Now that we've lived with environmental impact reports for decades, isn't it time the business community insists that state and local governments get economic impact reports before passing new laws, ordinances and regulations?
After all, new rules routinely get approved throughout California with nary a thought to how they may destroy jobs or otherwise rough up businesses.
One big example: AB 32. It was passed by the state in 2006 to reduce greenhouse gas emissions. The intent was laudable enough, but apparently the economic consequences were not seriously considered. Only two months ago, a couple of academics released a study that said when AB 32 is fully implemented, there will be a 10 percent loss in gross state output, 1.1 million jobs will vanish, California families will face increased costs of $3,850 a year and small businesses on average will see increased costs of almost $50,000.
Now, you could debate their numbers or their methodology, but the point is this: We should have had that debate on the front end. Not three years after the bill was passed.
This all came to mind last week when the chief of the Regional Black Chamber of Commerce of Southern California wrote in an op-ed in the Business Journal that California's small businesses are becoming the collateral damage of AB 32. She wrote: "Policymakers must step back and take the time to do the proper research and analysis so that implementation of climate change programs is effective and affordable."
Bingo. And the best way to force them to do that research is to mandate an economic impact report on bills, ordinances and the like. If an economic impact statement had been required for AB 32, and lawmakers had been presented with those numbers that the professors came up with, maybe they would have slowed down before they blithely rubber-stamped a bill that could wipe out 1.1 million jobs.
Likewise, I'd like to think the Los Angeles City Council would have rethought a crucial provision in its Clean Trucks Program at the Port of Los Angeles if an economic impact statement had forced the council to face up to the consequences. As it is, L.A.'s program stands to wipe out what's left of the 1,000 or so small trucking companies at the port and possibly hurt the neighboring Port of Long Beach.
San Francisco not long ago began requiring economic impact statements, and the best thing it has done is "raise awareness of the unintended consequences" of ordinances that are under consideration, said Rob Black, who is a vice president at the San Francisco Chamber of Commerce.
He added that the economic impact statements fit nicely with the city's economic development strategy. If lawmakers are aware of how any particular proposal could help or hurt certain businesses, it helps them frame that proposal in the overall strategy of attracting certain businesses. San Francisco has targeted biotech companies, and the impact statements have helped the city successfully attract some.
That's particularly important for Los Angeles, which can no longer rely on growth as a default strategy for economic development. Now that companies are leaving, the city should develop a targeted economic strategy figure out what it wants to lure and which companies it won't waste time on. A requirement that ordinances and rules go through an economic impact assessment would help illuminate that strategy.
Environmental impact statements have increased awareness of how a construction project might hurt some fish or exacerbate storm water runoff. It's time that lawmakers heighten their awareness on the front end of how any proposal may devastate an industry. Or help it.
Charles Crumpley is editor of the Business Journal. He can be reached at
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