Watchdog says environmental rules aren’t discouraging business

While there is growing sentiment at the Capitol that excessive regulations are slowing job growth here, there’s no evidence that Connecticut’s rules governing environmental protection are one of the culprits, according to the state’s chief environmental watchdog.

But Karl Wagener, executive director of the state Council on Environmental Quality for the last 26 years, did concede this week that while he believes the environmental permitting standards are reasonable, slow processing of permit applications has been a longstanding problem in state government.

Wagener drafted a memo challenging portions of a recent University of Connecticut report that concluded the state could reverse most of its small business losses from the decade just prior to the last recession by easing the burdens that make it one of the most regulated states in the nation.

The author of the article, which ran in the fall issue of The Connecticut Quarterly, said he didn’t dispute Wagener’s assertion, but he said the state’s regulation-heavy status isn’t due to specific rules involving the environment, labor, health care, occupational licensing, land use, eminent domain or any other particular category.

Rather, the article argued that the totality of regulations here, particularly when juxtaposed with burdens in other states, left Connecticut ranked 43 out of 50 states, with 1 being the least restrictive.

But Wagener noted that the foundations of the UConn article were two regulatory indices that drew data from a 2009 study published by the Mercatus Center at George Mason University.

And while it scored all 50 states on nearly 200 different type of regulations, none fell directly into the environment category.

About 5 percent of the regulation analyzed were tied to land use rules. And while those policies can affect open space, farmland preservation and road and other infrastructure growth, not all of them specifically affect environmental issues, Wagener said. In addition, those regulations that most affect the environmental in Connecticut are set at the municipal level, while the Mercatus Center study that UConn relied upon only surveyed state regulations.

With the exception of a few “smart growth” statutes, very little state legislation drives environmental policy at the municipal level, he said. “It’s not a very heavy state hand.”

What does it mean in terms of Connecticut businesses?

“We simply don’t have any information that documents that Connecticut’s environmental regulations are overly burdensome on businesses compared with other states,” Wagener said.

The UConn report did note that Connecticut has “numerous endangered species statutes,” but Wagener said didn’t add up.

“Connecticut is notable for having a weak, seldom-used endangered species law that is triggered only by state spending on a project,” he wrote in a Sept. 16 memo to the council. Subsequent research showed that the Mercatus Center no longer cites “endangered species” in its 2011 update of its study, he added.

Wagener noted that proposed stormwater permit regulations for projects that disturb more than five acres do contain requirements related to endangered species, but that isn’t on the books yet.

“But that doesn’t mean the process is all good,” he added. “We would never say the status quo is perfect. We are always looking for ways these regulations can be improved.”

UConn economist Stephen Lanza, publisher of The Connecticut Economy, said Wagener’s points are well-taken, but added that while the article cited examples of environmental and other regulations, its conclusion was that the total weight of all regulations in Connecticut–not those from any one category–is the problem.

“You can’t separate out the independent effects of all of these things,” he said. “Together they certainly create a general, overall environment that is stifling to small business.”

Wagener and the two co-chairmen of the legislature’s Environment Committee all described the state’s environmental regulations as fairly comparable to those in most other states.

But they also agreed that the state Department of Energy and Environmental Protection has a longstanding problem that understandably shifts critics’ focus onto environmental regulations.

“The problem for a long time has been the time it takes to go through the permitting process,” said Rep. Richard Roy, D-Milford.

“Implementation is so erratic and delayed that it is negatively impacting business,” added Sen. Edward Meyer, D-Guilford.

But Meyer added that the department “has been decimated” over the past decade by staff lost to retirement incentive programs used to close budget deficits, as well as inadequate funding and staffing in general.

There have been concerns raised for years about backlogs in permitting reviews tied to sewage disposal and water diversion, Wagener said. “But I think it’s incontrovertible,” he added, “that these backlogs are due to having too few people.”

Even concerns raised by the state’s chief business lobby, the Connecticut Business and Industry Association, were that regulations were enforced inconsistently, not that the rules were particularly excessive.

DEEP spokesman Dennis Schain said the department is in the second year of an ongoing review of its permitting process, and also is investigating new technology options to accelerate the work.

“Like most government agencies, from the federal government down to your local town department, we’ve had reductions in staff,” he said. “These are difficult times.”