Several states are taking measures to curb overregulation and reduce the size of their regulatory codes. Regulations from the executive branch tend to grow in a state of inertia, creating an unnecessary burden on workers, established businesses and potential startups.
Georgia’s regulatory burden
In recent studies, the Mercatus Center ranked Georgia the 26th most regulated state, and the Cicero Institute ranked Georgia tied for last in terms of regulatory processes and procedures. If Georgia wants to build on the successes that have made it the best state for business and continue to protect businesses and consumers, it should take steps to reduce its regulatory burden. Runaway rulemaking from the executive negatively impacts economic prosperity, and without taking action, a perpetually expanding regulatory code will become the norm.
The following list summarizes different states’ efforts to cut red tape, their metrics for success and results by those metrics. Research and reviews of these kinds of policies point to a few recommended solutions for cutting regulation.
Two of the most common and recommended policies are sunrise and sunset provisions. A sunrise provision ensures that a review of a proposed rule is triggered if it exceeds certain economic costs, and a sunset provision ensures a similar review after a regulation has been in effect for a certain number of years. These measures force rulemaking agencies to be more cost-conscious about regulations and to justify their continued existence once they are enacted. Furthermore, requiring this effort on the part of bureaucracy reverses the tendency in public administration of perpetually expanding regulatory codes.
States have also seen success with the implementation of a regulatory economic analysis, which typically includes a cost-benefit analysis of all stakeholders impacted by the 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.
Setting a goal for red tape reduction is another common goal, but lawmakers must take care to use metrics that will yield results without allowing for loopholes. For example, reducing regulatory burden is not necessarily achieved by simply cutting a set number of regulations, though this can yield positive results. Regulatory burden can include more restrictive language in fewer regulations, and a reduction effort might not account for regulations added over the prescribed period. Once the proper distinctions are made, however, setting a benchmark for reduction is good practice; most states opted for 20-30%.
States that have enacted regulatory reform
The following is a noncomprehensive list of states that have enacted regulatory reform. These examples were included due to their unique features (such as Montana’s forum for public feedback) and concepts that inform popular and effective policy recommendations (such as zero-based regulation in Idaho). Many of these states have also demonstrated success both by metrics outlined in their own reform goals and by independent reviews of policy implementation.
Missouri
- Missouri Executive Order 17-03 was the culmination of “NoMORedTape,” the state’s effort to reform its regulatory environment. The order was one of the first acts of Republican Gov. Eric Greitens’ administration.
- Temporary freeze on new rulemaking, which lasted just under two months. Regulations related to public health were allowed to be submitted to the governor.
- Missouri state agencies were required to affirm that existing and future regulations satisfied specific requirements such as being essential for health and safety and having positive cost-benefit implications.
- Each agency designated an individual to oversee this review.
- Original plan was for each agency to cut regulations by one-third. Several of them achieved this benchmark.
- The Department of Transportation cut 57% of its restrictions, totaling 1,545 restrictions.
- The Department of Natural Resources cut the most restrictions; 8,873 accounted for 37% of its total.
- In total, Missouri eliminated 19,079 restrictions, about 19% of its regulatory code.
- In 2024, Missouri created a regulatory sandbox through Senate Bill 894. This bill tasks the Regulatory Relief Office with identifying unnecessary regulations that could be waived or suspended for a participating business. This will take place over a two-year period during which participating businesses must demonstrate an innovative product offering to consumers.
- The Missouri House also introduced House Bill 2579, which would have required all agencies to conduct and publish a cost-benefit analysis for final rule proposals. This bill did not pass out of committee.
Virginia
- Virginia Executive Order No. 19, “Development and Review of State Agency Relations,” was signed on June 30, 2022 by Republican Gov. Glenn Youngkin.
- This established the Office of Regulatory Management. The ORM is modeled after the federal Office of Information and Regulatory Affairs. It is one of the OIRA’s few state-level equivalents in the country.
- The ORM was tasked with reducing the state’s regulatory burden by 25% in addition to improving transparency and enforcing new cost-benefit analysis measures.
