Colorado lawmakers increase cost of running a business

Several years ago, I asked an associate what kept him awake at night as a businessman. He replied that it was not his competition or getting and retaining good staff, or even the rising costs of doing business, but rather growing and complex government regulations, where a simple misunderstanding or lack of awareness could lead to its demise.

Greg Fulton

He feared that a state agency would one day come and cite him for breaking a new law or regulation he hadn’t heard of, with penalties and fines that could force him to shut down his business. .

“I’m probably breaking a rule or a law on a daily basis and I don’t even know it,” he told me.

This small business owner is not unique. Many others fear for the well-being of their businesses and the livelihoods of their employees if those businesses shut down due to non-compliance with a specific rule. The state challenges all small business owners to be aware of all regulatory and legal changes made every year. At the same time, the business owner assumes the risks and possible consequences that might arise from inadvertently breaking a specific rule.

Each new regulation places additional stress on businesses. In particular, small businesses do not have the staff, such as full-time regulatory or HR specialists, or the resources to retain a lawyer like larger companies do, to sort out new regulations. and establish compliance processes and procedures. This responsibility rests with the owner to determine and requires them to take on the roles of lawyer, advisor, accountant, personnel specialist, etc. while trying to run his business.

During the last legislative session, there was extensive discussion and debate on several bills that included a new tariff or an increase to an existing tariff. Lawmakers have debated the value and impact these fees can have on businesses and personal portfolios.

While much attention was paid to these measures, less attention was paid to others that did not involve a direct cost, but rather increased trade expenses associated with new regulations, procedures or penalties. or modified which constitute what has been called, “regulatory drag”. This term applies to how much regulations add to the cost of doing business, harming their productivity.

Unfortunately, over the past few years in Colorado, our General Assembly and the state government have dramatically increased the body of regulations, laws, and rules, which increases the cost of doing business in Colorado, which in turn increases the cost of doing business in Colorado. results in higher prices for businesses and consumers. .

The real costs of these additional mandates are rarely quantified and if they are, they are generally underestimated. Developers tend to minimize the resources and costs associated with them. On the contrary, they stress the importance of these regulations and that their value outweighs all costs.

Even in cases where the social benefit may be significant, it cannot be ignored that these regulations increase costs, and these higher expenses must either be passed on as additional costs to customers or come at the expense of other items. including jobs.

A recent national study reported that the annual cost to our economy of excessive and expensive regulation is $ 4 trillion. This is more than triple the amount proposed to Congress for rebuildIng our national infrastructure.

The price of $ 4 trillion does not reflect its true cost either. The additional mental and emotional stress that government places on business owners is not easy to quantify, but it is likely to be substantial.

A good example of the implications of a new government mandate is Proposition 118, which passed in 2020. This is a unique family leave program, which will put 85% of Colorado employees in the state under a state-run scheme. family leave program that allows up to 12 weeks of paid family leave.

Programs such as family leave have been offered by many companies for a number of years, and some states have mandated programs. Colorado’s new program, however, is seen as a program with greater benefits than most other states or companies. This translates into higher costs for businesses in Colorado compared to neighboring states.

In 2020, the Common Sense Institute projected the impact of Proposition 118 on Colorado businesses and reported that profit margins could drop from 2% to 10%. The direct cost of the bonus – a cost shared between employer and employee – would be equivalent to an effective increase in personal income tax from 8% to 18%.

While new regulations or changes to existing ones will continue to be necessary, lawmakers and government officials must pay more attention to assessing the total impact on our state’s businesses and economy before to proceed with news. In addition, more attention needs to be paid to streamlining and removing obsolete rules and regulations.


Greg Fulton, of Denver, is the president of the Colorado Motor Carriers Association, which represents more than 600 companies directly involved or affiliated with trucking in Colorado.



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About Charles D. Goolsby

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