As published in the June 1, 2011 Toledo Business Journal
Mary Taylor,
Ohio Lieutenant Governor
Restoring common sense to biz regulation
Toledo Business Journal recently interviewed Lieutenant Governor Mary Taylor about the Common Sense Initiative (CSI), which she and Governor John Kasich launched in January 2011 to reform Ohio’s regulatory policies. She shared the following thoughts
Toledo Business Journal: Can you discuss the mission of the CSI?
Mary Taylor: The reason for the initiative is to have business regulations in Ohio that make sense. We want to restore common sense to our business regulations. It’s not about deregulation. We certainly want to make sure we protect the health and the safety of Ohioans and Ohio workers, but we also need regulation that makes sense.
We have four guiding principles for how we do our job every day related to regulatory reform: regulate and facilitate economic growth; keep regulation transparent and responsive; ensure compliance that is as easy and inexpensive as possible; and maintain fair and consistent regulation. The first executive order that the governor signed announced that regulatory reform was the top priority of our administration and it set up the structure that organized regulatory reform and CSI. That was the basis for Senate Bill 2 (SB 2) that was passed, creating CSI.
TBJ: Can you share experience in any other state with such an approach to government and regulations?
MT: We didn’t necessarily model what we are doing after other states. We’ve experienced businesses saying it’s easier to get a permit to do business in Indiana than Ohio. To me that is saying Indiana is doing it better than us. Therefore, we are not competing for that business because we are hamstringing business owners who are trying to make fast decisions about where to locate their business.
We met with various groups after the election to talk to them about regulatory reform and some of the things they were hearing and we kept hearing from various groups was about the length of time it takes in Ohio to get a business organized. We heard from the Ohio Society of CPAs that it takes 18 months in Ohio to get an incentive package approved, but in Kentucky business owners were able to get that incentive package approved for a company looking to locate there within seven to ten days.
TBJ: What are some examples of regulations in Ohio that stand in the way of job creation? How do they hinder job growth?
MT: We are working on changing attitudes of the government and the way that government interacts with businesses. We are working with the Environmental Protection Agency (EPA) on three pilot projects to help improve the process that they use to approve a permit. We are working very closely with them to understand their organizational structure in different regions of the State. We want consistency amongst all of our regions in the State if they are dealing with an EPA issue. We are working with all of our agencies and agency directors to streamline their processes and to always think about new rules, the impact of what they are doing on small business in Ohio, and if there is an alternative approach that will lessen the burden on our small businesses.
Some of these things will be simple and some will be more complicated. I think you’re going to have situations where rules and regulations made sense at one point, and now they are outdated. But, we are going to look deeper than that. We are going to look at rules on the books that don’t have the intended outcome or that need to be updated. I think part of the issue is that we haven’t had this comprehensive review. We need to understand if our business regulations make sense or if they are just easy to comply with. We also need to determine if we are getting the outcomes we expect. Those are the types of questions we are going to be asking not only for new rules that are going to be proposed, but also for rules that are on the books today. We are looking at what is being said – whether we hear it or if it comes in through our CSI website, email, or a letter – and we are talking to agencies.
TBJ: What has the Common Sense Initiative done so far to eliminate excessive and duplicate rules that stand in the way of job creation?
MT: Director Mark Kvamme, who is now the director of job creation in the governor’s office, was talking to a business outside of northwest Ohio that was looking to locate to northwest Ohio, but they had issues with the weight limit on trucks. In Michigan the weight limit was one weight, and in Ohio it was another. It was not going to be easy for the business owner to even consider locating his company here. He would have to deal with going across lines with different weight limits and having to worry about being fined or penalized in Ohio. This came to director Kvamme’s attention and he called the director at the Ohio Department of Transportation (ODOT) and asked why there was a need for that particular weight limit. Within 90 minutes they had a solution to the problem and we’re still hopeful that that company will locate to northwest Ohio.
Senate Bill 73 (SB 73) which passed and was signed by the governor in mid-April is a regulatory reform initiative that came out of northeast Ohio from a company called Custom Culinary, a food production facility that makes sauces, soups and purees – some of which require the use of beer or wine – for restaurant chains across the country. The mayor of Avon sent us a letter in January explaining that because of Ohio’s liquor laws, they were forced to purchase liquor at retail prices and often in the retail containers from grocery stores. Imagine a company that’s making thousands of pounds of marsala sauce and having to open individual bottles of wine and pour them into that sauce because Ohio law requires them to. It’s kind of silly.