- There is an important distinction between reducing regulatory burden and reducing the number of regulations. For example, an agency could cut the number of hours required to obtain a certain license. This would reduce regulatory burden without eliminating a regulation.
- In doing this, the ORM is tasked with reviewing all regulations from their point of proposal to implementation, as opposed to waiting for an agency to take action before intervening.
- Virginia strictly enforces a regulatory impact cost-benefit analysis, even for regulations exempt from ORM review, and a set of targeted cost-benefit analyses with respect to specific regulatory stakeholders, including local partners, families and small businesses. This process is called a regulatory economic analysis. The state requires that these and other relevant analyses and information throughout be published on a government website. A comprehensive guide to economic analysis is provided to agency heads.
Kentucky
- Kentucky launched the Red Tape Reduction Initiative in 2016, a few months into the tenure of Republican Gov. Matt Bevin.
- The Initiative’s goal was a 30% reduction in regulations determined to be onerous or outdated. Gov. Bevin solicited input from Kentucky business leaders to help identify burdensome regulations and instructed cabinet secretaries to review all regulations in Kentucky’s code. Upon receiving feedback, cuts to the code were made periodically moving forward.
- Near the end of Bevin’s one-term tenure, about 27% of regulations had been repealed or amended.
- Over a roughly three-year period, further evidence of deregulation, such as word counts, was observed. The launching of the Red Tape Reduction Initiative clearly showed a reversal of the trend of increasing regulation by volume within Kentucky’s code. There was also a demonstrated increase in deregulatory language within the code.
- While there was measurable success in the Red Tape Reduction Initiative, as the Mercatus Center pointed out in its analysis, linking deregulatory efforts to a total number of regulations repealed or amended can produce misleading results. It does not account for regulations added during the period studied, and a reduction in the number of regulations does not necessarily equate to a reduced regulatory burden. It is recommended that future endeavors favor the measurables used to determine regulatory burden, like in Virginia, when undertaking regulatory reform efforts.
Idaho
- Idaho Executive Order No. 2020-01 was signed in January 2020 by Republican Gov. Brad Little.
- This replaced the Red Tape Reduction Act with a regulation reduction philosophy nicknamed “zero-based regulation.”
- This effort sought to shift the status quo away from bureaucratic inertia. Zero-based regulation aims to make elimination of regulations the default, and to require that existing regulations be actively affirmed if they are to stay in place.
- Zero-based regulation includes a sunset provision, which triggers a periodic review of regulations. The impetus is on a state agency to take action and renew the regulation before its expiration date.
- Idaho utilizes a regulatory budget that sets an overall cap on the volume of regulation. For example, capping word counts will require agencies to prioritize their most important regulations.
- Idaho agencies are also required to perform regulatory impact analyses before new regulations are adopted. These require the provision of certain information, such as cost-benefit analysis or cross-jurisdictional comparisons.
- In addition to making elimination of regulations the default attitude toward regulation, zero-based regulation also makes regulations that remain less burdensome by default. State agencies must work to justify the regulations they wish to continue to enforce, and they hold the burden of proof when trying to justify stringent regulations.
- In 2024, the governor’s office claimed that 95% of Idaho’s regulatory code had been cut or simplified since the implementation of zero-based regulation. The Idaho legislature recently made zero-based regulation permanent by requiring state agencies to undergo rule reviews every eight years.
Ohio
- At one point one of the most heavily regulated states in the U.S., Ohio has taken steps over the past several years to cut red tape.
- Senate Bill 255 passed in 2019 early in the tenure of Republican Gov. Mike DeWine and with Republican control of both legislative chambers. This bill requires bureaucratic agencies to pursue the least restrictive regulation when addressing public safety. SB 255 also eases occupational licensing requirements. It requires state licensing boards to be reviewed at least once every six years or expire automatically. It also created a path for those convicted of a felony to request a professional license.
- Ohio’s 2019 budget requires state agencies to cut two regulations for each one they pass. This measure was similar to the federal Executive Order 13771 signed by President Donald Trump. This budget also required agencies to take inventory of their existing regulations.
