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We need regulatory reform, Part 1

Reagan Haynes’ report in Trade Only Today on Sept. 25 on the threatened lawsuit against the Environmental Protection Agency by the Sierra Club and California Communities Against Toxics is a stark reminder that we badly need regulatory reform.

The probable lawsuit will claim EPA has failed to review toxic standards for 46 industries including our industry, which they were required to do under the 1990 Clean Air Act. According to National Marine Manufacturers Association director of environmental and safety compliance John McKnight, while it would take time in the courts, it’s likely to result in more regulations for boatbuilders that increase costs and make our products harder to sell.

But there’s an even broader consideration here and it’s the fact that we appear to be in an era of rampant regulation. The fact is while the economy and jobs were shrinking, the federal regulatory business was booming. Under the Obama Administration, regulatory agencies have seen their combined budgets grow a whopping 16 percent since 2008, topping $54 billion (so much for cries of hardship from sequestration). Employment at federal regulatory agencies climbed 13 percent at the same time that private-sector jobs were declining by 5.6 percent.

No surprise, then, that regulation production has been in overdrive as agencies, seemingly now on steroids, churn out more rules. To illustrate, Sen. John Barrasso, R-Wyo., previously reported that in just one month, regulators imposed a total of 379 new rules. The cost of those alone was projected to top $9.5 billion. Moreover, many more were on the way. At one time the Federal Register, where all new regulations must be published, noted that more than 4,200 more rules were awaiting publication.

I am fed up with the cry of regulatory proponents that what they do is always in the interest of public health and safety. Such benefit claims are made to support their actions. But, in reality, the benefits they claim frequently don’t accurately quantify costs/benefits and/or fail to show the issue deserves federal regulation in the first place. Case in point: the claim mandating ethanol in gasoline will lower our fuel costs and benefit the environment. Not and not.

Let’s face it: what might give regulators job security does the opposite for us in business. That’s because complying imposes burdensome costs, especially on small businesses, a group that includes virtually all marine dealers and marina operators. A 2010 study by the Small Business Administration found complying with federal regulations exceeded $1.75 trillion a year. Since then, hundreds of new regulations have pushed that figure even higher.

In a nutshell, here’s what it can mean to every dealer. The SBA study revealed small businesses must spend 36 percent more per employee to comply with regulations than larger companies. One estimate says the per-employee cost of complying with federal regulations is $10,585 for businesses with fewer than 20 employees, while only $7,755 for businesses with more than 499 workers.

So how do we turn the tide to a more acceptable regulatory atmosphere? Who is fighting in the trenches for the industry? What are the prospects for reform? Is there action dealers can be engaged in?

We’ll answer these and other questions on Thursday in Part 2 of “We need regulatory reform.”



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