Proposed Office of Economic Analysis Giving Businesses Sign of Hope

This is the monthly column of the Valley Industry & Commerce Association More often than not we use this space to criticize the City of Los Angeles for its business-unfriendly practices, but city officials have finally given the business community a sign of hope. Over the past several months the city has taken steps to do something that would give the business community a stronger voice in the legislative process – establish an Office of Economic Analysis. The idea is modeled after a similar office in the City/County of San Francisco, which evaluates the economic impact of legislation. The motion (introduced by Council President Eric Garcetti) that will lay the groundwork for the Office of Economic Analysis was approved by the City Council in November. It called on the City Legislative Analyst (CLA) and the City Administrative Officer (CAO) to a draft a report outlining how and where to set up the new office. The Office of Economic Analysis would prevent the city from passing ordinances that hurt businesses and inhibit economic growth. Economists would be charged with evaluating the effect on businesses, citizens, job creation and other economic indicators. A report has been drafted by staff of the CLA and CAO and is currently being reviewed by the department heads, according to Garcetti’s office. The Council President would like to see the report go before the City Council as soon as possible, but a timeline has yet to be announced. Frequently late to the table on issues affecting the business community, the city is being proactive with creation of the Office of Economic Analysis and members of the state Legislature appear to be taking note. Valley Assemblymember Felipe Fuentes has introduced Assembly Bill 2529, which would require state agencies to assess cumulative and individual impact of new regulations; similar to what is being considered by Los Angeles for its ordinances. AB 2529 requires the independent state auditor to help state agencies review new and existing regulations to determine their impact on “taxpayers, utility rate payers and the competitiveness of California businesses.” The bill is based on an executive order issued by President Bill Clinton in 1993 that called for an economic analysis of proposed regulations that would consider cost-effectiveness, technological feasibility, whether the implementation timeline is realistic and if there were other more cost-effective options not recommended. Proponents of the bill are noting its importance in spurring economic recovery and job creation in the state. California’s burdensome regulations are not only hurting its ability to recover from the recession, but continue to drive businesses out of the state. The actions being taken by Los Angeles and the State of California are important for both governments to repair their reputations for being unfriendly to the business community. The Office of Economic Analysis and AB 2529 will ensure the economic impact of legislation and regulations are carefully considered before decisions are made that could be damaging to businesses. Do you think the city’s Office of Economic Analysis will be effective? Should the state consider legislation in the same way it could require state agencies to review regulations? E-mail your responses or thoughts about the column to [email protected].