8.21.18 – Statesman – By Arif Panju – Special to the American-Statesman
The Texas Constitution’s protections for economic liberty ensure that the government does not unreasonably interfere with the pursuit of one’s livelihood or the running of one’s business. To better guarantee those safeguards, Gov. Greg Abbott has announced a new policy to prevent state regulators from infringing on the rights of Texans.
In a recent letter directed to the heads of all state agencies and licensing boards, the governor declared that all regulations written by agencies and boards must undergo an independent legal and policy analysis before they are approved. Under this review process, the governor’s office will analyze the costs and benefits for a proposed regulation, as well as its potential impact on small businesses and rural communities. With this additional level of scrutiny, Abbott hopes his executive order will “eliminate redundancies and inefficiencies and provide a dispassionate ‘second opinion.’”
His letter should also rein in occupational licensing, which has become one of the biggest barriers to entering the state’s labor markets. Almost one in four Texans needs a license to work, which means that occupational licensing now affects more Texans than the minimum wage and unions — combined.
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Texas has 49 state licensing boards, more than any other state in the nation, save Alabama. State agencies and licensing boards have the power to write and enforce regulations of their own making, letting them regulate virtually every aspect of our daily lives. That is tremendous power vested in officials who are not elected lawmakers.
Incredibly, almost three-quarters of those boards are dominated by members of the very occupations they are supposed to regulate. Left unchecked, their actions and rules can foster self-dealing, harm consumers, stifle innovation and yield no real benefits to the public at large.
For instance, ListingDoor, a startup that helps people sell their homes by themselves — and avoid paying brokers’ expensive commissions— was the subject of a 10-month investigation by the Texas Real Estate Commission to determine if ListingDoor violated any of the commission’s statutes and regulations. Of the agency’s nine commissioners, six are real estate brokers, while its executive director is also a broker. No wrongdoing was found.
Similarly, the Texas Department of Licensing and Regulation issued a $2,500 fine to Cynthia Kool, a licensed eyelash extension specialist, and refused to renew her license because she hosted a daylong session at her shop to share best practices with others. Her crime? She doesn’t operate a cosmetology school. The fine was withdrawn only after the Institute for Justice raised constitutional concerns with fining someone for merely talking for a living. Kool has not held a best-practices session since, forcing her to give up thousands of dollars in income.
Abbott’s agency oversight reforms build on a landmark decision by the Texas Supreme Court in 2015. In Patel v. Texas Department of Licensing and Regulation, a case in which I was co-counsel, the court ruled against a state agency that forced eyebrow threaders to spend 750 hours in a cosmetology school, even though threading — the ancient practice of removing eyebrow hair using a strand of cotton thread — was not taught during those 750 hours or even tested on the licensing exam. By ruling that the state agency’s actions were “so burdensome that they are oppressive,” the Texas Supreme Court vindicated the Texas Constitution’s protections for economic liberty — and cemented one of the strongest protections for the right to earn a living among all 50 states.
With meaningful oversight of state agencies and licensing boards, Abbott has the opportunity to have the executive branch meaningfully reinforce those protections.
Panju is the managing attorney at the Institute for Justice’s Texas office.