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Ramsey Supports Cost-to-Business Estimates for Proposed Legislation

The lieutenant governor thinks it makes good economic sense to calculate a price tag projecting the potential costs proposed bills and regulations would have on the private sector. The idea was put forward recently in a policy brief by the Tennessee Center for Policy Research.

Tennessee House Republicans made a point Thursday of declaring their interest in identifying burdensome regulations they can lift from businesses in the state.

In the same vein, the Senate’s top lawmaker wants to add one on government: A requirement that bills under consideration in the General Assembly include an estimate of the costs they’d potentially have on Tennessee employers.

Lt. Gov. Ron Ramsey says he wants legislators and the public to be fully aware of the price of new mandates and regulations before they’re passed on to the private sector.

“Right now we’re just ignoring it and putting it directly onto business,” the Blountville Republican said. “What does this cost a business when we pass a bill?

“In the long run, it will save the state money and save businesses money” to attempt to calculate those costs up front, he said.

The idea comes most recently from the Tennessee Center for Policy Research, which released a report last week detailing why the state should crunch the numbers to determine what kind of effect legislation has on commerce and industry.

“Legislation impacts business, and lawmakers need to connect the dots on that,” said Justin Owen, TCPR’s executive director.

Democrats might not necessarily balk at the idea. But the key is making sure any system for estimating those costs is accurate, objective and avoids “garbage in, garbage out” results, said Craig Fitzhugh, the House minority leader.

The Ripley lawmaker, a banker by profession, says projections as to how legislation would affect businesses in Tennessee could indeed be useful in formulating policy. However, he’d like to see a system for doing it phased in over time to ensure the processes for collecting relevant data are reliable — and that the Office of Fiscal Review has sufficient extra staff to effectively handle the added workload.

“I would hate to start trying to do something like that and skimp on the resources and end up with some bad data that leads us to pass legislation or not pass legislation,” Fitzhugh said.

Legislators express mixed opinions about fiscal notes, the price tags that attempt to detail how much pending legislation will cost the state or yield in tax, fee or fine revenues. Those estimates can end up killing a bill if a substantial cost to government is projected — even as politicians at the Capitol often questioned the scope or accuracy of the calculations.

Lawmakers from both sides of the aisle are spending the political off-season examining business regulations and methods for facilitating job growth as they approach the legislative session that begins in January.

The governor has spent his summer traveling the state looking for feedback and ideas about job growth. Meanwhile, House Republicans have begun meeting with small business owners to discuss their perceptions of problematic and unnecessary regulations at both the state and federal level in Tennessee, and Democrats from both chambers are embarking on a jobs tour later this month.

The biggest gripes from business owners center on regulations which they say are too stringent — such as the one the federal government sought to enforce when it raided Gibson Guitar Corp. in Nashville and Memphis last month for allegedly possessing illegally obtained wood from a foreign country.

While the state has control over only Tennessee regulations, Ramsey wants the federal government to account for its actions, which he says at this point appear to him a stark and possibly politically motivated example of regulatory abuse.

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