The push to reduce our regulatory burden has picked up steam in the states, and even Washington, D.C. Will Mississippi join the mix in 2020?
Regulations are restrictions written in Mississippi code. Some are statutory, some are administrative. And these regulations often operate in the dark. We know Mississippi has a code book that consists of 9.3 million words and 117,558 restrictions, but that is only because of the work of James Broughel and Jonathan Nelson at the Mercatus Center at George Mason University.
Why does this matter?
Regulatory growth has a detrimental effect on economic growth. We have a history of empirical data on the relationship between regulations and economic growth. A 2013 study in the Journal of Economic Growth estimates that federal regulations have slowed the U.S. growth rate by 2 percentage points a year, going back to 1949. A recent study by the Mercatus Center estimates that federal regulations have slowed growth by 0.8 percent since 1980. If we had imposed a cap on regulations in 1980, the economy would be $4 trillion larger, or about $13,000 per person.
On the international side, researchers at the World Bank have estimated that countries with a lighter regulatory touch grow 2.3 percentage points faster than countries with the most burdensome regulations. And yet another study, this published by the Quarterly Journal of Economics, found that heavy regulation leads to more corruption, larger unofficial economies, and less competition, with no improvement in public or private goods.
What are we seeing throughout the country?
In Arizona, Gov. Doug Ducey has issued a new executive order requiring three regulations to be eliminated for every new regulation created.
“Since 2015, Arizona has eliminated 2,289 regulations, saving taxpayers over $134 million,” according to the press release. “Today’s executive order also renewed a moratorium on all new regulatory rulemaking by state agencies in Arizona – the sixth year in a row the moratorium has been issued. Agencies may seek exceptions for limited reasons, such as protecting public health or safety, advancing job creation or economic development, or reducing or eliminating burdens or government waste.”
Prior to Ducey’s three out/ one in executive order, the standard had been two out/ one in. The Trump administration issued such a regulation shortly after his inauguration in 2017. In three years, we have seen a 3.5 to 1 ratio when it comes to a reduction in significant regulatory actions. This has eliminated over $50 billion in regulatory costs, according to the administration.
Idaho is the gold standard
In the past year, Idaho has cut 75 percent of its regulationsaccording to Gov. Brad Little’s office to become the least regulated state in the country. Their regulatory count is now just 41,000 restrictions (compared to Mississippi’s 117,000+).
Idaho was in a unique situation because the state legislature essentially repealed their entire state code book when the legislature adjourned without renewing the regulations, something they are required to do each session because the state has an automatic sunset provision. That gave Little’s office the ability to review every regulation and decide what should stay and what could go. The legislature will now have the ability to give approval to the governor’s new administrative code.
Idaho found itself in this position because of an automatic sunset in its law; something that is usually renewed but was not in 2019.
What can Mississippi do?
Mississippi can – and should – join the regulatory cutting game. Here are three actions we can take this year:
– Require each agency to conduct an audit of their own administrative code.
– Require that two regulations be removed from the administrative code for every new regulation that is proposed.
– Enact a sunset provision on every administrative code that requires the legislature to decide whether each regulation should stay or go.