There are competitors in other states that don’t have these laws that they have to comply with. The laws increase the cost of doing business for that company in Ohio and if that company would look to expand its operations they are not going to expand in a state where it’s going to cost them more to do business. So we got the law changed. Jeni’s Ice Cream in Columbus actually came in and testified in support of the bill because it impacted them too. If you’re a food production facility in Ohio you’re now able to purchase the products you need at wholesale prices, which creates a lower price needed to contend with competitors in other states.
Another example is the Portage Lakes State Park’s West Reservoir dam in Summit County. Ohio Department of Natural Resources (ODNR) needs to lower the water level to do some repairs. They were originally proposing to do it the first week in September, which cuts out part of the boating season. That is something you enjoy as an Ohioan, but it also impacts the businesses on the lake. I got an email from a constituent that owns a business where they stock boats. He explained what would happen to him if part of the boating season was lost. He would have to pull the boats out of the water quicker with a limited amount of time. It would have also cut down on his business by six weeks along with other restaurants along the lake.
We called ODNR and asked ‘is there something you can do differently?’ and in fact they announced that they are looking at a different approach so that they don’t have to lower the water level so much and so early so that it doesn’t have such a detrimental impact on small businesses on the lake.
TBJ: Are there priority targets or opportunities for changes or reform in the future that you can address?
MT: One of our priority targets is looking at centralized tax collection. Small businesses in Ohio work in multiple cities every day and they pay city income tax for the time they are working in each city. Right now, you have to file separate tax returns and follow different rules and laws in each city. What we’d like to do is set up a system where the Ohio Department of Taxation becomes the centralized location for the filing of those returns and collecting of those taxes and then remits them out to the various municipalities. This would simplify the regulatory burden on small businesses that have to comply with having to file multiple returns with different cities. Centralized tax collection is something we are looking at in a very serious way and would like to get something accomplished this year if possible.
TBJ: Can you describe work efforts that will be done by government agencies and departments as a requirement of this legislation?
MT: We meet with and have regular conversations with all of our agency directors and ask them to be mindful every day of the way they interact with small businesses and look for opportunities to simplify their processes. Every agency doesn’t necessarily have direct contact with businesses. Public Utilities Commission of Ohio (PUCO) is another example of where they had proposed rules that were going to subject landscaping companies to the same kind of rules and regulations that we have for semi-drivers who spend lots of time on the road carrying lots of weight. Obviously there are safety reasons for why they have to meet certain safety requirements, but it just didn’t seem to make sense that someone driving a pickup truck with a trailer and a couple lawnmowers who is moving from yard to yard would be subject to the same kinds of rules that semi-truck drivers had. So PUCO listened to small businesses and got a better understanding of how much it was going to cost small businesses to comply with these rules and pulled back the rules. Now, they are taking a look at if they need to be proposed at all.
Also, the optometry board rescinded some rules that they were proposing on optometrists working in certain types of retail stores where you have an optometrist available. They had some proposed rules that were going to be really onerous for the small business owners so they pulled back their rules as well.
We work with the Department of Commerce regularly. Commerce interacts a lot with business in Ohio.
We are going to have multiples of successes again. I think some of them are going to be as simple as one director talking to another to solve a problem and not having a rule change or going to the legislature. I think we are going to see law changes in cases in which we did with SB 73. I also think that the attitude of the employees working at our agencies and how they interact with business will change. We are going to require any agency that has direct contact with the public to go through specialized customer service training so that they have a better interaction. I think we are going to have a lot of opportunities where we will see CSI in action and we’re going to see the successes of it.
I think that CSI and regulatory reform is an ongoing process though. It is a culture shift and requires a change in attitude on an ongoing basis. Each of our agencies will be mindful of the impact of what they are doing. Our best mark of success will be when we hear that Ohio is easier to deal with and when we know that Ohio is becoming a state that other businesses are looking to when they are ready to expand or relocate.
TBJ: Are there any other issues that you would like to discuss?
MT: Part of what was in the executive order and part of SB 2 was that we would establish a small business advisory council. I will appoint five members and the legislature will appoint five members. We’d like to get the council in place as soon as possible because we want to make sure that we are hearing from and understanding the impact of what the government is doing on small businesses across Ohio. We’ve received a lot of applications and we are excited about it. I think that will be a very important part of regulatory reform going forward.
We also have a strategic plan on our website. We are going to be monitoring our own progress based on that strategic plan and we’ll be reporting to the legislature on the advancement that we are making over time as well.