State and federal bureaucracies have dramatically increased their power over the past few decades. Regulations crafted by the numerous departments and agencies of executive branches have had wide-ranging impacts on businesses across the United States and are increasingly affecting overall economic growth and job creation.
Economic growth in the United States was reduced dramatically by unnecessary and costly regulations imposed by the Obama administration. According to a 2016 study by the Mercatus Center at George Mason University, the U.S. economy been slowed on average by 0.8 percent per year since 1980 due to the cumulative effects of regulation. The study estimates if the regulatory burden placed on the economy had been held constant at levels observed in 1980, the U.S. economy would have been about 25 percent larger than it was in 2012.
More attention needs to be paid by legislators to the effects regulatory laws have on businesses and workers. A new law recently passed in Wisconsin, the Regulations from the Executive in Need of Scrutiny Act (REINS Act) could serve as a model for other states to follow. The Wisconsin REINS Act aims to limit the growth of the state’s regulations and bureaucracy by requiring the legislature to give final approval to any state regulation that has an economic impact of $10 million or more within its first two years. Gov. Scott Walker (R) signed the Wisconsin REINS Act on August 9, 2017.
Tennessee is the most recent state to propose legislation modeled after the REINS Act. Tennessee’s proposal would limit the growth of state regulations and bureaucracy by requiring the state’s legislature to give final approval to any state regulation that has an economic impact greater than $1 million over three years.
In a Policy Tip Sheet on state REINS proposals, Senior Policy Analyst Matthew Glans and Policy Analyst Timothy Benson outline why state legislators should be concerned about the growth of the regulatory state and how REINS laws could help restore regulatory sanity.
There is no proposal better suited for cutting back on the scope and power of government than REINS laws. They give lawmakers the power to limit the power of unelected bureaucrats while leaving federal agencies appropriate flexibility to implement new regulations. It is important to remember that these proposals do not prevent agencies from making new regulations; they are simply designed to ensure new rules that are projected to have a major impact on the economy receive appropriate scrutiny from elected officials before being enacted.
What We’re Working On
Research & Commentary: West Virginia Bill Would End Certificate of Need
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines a West Virginia plan to repeal its certificate of need laws. “If approved, this legislation would significantly change the health care market in West Virginia, opening up the state to new health care services, improving the quality of care, reducing costs, and making the state a better target for increased health care investment,” wrote Glans. Read more
Budget & Tax
Policy Tip Sheet: States Should Limit Civil Asset Forfeiture
In this Policy Tip Sheet, Matthew Glans examines civil asset forfeiture and outlines several ways states can improve their forfeiture laws. “Lax civil asset forfeiture laws provide an incentive to seize for law enforcement agencies. States should strengthen the standard for seizure in court from the preponderance of the evidence to either clear and convincing evidence or a conviction,” Glans wrote. Read more
Empower Georgia Parents and Students with Education Savings Accounts
In this Research & Commentary, Policy Analyst Timothy Benson writes about a proposal to create the Georgia Educational Scholarship Account Program, an education savings account (ESA) program that would pay for tuition at private and parochial schools, tutoring services, educational therapies, and online-learning programs, among other things. Enrollment in the program during its first year would be 0.5 percent of the state’s total public school enrollment, and would increase by another 0.5 percent each year thereafter. The ESAs would be funded to 100 percent of the system-wide average per-student amount of state funds for a student’s resident school system. Read more
Energy & Environment
Premature Closure of Navajo Generating Station Would Put Regional Power Supply at Risk, Devastate Native Communities
In this Research & Commentary, Heartland Research Fellow Isaac Orr and Policy Analyst Timothy Benson discuss plans to close the Navajo Generating Station (NGS) coal-fired power plant, located on the Navajo Nation Reservation near Page, Arizona. The current plan would prematurely close the plant in December 2019. NGS employs more than 400 full-time staff, of which more than 90 percent are members of the Navajo Nation. Orr and Benson argue the premature closure of the Navajo coal-fired power plant would drive up electricity costs for families, businesses, and manufacturers while providing few, if any, environmental benefits and causing serious economic harm to the Navajo Nation, which receives nearly half its revenue from NGS royalties. Read more
From Our Free-Market Friends
Advancing Sensible Justice in Tennessee
This new study from the Beacon Center of Tennessee contains a new package of ideas on advancing sensible justice reform in Tennessee. The package features stories of people affected by the current model and focuses on problems related to the state’s juvenile justice system, occupational licensing laws, and incentives.