Washington has few equals in piling regulations on employers
October 31, 2019
OLYMPIA–Much of the talk about our state's business climate has to do with the tax burden–and rightfully so. For example, early in this year's legislative session the governor's budget director told our Senate budget committee that providers of professional services (such as veterinarians and accountants) are undertaxed, which is why Governor Inslee was proposing to hit them with a huge increase in the state B&O (business and occupation) tax they pay. Sure enough, Inslee's political allies used their control of the Legislature to make it happen.
As anyone who has run a business knows, the government-related costs of doing business go beyond paying taxes to include things like workers' compensation premiums. It also costs money to comply with the regulations imposed by government, and this week I was reminded just how out-of-control the regulatory situation in Washington is. A national ranking done by George Mason University found there are a whopping 17,294,420 words in our state's regulatory code, which is more than all but two states, and 196,028 separate regulations, which is more than all but five states. Not surprisingly, the state Department of Labor and Industries leads all other agencies in the number of restrictions ("shall", "must", "may not", "prohibited" and "required").
It's unbelievable that our state of 7.5 million people falls behind only New York, a state of 20 million, and California, with its 40 million residents, in the sheer volume of regulations hanging over employers. And it comes as no surprise that those two states, along with Ohio and Illinois, which rank No. 4 and No. 5 behind Washington, have seen a net loss of residents to other states in the past decade. Besides a massive regulatory code, each also has a state income tax to drive people away!
The three states closest to ours in population are Massachusetts, Arizona and Virginia (which is home to the university that did the research); all have significantly smaller regulatory burdens.