Governor’s Office of the Small Business Advocate Releases Study Of Costs of State Regulation To Small Businesses In California

Study Provides Policy Makers With Tools to Encourage Small Business Growth In California

The Governor’s Office of the Small Business Advocate today released a study of the aggregate cost of state regulation to small businesses in California. The study was commissioned by Governor Arnold Schwarzenegger in 2006 when he signed Assembly Bill 2330 by Assemblyman Juan Arambula (I-Fresno) and was completed by Sanjay Varshney Ph.D., the Dean of Business Administration at California State University, Sacramento, and Dennis Tootelian Ph.D., Director of the Center for Small Business at the same school.

“This study sheds light on the realities of regulations on small business in California, which is exactly what the Governor hoped for when he commissioned it,” said Marty Keller, Director of the Governor’s Office of Small Business Advocate. “Small businesses are the backbone of California’s economy and this Administration is committed to working with small businesses and the legislature to ensure that they are made a priority as we move forward with regulations.”

The study, the first of its kind to assess regulatory costs on a state level, parallels studies commissioned by the federal Office of Advocacy in the Small Business Administration. For the first time state policy makers, as well as small businesses, can measure the average effect of regulatory costs. The study can be downloaded from the Small Business Advocate’s Web site.

One of the recommendations put forward by participants in the Governor’s Conference on Small Business & Entrepreneurship last November dealt with finding ways to identify and streamline the impact of regulations on small businesses.

Small businesses comprise 98 percent of all enterprises in the state and provide 52 percent of all employment. Under Governor Schwarzenegger, small businesses participation in state contracts has met or exceeded the Governor’s Executive Order calling for 25 percent. Small businesses, on average, receive nearly $3 billion of the state’s business and the Governor has made certain that small businesses will be included as the state moves forward in its efforts to meet its greenhouse gas emission reduction goals.