Most states with the least regulations need to get off autopilot – Marin Independent Journal

One reason the American economy offers less opportunity than many people expect is that modern democracies, for all their merits, create and enforce too many rules over time. Chief Justice Neil Gorsuch’s new book, “Over Ruled,” makes a similar case, citing my estimate that it would take more than three years just to read all of our federal regulations.

Navigating so much red tape means businesses spend less on expansion, staffing, or salary increases. It stifles and derails entrepreneurship. Laws created by Congress play their part. So do regulations constantly being created by hundreds of regulatory agencies across the country. Last but not least are state and local regulations. While ignorance of the law may not be a valid defense in court, this layered cake of regulations makes ignorance inevitable for the average individual or small business owner.

Letting regulations build up over time is the default setting. Legislators like to create new agencies, give them vague missions, and move on. When you’re campaigning for your job every few years, set-it-and-forget solutions are very attractive. But good governance requires active management.

The Mercatus Center’s ongoing State RegData project shows which states are piling up the most regulations. More importantly, we know which states are paying more than lip service to the problem, bucking the trend and eliminating red tape that is no longer needed or desirable. Our new index measures regulations on the books for 48 states (we were unable to include digitized regulatory codes from Arkansas and West Virginia).

The most regulated state is California, followed by New York, New Jersey, Illinois, and a surprise: Texas. Without a proactive stance to prevent this, regulations are piling up in both red and blue states.

The state with the least regulations is Idaho, followed by South Dakota, North Dakota, Montana and Alaska.

Idaho wasn’t always this way. Six years ago, it had more than 72,000 statutory restrictions. Today, it has just 31,497. Gov. Brad Little’s administration did this deliberately and proactively, combining elements of the two most effective ways to curb the natural tendency toward statutory accumulation: statutory budgeting and statutory sunsets.

Several other states, including Iowa, Missouri, Montana, Nebraska, Ohio, Oklahoma and Virginia, have reformed their regulatory processes in recent years.

A “regulatory budget” is like a household budget, reduced to two essential elements: quantifying how much you spend and then setting goals to control that spending. Idaho tracked “spending” by simply counting the regulatory restrictions within the regulatory code text. Missouri, Ohio, and Virginia have used similar strategies. Other budgets attempt to monetize the costs of regulation and add them up.

With that in mind, the next step is to set a goal. Virginia and Ohio used a 25 percent reduction. Others use a “pay-as-you-go” approach, where new regulations are offset by eliminating or reducing the costs of old regulations (which are likely outdated anyway). Idaho used a one-in, two-out approach. For every new regulatory restriction, two or more had to be eliminated.

Idaho’s second approach was a variation on regulatory expiration that Little called “zero-based regulation.” Regulatory expiration means that regulations automatically expire unless they are intentionally extended. The idea is common for legislation, but most regulations do not have built-in expiration dates. Idaho now places the burden of proof on its agencies, with all regulations expiring after five years unless the agency can justify keeping them in place.