- Senate Bill 9, passed and signed in 2022, extended the 2-for-1 program to 2025 and requires that executive agencies cut regulations by 30%.
Wisconsin
- In 2011, Wisconsin’s Assembly Organization introduced January 2011 Special Session Assembly Bill 8, which provided that state agencies could not enforce regulations that were not explicitly permitted by state statute. In the 2013-14 legislative session, regulatory reform was furthered by the Assembly’s first ever review of the state’s code.
- 2017’s Wisconsin Act 57, also known as the Wisconsin REINS Act, was signed into law by Republican Gov. Scott Walker after passage by a Republican majority in both legislative chambers. This was one of several state-level versions of the federal REINS (Regulations from the Executive In Need of Scrutiny) Act.
- Act 57 dictates that agency-created rules that are estimated to create costs exceeding $10 million are subject to legislative review. An agency can only promulgate a rule in that case if it is able to reduce its estimated cost or if authorizing legislation is passed.
- Act 57 also allows the Joint Committee for the Review of Administrative Rules (JCRAR) to indefinitely suspend the promulgation of any rule for any reason a temporary objection could be made under current law. JCRAR is permitted to contract an independent economic analysis review.
Kansas
In 2024, Kansas’ Republican legislature passed House Bill 2648. This bill, which was vetoed by Democratic Gov. Laura Kelly and then overridden by the legislature, subjects regulations from state agencies to legislative review if they are estimated to cost more than $1 million over five years after implementation.
This bill directs the Director of the Budget to conduct an economic analysis of proposed rules and regulations.
Florida
- In 2010, Florida’s Republican legislature voted to override Independent Gov. Charlie Crist’s veto of House Bill 1565, which included changes to the Florida Administrative Procedure Act.
- Notably, this included a sunrise provision that required legislative review of any executive regulation that was estimated to exceed $1 million in economic impact.
- Florida agencies are required to provide estimates of the relevant regulatory costs and to give “substantially affected persons” time to submit feedback and lower-cost alternatives.
- This rule ensures that expensive regulation will not be passed without regulation. One example of its effectiveness was the proposed ban on styrofoam in 2021, which was not enacted after its projected costs triggered a legislative review.
Montana
- Montana Executive Order No. 1-2021, signed by Republican Gov. Greg Gianforte, created the Red Tape Relief Advisory Council to implement regulatory reform. The Council is made up the governor, lieutenant governor and representatives of 13 state agencies who were tasked with identifying unduly burdensome or outdated regulations for elimination.
- Montana’s government also produced a “Red Tape Relief Form” with which citizens can submit feedback and ideas on regulatory reduction. The Council’s work was expanded through the signing of Executive Order 17-2021.
Arizona
- Arizona’s legislature introduced regulatory reform bills in the 2024 session. One of these, House Bill 2490, eliminated venue restrictions. Venue freedom is the idea that citizens have the right to challenge a regulation in the same court where they might be charged for violating it. Venue restrictions deter challenges to restrictive regulations. Unless otherwise prescribed by statute, H.B. 2490 prohibits agencies from restricting a venue for any appeal of an administrative decision or from requiring a party to travel to the agency’s location to submit or receive documentation for the decision.
- Arizona had two bills in 2024 pass out of its Republican-controlled legislature vetoed by Democratic Gov. Katie Hobbs.
- H.B. 2491 would have enhanced the authority of the Government Regulatory Review Council and S.B. 1343 would have implemented a sunset provision for outdated occupational licensing regulations.
Moving Forward
Georgia has an opportunity to fundamentally improve its regulatory environment by enacting these provisions. Lawmakers should also revisit and amend the 2024 Georgia Small Business Protection Act. While this bill is strong, it could be improved in its sunrise regulatory review for new regulations and by aiming higher in its goal for reduction of regulatory burden.
Research and results alike provide a roadmap for lawmakers to not only cut red tape, but also create a rulemaking process in which transparency and efficiency are defaults and piles of unnecessary regulation do not stifle innovation and economic growth.
