Georgia’s regulatory code has grown steadily since the Secretary of State’s office began tracking rules and regulations in 1965. While the General Assembly is tasked with passing laws, the majority of Georgia’s regulations actually come from unelected state employees working in the many agencies that make up Georgia’s executive branch. Regulations are enacted for several reasons including public safety and quality control, but it is often unclear whether they practically achieve their policy goals or generate benefits worth the costs they impose.
Worse yet, without being subject to periodic review, regulations tend to build up unchecked over time, which has negative impacts on industry and economic growth in the jurisdictions they impact. In particular, small businesses experience negative results. Small business owners, without teams of lawyers, CPAs and lobbyists, frequently find themselves alone to navigate an outdated and confusing regulatory environment. This creates economic strain and distorts the decision-making process.
The federal government’s vast landscape of regulation has been shown to have negative impacts including higher poverty, lost jobs and inflation. Manufacturers also bear a disproportionate share of regulatory burden, with one analysis showing that the average American manufacturer pays $29,000 annually per employee – more than double what the average U.S. company pays. Small manufacturers face an even greater burden. The highest regulatory costs among U.S. firms – an estimated $50,100 per employee per year – are incurred by manufacturers with fewer than 50 employees. It was also estimated that U.S. regulation alone would account for the ninth-largest economy in the world.
Naturally, unnecessary regulation from the state only compounds these issues.
A recent study of the regulatory landscape across America ranked Georgia as the 26th-most regulated state. Between the U.S. Code of Federal Regulations and the Georgia Compiled Rules & Regulations, there are over 1.2 million combined regulatory restrictions on the people of Georgia. Regulatory restrictions, different from total number of regulations, refer to the number of prohibitions and obligations found in regulatory codes. These are determined by occurrences of the words and phrases “shall,” “must,” “may not,” “required” and “prohibited.”
A more troubling issue than Georgia’s middle-of-the-pack ranking in regulatory burden is the continued growth of its state code. Since 1965, Georgia’s code has grown at an average rate of 13 percent per year. Aside from the Department of Labor’s reform effort in 2013-2014, state agencies, boards and commissions have only repealed more regulations than were enacted twice, in 2016 and 2021.
In 2019, Gov. Brian Kemp established the Georgians First Commission, which, as part of its purpose, reviewed the state’s regulatory code with the intention of cutting inefficiencies. According to research provided to the Commission by Esper Technologies, Georgia’s code contained 18,160 regulations, over 54 percent of which were in need of review due to being out of date or containing references to repealed regulations.
While many of Georgia’s rules and regulations are passed down by federal mandate, there is more immediate opportunity to reduce regulation at the state level.
The following are breakdowns of which public policy areas and industries are most heavily targeted by Georgia’s regulations and how those regulations compare to state averages.
Many states have addressed their bloated regulatory codes by taking measures to cut unnecessary rules, implement guardrails before enacting overly costly regulations, ensure reviews at regular intervals and create an environment that disincentivizes unchecked bureaucratic growth.
A common start to this process includes setting a period for the reviewing of each executive agency’s regulations and cutting ones deemed outdated, unnecessary or too costly. This would provide not only an opportunity to reduce regulatory burdens, but also for transparency as the government incorporates feedback from private citizens and primary stakeholders. Agencies should affirm the necessity of each existing regulation on the basis of its relevance and benefits. In doing this, Georgia should set a percentage goal for reduction in regulatory reduction over a set period of time.
Georgia should also consider enacting sunrise and sunset provisions to address the inertia of expanding regulations. A sunrise provision involves a cost-benefit analysis of a proposed regulation, and triggers a legislative review if that regulation is projected to exceed a certain industry impact. With a sunset provision, agencies are required to review an existing regulation after a period of time and justify its continued existence. These provisions force agencies to be as cost-effective as possible when proposing new rules and disallows the continuation of irrelevant and outdated regulations.
States have seen success with the implementation of a regulatory economic analysis, which typically includes a cost-benefit analysis of all stakeholders impacted by a given regulation. Some agencies are required to conduct and publish cost-benefit analyses at different points in the rulemaking process, which ensures transparency and encourages feedback. This is especially important in relation to a sunrise provision. It is also important to ensure that any cost-benefit analysis performed includes the final rule, rather than solely the proposed rule.
At this point, Georgia has plenty of work to do in reining in regulations. A 2024 report published by the Cicero Institute ranks states based on their implementation of reforms including sunrise and sunset provisions, cost-benefit analyses, mechanisms to review existing regulations and venue restrictions (the ability of citizens to challenge a regulation in the same court where they might be charged for violating it). Georgia was tied for last in this ranking along with New Mexico and Pennsylvania.
Georgia lawmakers and administrators should work to address the state’s regulatory burden and consider the successful implementation of regulatory reform in other states, both from the legislative and executive branches.