Small businesses, non-profits tell how bureaucracy costs them time, money

TRENTON – Representatives of non-profits and small businesses told a state panel today how regulatory bureaucracy hurts them, especially in a down economy.

“I call it death by a thousand pinpricks,’’ said Laurie Ehlbeck, state director of the National Federation of Independent Business.

The state Red Tape Review Commission, led by Lt. Gov. Kim Guadagno, took public testimony at Thomas Edison State College here about rules that the witnesses said cost businesses and non-profits time and money.

Ehlbeck said small businesses employ more than half of the state’s work force but carry a regulatory burden that is about 60 percent more than what large firms have to shoulder.

She said companies with 20 or fewer employees spend approximately $7,000 per worker in order to comply with mandates.

Environmental regulations that are inconsistent across agencies are a main complaint that she said she hears.

“We have equipment sitting doing nothing because we’re waiting for a permit,’’ she said in urging the commission to develop strict time limits on the permit process.

Guadagno said the commission, empanelled by Gov. Chris Christie in September, already has cut red tape and streamlined government.

Among other things, she said that the Board of Public Utilities now issues orders online as well as in written form; boards offer license renewals online; and licensing procedures for professionals such as therapists, psychologists, and veterinarians have been streamlined.

“Technology is the enemy of bureaucracy,’’ she said.

Problems of non-profits

But if small businesses are overly burdened by redundant and outdated rules, non-profits are particularly at risk, according to witnesses.

Linda Czipo, executive director of the Center for Non-Profits, thanked the commission for broadening its scope to include non-profits, which she said employ about 288,000 people in New Jersey, roughly 7 percent of the state work force.

She said that while non-profits save taxpayers untold dollars by providing tourist attractions, environmental protections, and a host of other benefits, their various missions are endangered by what she called piecemeal, fragmented rules.

In particular, an improved contracting system would improve oversight and service delivery while freeing agencies of having to cope with minutiae at a time when the funding pool for non-profits is shrinking, she said.

“We’ve had members talk to us about spending $2,000 in copying costs to submit applications because they can’t be done electronically,’’ she said.

“Of course we understand we have to keep people safe but there has to be a better way,” she said. “Can we focus more on outcomes and not on how many pencils are we buying this week.”

And Roseann Weber, regional vice president of the Jersey Shore Region of the American Cancer Society, told a story to illustrate how antiquated raffle laws hurt non-profits’ pocket books at a time when every dollar is precious.

She told the commission that two of their chapters, one in Ocean County and the other in Monmouth, each wanted to hold a 50-50 fundraiser. The fact Ocean County’s chapter got its  approval first prevented Monmouth from obtaining one. 

She urged the commission to pursue adoption of a rule that would allow one 50-50 per county as opposed to one per organization.

“We have a situation that’s making our jobs harder and negatively impacting our fundraising,” she said.

Small businesses, non-profits tell how bureaucracy costs them time, money