The Leaflet: Your House May Need a Good Regulatory Cleaning
The Arkansas Legislature approved the elimination of hundreds of unnecessary regulations, which will help to usher in economic growth and job creation.
In a major step to benefit businesses and consumers, Arkansas has significantly reduced the regulatory burden it imposes on its citizens. This month, the Arkansas Legislature approved the elimination of more than 800 regulations that it determined to be outdated, unnecessary, or duplicative.
At the press conference announcing this much-needed regulatory cleansing, Republican Gov. Asa Hutchinson stood next to a small mountain of 15,000 pages of paper that represented the hundreds of now-invalid regulations. The stack was nearly as tall as Hutchinson himself!
Signed into law in 2017, Act 781, also known as the Housecleaning Bill, requires all state agencies to review every regulation on the books and then identify all obsolete rules. In total, state agencies assessed nearly 3,400 regulations.
“Cleaning up Arkansas government and making it work better for the people is something we are always striving to do,” said the bill’s sponsor, state Rep. Jim Dotson (R-Bentonville). “With Act 781, Arkansas just took a huge step toward that goal by cutting bureaucratic red tape almost 25 percent … This will reduce the hassle of government for all Arkansans, by making government more straightforward and less complex.”
Arkansas’ repeal of hundreds of redundant regulations will certainly produce a more streamlined, less stressful bureaucracy, benefitting government workers and Natural State residents. Fewer regulations will usher in economic growth and job creation.
Federal regulations have, on average, dragged down the annual growth rate of the U.S. gross domestic product by 0.8 percent since 1980, according to a Mercatus Center study. If regulations had been held constant at levels observed in 1980, the U.S. economy would have been about 25 percent ($4 trillion) larger than it actually was in 2012.
The Housecleaning Bill is a great model for other states to adopt, but states shouldn’t stop there. States should also enact the Regulations from the Executive in Need of Scrutiny (REINS) Act. Under the REINS Act, any agency that proposes a regulation that would cost more than an agreed-upon monetary threshold must modify the rule to reduce its cost, pull back the rule, or request legislation be passed authorizing the rule. With REINS in place, legislators can hold a public hearing and/or request an independent economic impact analysis of all proposed rules.
In 2017, Wisconsin passed the first state-level REINS Act, which mandates all proposed regulations estimated to have more than $10 million in implementation and compliance costs over a two-year period undergo modification or review. This year, Tennessee lawmakers introduced a REINS Act in both the state’s legislative chambers that would establish mandatory review of a proposed agency rule that would cost more than a $1 million over a three-year period.
The one-two punch of a REINS Act and a Housecleaning law would serve as a prospective and retrospective measure that could ensure the regulations put in place by unelected bureaucrats do not hamper the economy or constrain personal liberty. It is important that legislators be held accountable for the promulgations, good or bad, of state agencies, and these reforms would accomplish that goal while also ensuring government doesn’t unnecessarily obstruct economic growth.
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