A commission examining ways to improve Maryland’s regulatory environment called Tuesday for the largest restructuring of the state’s government since former Gov. Marvin Mandel overhauled the executive branch 45 years ago.
The recommendation was part of the first report from a regulatory-review panel Gov. Larry Hogan (R) appointed this year to help make the state more business-friendly.
The work group, which held six hearings across Maryland over the past several months, also called on the state to improve its customer service, expand its use of electronic filings and allow developers to trade pollution credits with farmers as a way to provide flexibility in reducing pollution runoff.
Most of the recommendations in the report focused on how state agencies interact with businesses and professionals seeking licenses, permits and plan approvals. Next year, the commission plans to conduct a comprehensive review of actual regulations before releasing a second round of proposals.
“While citizen input did provide some specific regulations for review . . . the commission found that Maryland’s current agency and regulatory structure is a far bigger impediment than any single regulation,” the report said.
The work group said it discovered a “compelling systemic problem,” with overlapping regulatory authority and poor communication among agencies that often leads to unnecessary delays and costs for applicants.
The commission said Hogan should look for opportunities within the government to eliminate duplicative responsibilities and functions, similar to what Mandel (D) did when he combined 248 agencies into 11 executive departments.
“Just as the state was at a crossroads in 1969 and 1970, Maryland finds itself in a similar situation,” the report said.
The commission also called on Hogan to create a customer- service operations center that would help businesses and individuals navigate permitting and licensing processes. The program should include a call center, a Web site and a dedicated staff, the report said.
It said Hogan should also issue an executive order establishing customer-service standards that would require state agencies to treat individuals with courtesy and respect, focus on results rather than processes and provide opportunities for voicing concerns.
Additionally, the commission recommended that the state designate a lead agency to coordinate regulatory processes for projects that require oversight from multiple government divisions and set firm time limits for reviewing applications.
“When businesses and individuals get answers in a timely fashion, it enhances regulatory predictability,” the report said.
The commission also proposed implementing a system of “nutrient trading” that would allow developers to calculate how much their projects would pollute the Chesapeake Bay watershed and then pay farmers to reduce their nutrient runoff by at least the same amount.
The concept, which the group described as a “market-based approach to reducing pollution,” would be similar to cap-and-trade programs proposed for reducing carbon emissions. The Obama administration and the White House Council on Environmental Quality have endorsed nutrient trading, according to the report.
Among its other recommendations, the commission said Hogan should direct all state agencies to maximize their use of electronic filing methods and review the state’s continuing-education requirements for professional licensing to determine which could be eliminated without posing a significant risk to the public.
Regulation advocates have been skeptical of the commission’s makeup and work, and they have expressed concerns that Hogan wants to roll back important protections for workers, consumers and the environment.
“Certainly it makes sense to simplify wherever we can, but we caution that this is something that should be done not with an eye toward wholesale revamping, but right-sizing and fine-tuning so we’re not making cuts to things that protect consumers and taxpayers,” said Charly Carter, director of Maryland Working Families, an advocacy group.
Many regulation advocates have challenged the notion that Maryland is a tough place to do business, saying companies benefit from the state’s relatively high incomes, highly educated workforce and location along the Northeast corridor.
Some have also said the commission, made up of six corporate executives, three business consultants and a farmer, lacks balance. They say the panel should include legislators and regulators from state agencies.
Hogan’s staff has said that the composition of the panel is perfect, considering that its job is to identify problems with the regulatory environment and recommend solutions.