Contact: Hank Ryan, Executive Director, Small Business California, (510) 459-9683

Small Business California Responds to LAO Analysis,
Calling for Removal of “Useless” Report

San Francisco, CA—Assemblymember Kevin de León, Chair of the Assembly Appropriations Committee, today released an analysis by the Legislative Analyst’s Office (LAO) on the validity of studies by Sanjay Varshney, Dean of Sacramento State College of Business Administration, that claim extraordinary costs associated with state regulations. One study that the LAO reviewed was commissioned by the Governor’s Office of Small Business Advocate (OSBA), as required by legislation (AB 2330, 2006) that Small Business California supported.

In response, Hank Ryan, Executive Director of Small Business California, issued the following statement:

“Small Business California requests that OSBA remove the Cost of State Regulations on California Small Businesses Study by Varshney and Associates from its website due to the study’s deeply flawed methodologies and useless conclusions.

Small Business California does not take lightly our conclusion that this report should be removed from the OSBA website. However, the litany of professional critiques levied against the study has led us to conclude that it is so inferior that its continued presence on the website is contrary to the interests that OSBA was established to serve. Consider the following:

  • Today the Legislative Analyst’s Office (LAO) released an analysis of this study, concluding that “it contains a number of serious shortcomings that render its estimates of the annual economic costs of state regulations essentially useless.”
  • Dr. Frank Ackerman of Tufts University and the Stockholm Environment Institute also completed an analysis, finding the Varshney and Associates study to be “deeply flawed and shoddy economic analysis.”
  • Chris Thornberg and Jon Haveman, founding principals of Beacon Economics, said the report was “one of the worst examples of schlock science we’ve ever seen.”

Small Business California’s mission is to protect the well being of California’s 3.2 million small businesses. By maintaining the Varshney and Associates report on their website, OSBA is causing more harm than good to the interests of the state’s small businesses.”

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Small Business California is a proactive, non-partisan business advocacy organization whose only agenda is the well being of California small businesses. Working for all California small businesses for a better business environment. SB-Cal is responsive to the needs of California small business owners. Find out more at

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