By: April Anderson Lamoureux Issue: Transformation Section: Government
How Massachusetts Is Leading the Nation in Economic Competitiveness and Regulatory Reform
Massachusetts is recovering faster and stronger than the rest of the nation, as evidenced by an unemployment rate significantly lower than the rest of the country and exciting growth trends in our world-leading innovation economy, including the life sciences, clean energy and advanced manufacturing sectors. None of these successes happened by accident. In fact, we’ve maintained a steady strategy over the years that included making targeted investments in key areas such as infrastructure, innovation and education. And as a state, we are now reaping the benefits of having spent the economic downturn laying the foundation for greater prosperity ahead.
To maintain our position as a global leader in education, research and development, and economic innovation, we must continue to reassess our approach and compare it to our competitor states. And we are doing just that. The foundation for our economic progress is our state’s economic development strategy titled, “Choosing to Compete in the 21st Century: An Economic Development Policy and Strategic Plan for the Commonwealth of Massachusetts.” Created by a 34-member Economic Development Planning Council of public and private interests, our plan provides a consistent and comprehensive framework for economic development to extend far into future.
The plan concludes that the Massachusetts economy is driven by a diverse but related group of innovation-based industry clusters that compete successfully on a national and global level, with the benefit of one of the best educated workforces in the country. The council’s goal became to help those businesses and entrepreneurs create and retain jobs here in Massachusetts, and to do so they created five themes to advance toward a more competitive Massachusetts economy: Advance education and workforce development for middle-skill jobs through coordination of education, economic development and workforce development programs; support innovation and entrepreneurship; support regional development through infrastructure investments and local empowerment; increase the ease of doing business; and address our cost competitiveness.
Now that the state has a clear, written strategy that was developed and endorsed by a public-private partnership, including members of the Massachusetts Business Roundtable, we are intensely focused on implementation. There are a total of 55 action steps associated with the five themes, including benchmarks for success, and each action step has an assigned “owner” and “contributors” who are responsible for advancing the actions. The state has hired a performance management consultant to guide the progress and has created an online tool for the council and the public to monitor implementation at www.mass.gov/compete.
An early result of the plan has been the execution of a comprehensive strategy to achieve meaningful regulatory reform in Massachusetts. Under the theme of increasing the ease of doing business, Massachusetts has launched a first-in-the-nation effort to systematically reform the public rule-making process and the way our state views government regulation and its impact on the economy.
The regulatory reform initiative has four parts aimed at reducing small business impacts of new regulations, reviewing and reevaluating the continued need for “old” regulations, increasing awareness of state government regulators, and creating and maintaining open lines of communication with the business community on the topic of regulation.
Through a legislative mandate in 2010, all agencies proposing new regulations in Massachusetts must prepare and publicly release a small business impact statement that analyzes the potential impact that regulation will have on small businesses in the Commonwealth. The law requires that agencies answer five questions relating to business impacts, but does not describe the process for how this requirement should be implemented.
Recognizing the value in small business impact statements for regulatory changes, a uniform template for state agencies to report impacts in a consistent and comprehensive fashion was developed. When regulations are proposed today, a statement of small business impacts is filed with that draft regulation and published online by the Secretary of State’s Regulations Division. Individuals with concerns about the regulation or the impact statement are then invited to participate in a public comment and hearing process, to discuss these matters and make suggestions for improvements. The intent of the small business impact statement is to provide the utmost transparency during the regulatory process, and to bring the potential small business impacts into the forefront of the public debate. Governor Deval Patrick has taken a strong position in favor of this process and recently said, “If compliance can be made easier and cheaper, we will make it easier and cheaper. If compliance is too cumbersome or costly, relative to the benefits, the proposed regulation will not take effect until we identify a less cumbersome path forward.”
