(The Center Square) – Two dozen bills introduced this year in Colorado’s General Assembly would increase regulatory costs throughout the state and impact the ability to compete with other states, according to an analysis by a free-enterprise think tank.
Seven bills affecting energy and the environment and eight impacting litigation were identified by the Common Sense Institute as possibly adding significant annual costs. The organization compiled two reports in 2023 on how legislation could impact the state’s economic competitiveness.
“Accordingly, with few exceptions, the bills listed in this report will add substantial costs to businesses – costs which will of course cascade to consumers – without a clear understanding of what those costs will be, or whether they are reasonable given the societal benefits of the legislation,” the report said.
A majority of the bills included in the 2024 review haven’t had a full cost-benefit analysis, according to the organization.
“Midway through the 2024 legislative session, the quantity and pace of potential reform has continued unabated,” the 23-page report said, noting many bills could still be passed or tabled until the end of the session on May 8.
The report includes legislation failing to pass, proposed bills not yet voted on and approved bills. It emphasized bills failing to pass are included in the report as they often are reintroduced in future sessions.
The report described Senate Bill 24-159, intended to end the issuing of permits for new oil and gas wells by 2030, as “most extreme” and “effectively consigning the industry to a slow extinction.” The bill was defeated in a Senate committee.
“Other bills in this package would significantly increase regulatory oversight and penalties in ways that are likely to drive up costs and make compliance more difficult,” according to the report. “The stated aims of this legislation include improved air quality, community health and safety and the protection of vulnerable populations. That these are laudable goals, we can all agree. But clarity is lacking on the degree to which each of these measures will advance these goals, and the degree to which those improvements justify their direct and indirect costs.”
Legislation involving litigation covers a wide range of issues, including the liability of contractors, increasing the noneconomic-damage limitations of medical malpractice actions and several construction industry regulations.
“One common thread linking many of these regulations is that they appear to have been subjected to little, if any, formal cost-benefit analysis prior to introduction,” the report said. “Efforts to project marginal benefits against marginal costs are largely left to the regulatory process or will be omitted entirely. This complicates the legislative debate needed to seek balance between the two or to question whether ‘the juice is worth the squeeze.’”
The organization said regulatory costs can accumulate unless laws contain a sunset or are repealed. The financial impact of new regulations must be taken into account when added to existing regulatory costs.
“This is not to say that the legislation reviewed here is necessarily bad policy, or that it will convey no benefits,” the report stated. “In fact, thorough analysis may point to the opposite conclusion. But the persistent failure to perform that analysis is concerning.”
