperwork. We can probably all get behind dropping a regulation requiring vinyards that serve wine and cheese to install equipment for draining oil from grilled cheese regardless of whether they actually intend to grill cheese.

But the issue of professional licensure underscores the extent to which state policies are often not pro- or anti-business so much as pro- or anti- certain businesses. The commission notes seemingly overlapping categories of licensure, like painting contractors and drywall contractors or general contractors and home improvement contractors, that it suggests could be simplified. They may well be right, but the politics of making such changes can be devilishly difficult, since industries have structured themselves around these regulations and are often loath to see them changed. Case in point, as the commission noted, the cosmetology industry's major concern is not its own licensure standards but the failure of the state to properly enforce rules against unlicensed people offering the same services. The difference between a licensed landscaper and a licensed tree trimming expert may not seem huge, but it is if the requirements effectively limit your competition.

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The report begs a number of questions. It advocates, for example, strict limits on how much time agencies would have to conduct inspections of various kinds and how long they would have to provide responses. But what happens if they fail? What if it is impossible to determine whether a proposal adequately protects the public interest in the 10 or 15 days allotted? When multiple agencies are involved in a review, one of them should be designated as the lead in order to keep things on track and prevent conflicting advice. But who decides which one is in charge? No doubt state agencies shouldn't be working from antiquated technology platforms that can't talk to each other, but how much is the Hogan administration going to spend to fix that?

Probably the biggest question marks left by the report relate to the environment. The commission heavily endorses a watershed pollution trading program, an idea in which the Hogan administration has already expressed considerable interest. In theory, it could work like Maryland's highly successful air pollution trading program, but environmentalists have been wary because it requires extremely diligent regulation to work — and can be a disaster if it doesn't. Meanwhile, the commission flagged a whole series of regulations on septic systems and stormwater management for the administration to possibly "streamline, review or eliminate." That could mean a great many things. The child care and nursing home industries might likewise have concerns about the inclusion of their regulations on the same "streamline, review or eliminate" list.

The governor's appointments to this commission raised a lot of eyebrows for lacking much perspective other than that of the business community, but this first work product doesn't read like a plan to slash and burn state government. It acknowledges the need for regulations to protect consumers and the environment and couches its main aims in terms of good customer service and the elimination of redundancy. The report suggests there is a balance to be struck; now it's up to Governor Hogan to find it.

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