The second part of this reform initiative takes aim at reducing regulatory impacts of existing regulations and seeking opportunities for streamlining, improving transparency of processes, and improving government efficiencies. Governor Patrick kicked off this effort with a directive to all agencies in late 2011 to review at least 10 percent of their existing regulations over a 12-week period and seek opportunities for changes. During that period, more than 200 existing regulations were reviewed across nearly 60 agencies, resulting in 150 recommendations for regulatory rescissions or modifications. Of the recommended regulatory improvements, 25 of the amendments will seek to align Massachusetts with a national model or standard that is utilized by other states to support the ease of interstate commerce and export opportunities for our businesses.
We are proud of the initial results of the regulatory review effort, and we will continue to pursue an aggressive schedule of regulatory review with a goal of reviewing 1,000 regulations across the administration by the end of 2012. While engaging in continued reviews, agencies have simultaneously begun to advance regulatory amendments that are making a difference to small businesses in Massachusetts today.
For example, the Division of Professional Licensure recently filed regulatory changes to clarify the application process for new salons and provide a means for transferring ownership of a salon without disrupting business, positively affecting the 9,000-plus salons in business today. In late April–early May, the Division of Marine Fisheries filed regulations to extend the season for recreational sea bass and fluke fishing and increase catch limits, positively impacting the more than 800 licensed recreational fishing vessels in the state.
The Department of Environmental Protection has completed a top-to-bottom review of its regulations to find smarter ways to protect the environment while reducing regulatory burdens on businesses. The department worked hand-in-hand with both businesses and environmental stakeholders to identify more than 20 reforms that will streamline environmental permitting, eliminate duplicative approvals, and encourage better environmental outcomes by reducing barriers to environmentally beneficial projects such as renewable energy sources. These efforts will promote a more predictable and transparent development process to support new commercial and housing growth in our communities. These are all productive and thoughtful ideas generated by our state regulators, and businesses are feeling the immediate positive benefits of these changes. To encourage more of this thinking and to improve awareness of the connection between regulators and the health of our small businesses and greater economy, the state’s third objective for regulatory reform involves training and encouraging state regulators. To initiate this effort, Governor Patrick taped a video message to state employees asking for their best ideas for regulatory reform and encouraged them to continue their pursuit of government innovation. The video features some small businesses in action and was sent to state regulators in every agency to generate a sense of recognition, enthusiasm and shared purpose. Training sessions for state regulators are under development now and are expected to be launched later in 2012.
As the reevaluation of existing regulations continues, Governor Patrick will personally recognize the state regulators who present the most innovative and significant ideas for regulatory reforms, intending to eliminate unnecessary burdens on businesses and improve state efficiencies. These individuals will have an opportunity to meet with the governor and discuss regulatory issues, and they will be publicly recognized in local newspapers and on the state’s website for their outstanding contributions to the project. These small gestures go a long way in reinforcing the importance of regulatory reform across all agencies and all levels of state government.
And finally, the administration, through its Executive Office of Housing & Economic Development, has appointed a state regulatory ombudsperson who will lead the overall regulatory reform effort inside state government and act as a liaison to the business community to ensure that they are engaged from outside of state government. Together with Michael Hogan, president and CEO of A.D. Makepeace, member of the Massachusetts Business Roundtable and Economic Development Planning Council, and leader of the Planning Council’s Subcommittee on Increasing the Ease of Doing Business, it will convene business leaders, chambers of commerce and trade associations through a Business Advisory Group on Regulation to discuss regulatory issues of importance to their members. They have also established an intake process for small businesses to make recommendations for reforms directly to state government.
Massachusetts has made great progress in its economic recovery, but there is more to do to stay ahead. “Choosing to Compete” has provided a productive vehicle for engaging business leaders in a public-private partnership that supports continued economic prosperity in our state, and through regulatory reform we are making sure the world knows that Massachusetts is the best state in the country to do business.
April Anderson Lamoureax is the Massachusetts assistant secretary of Economic Development and has been recently appointed to serve as the state’s regulatory ombudsperson. In this role, she leads the overall regulatory reform effort happening inside state government and acts as a liaison to the business community to ensure that they are engaged from outside of state government. To learn more about the work going on in Massachusetts, visit www.mass.gov/compete.