Red Tape Strains Colorado Business Community, Hindering Growth and Expansion

As the Democrat-controlled legislature and Governor Jared Polis continue to push forth a wave of new regulations in Colorado, the state's business community finds itself grappling with mounting concerns. The burden of excessive regulation has become the primary issue faced by business leaders, replacing the previously predominant problem of worker shortages, according to the Colorado Chamber of Commerce's 2023 Business Leaders Survey.

Out of the 156 business leaders surveyed from across the state, an alarming 48% pointed towards regulations as their most significant concern. This figure has witnessed a substantial rise from last year's 26%, placing regulations at the forefront of their worries. In contrast, a mere 11% of respondents cited worker shortages as a pressing issue.

Labor and employment requirements emerged as the most burdensome regulations, with 73% of business leaders expressing their concerns. These requirements include initiatives like paid leave, which have a direct impact on operating costs and staffing resources. Environmental regulations were the second highest worry, cited by 46% of respondents, followed closely by new regulatory fees at 40%.

Additionally, an overwhelming 64% of business leaders indicated that the state government imposed the greatest regulatory burdens, surpassing both federal and local governments.

The Colorado Family and Medical Leave Insurance program, approved by voters in November 2020, stood out as the costliest regulation according to 57% of respondents. This program places significant financial strain on businesses, further adding to their regulatory burdens. Paid sick leave mandates and wage transparency rules were nearly tied in terms of impact, with 27% and 26% of respondents considering them to be top concerns, respectively.

The implementation of paid sick leave in 2020, along with the expansion of eligible uses of sick leave in August of that year, coupled with the enactment of the wage transparency law in 2019, has only exacerbated the regulatory challenges felt by Colorado businesses.

The survey reveals declining optimism among Colorado business leaders in comparison to last year. Six out of ten respondents believe that the state's economy is headed "on the wrong track," a notable increase from the 53% recorded in the previous year. While 83% of respondents maintained or expanded their workforce over the past year, a slight improvement from the 78% in 2022, fewer business leaders expect to increase their workforce in the upcoming year. This decline hints at the dampening effect that excessive regulations have had on business growth and expansion.

The findings of the survey paint a worrying picture for Colorado's business community. Excessive regulatory burdens, particularly within labor and employment requirements, environmental regulations, and new regulatory fees, are hindering business operations and stifling growth.

Given the current trajectory, it is crucial for policymakers to reassess the regulatory landscape and ensure a business-friendly environment that encourages innovation, investment, and job creation. Failing to address these concerns risks further stagnation and an unfavorable business climate within the state.