Gov. Chris Gregoire signed an executive order Tuesday aimed at helping small businesses recover from the recession and simplifying the way they deal with government.

Gov. Chris Gregoire signed an executive order Tuesday aimed at helping small businesses recover from the recession and simplifying the way they deal with government.

Gregoire directed state officials to review ways to reduce state costs and streamline or eliminate regulatory procedures for the 95 percent of Washington employers who have fewer than 50 workers.

“The way out of this recession, in my opinion, is jobs,” she said. “We really wanted to take a look overall at how we could help small business.”

The state’s Commerce Department will work with business owners to develop a plan for the $20 million in federal funds available to Washington state for small business. An additional $600 million in loan funds is available for community banks.

Regarding taxes, Gregoire called for a review by the departments of Labor and Industries, Revenue and Employment Security of current practices, as well as tax and rate structures, to cut state-imposed costs. She asked that they report to her by Jan. 5.

Another goal is to protect law-abiding businesses from unfair competition from companies that pay workers under the table.

Gregoire directed state agencies to come up with ways to provide alternatives for small businesses that fall behind on taxes, including alternatives for late payment and penalty and interest waivers.

Three small-business owners joined Gregoire in Seattle for the announcement.

Jerry Gintz, vice president of the Association of Washington Accountants, said in his 23 years of experience he has seen small businesses fail mostly because of problems complying with government regulations.

“They get behind and overwhelmed with paperwork requirements,” he said. “Before they know it, the penalties are larger than the tax they owe and they just walk away.”

Michael Fagin, owner of Washington Online Weather, and Tracy Corley, a business consultant, said the most important thing for them would be to simplify regulations.

“A lot of organizations are just trying to figure out and navigate what does this mean, how do I file this,” Corley said. “The simpler the better.”

Kristi Heim: 206-464-2718 or kheim@seattletimes.com