10.25.24 – OCPA
Oklahomans face more state regulations than citizens in most states across the nation, and experts say the accumulation of those rules impedes economic growth and job creation.
To chip away at regulatory calcification and reduce the proliferation of new regulations, state lawmakers need to create an independent entity to evaluate agency regulations and require proactive legislative approval of new regulations that impose costs above a certain threshold, experts told lawmakers at a recent joint meeting of the House and Senate administrative rules committees.
“If we are going to be one of the best states in the nation, we must fix the failings in our process that allows the unelected bureaucracy to regulate our constituency,” said state Rep. Gerrid Kendrix, an Altus Republican who chairs the House Administrative Rules Committee. “We want the government to be ‘of the people, by the people, and for the people’—not ‘of the bureaucracy, by the bureaucracy, and for the bureaucracy.’”
According to the 2024 edition of “Snapshots of State Regulations,” issued by the Mercatus Center at George Mason University, Oklahoma is the 17th-most regulated state in the country with 142,313 regulations on the books. In comparison, Idaho, the nation’s least-regulated state, has just 31,497 regulations in place.
Oklahoma has more state regulations than traditionally liberal states such as Minnesota, Connecticut, Rhode Island, and Vermont.
“Oklahoma is slightly more regulated than the average state and Oklahoma is more regulated than the median state,” said Patrick McLaughlin, director of policy analytics at the Mercatus Center.
Oklahoma’s higher-than-normal level of regulation is due, in part, to a process that makes it all but impossible for state lawmakers to thoroughly review proposed rules during the four-month legislative session.
State Sen. Micheal Bergstrom, an Adair Republican who chairs the Senate Administrative Rules Committee, noted that the Legislature is sent roughly 400 packets of proposed new agency rules each year with most packets running anywhere from 10 pages apiece to hundreds of pages in length.
“Many of those rule changes are perfectly appropriate,” Bergstrom said. “Some of them are questionable. Some of them are definitely misguided. And some are power-and-money grabs by agencies. The task of figuring out which are which falls first to this committee and then to the Legislature as a whole.”
Bergstrom noted the administrative rules committees receive “thousands of pages of proposed permanent rules” each session that must be reviewed. Bad rules must be identified and rejected within the four-month legislative session.
As chairman, Bergstrom said his goal has been to read every packet submitted, but time constraints have made that impossible.
“I came close two years ago, but the fact is I have not been able to do it,” Bergstrom said. “It’s just too much.”
Several experts recommended that lawmakers create an independent office to review state agencies’ proposed rules, saying that would make it more feasible for legislators to identify and reject excessive agency regulations each year.
“Without such analysis, it’s going to be difficult for legislators to even make an informed decision about whether or not regulations should go into effect,” said James Broughel, senior fellow at the Competitive Enterprise Institute.
Several officials suggested independent reviews of state agency regulations could be conducted by a new division within Oklahoma’s Legislative Office of Fiscal Transparency (LOFT).
Mike Davis, legal analyst for LOFT, noted that Wyoming has an independent office that reviews proposed agency rules. Wyoming officials indicated that each set of rules requires a minimum of four hours of review by staff and up to 25 hours of review for complex rules.
If LOFT was expanded to include a division dedicated to agency rule review, that would translate into four to five new employees at LOFT.
Bergstrom said he anticipates a bill to expand LOFT’s mission is likely in the 2025 session.
Broughel also encouraged Oklahoma lawmakers to impose a regulatory cap that requires the repeal of old regulations whenever new regulations are adopted, audit existing state agency regulations to identify those that can be repealed, and eliminate the requirement for the governor to sign off on any legislative veto of agency regulations.
Several officials called on Oklahoma legislators to adopt a “Rules from the Executive in Need of Scrutiny” (REINS) Act, which would require legislators to give proactive approval to any new regulations that impose costs above a certain threshold.
Wisconsin and Florida have had REINS laws in place for several years with significant success.
Speakers at the hearing stressed that uncontrolled growth of state government regulation ultimately harms job creation throughout a state.
“Everybody knows that there is a huge impact on small business anytime a regulation comes out,” said Jake Curtis, general counsel for the Institute for Reforming Government.
“When we go around as a grassroots organization and we’re hitting the doorsteps and we’re speaking with chambers, business owners, entrepreneurs, etc., I can tell you they’re feeling the weight of not only inflation but the regulatory burdens and costs that are passed onto business owners and consumers,” said Bradley Ward, a fiscal analyst who is the deputy state director for Americans for Prosperity–Oklahoma.
He said the state of Florida reduced the number of annual proposed new regulations by 51 percent after adopting a REINS Act in that state. A Florida legislative study concluded that the REINS Act had effectively reduced regulatory costs by $2 billion since 2010 by preventing adoption of many new regulations.
McLaughlin noted one 2020 study he co-authored found that federal regulatory growth was slowing overall economic growth by nearly one percentage point.
In contrast, he said officials in British Columbia, a province in Canada, managed to reduce regulations by 40 percent over three years. That added 1.2 percentage points to the province’s economic-growth rate.
Without reform, Daniel Dew, legal director for the Pacific Legal Foundation, warned that lawmakers would effectively cede enormous government power to unelected and unaccountable government employees.
“You can have some mid-level bureaucrat in a basement somewhere write something and it’s the law, and people can lose their liberty, they can lose their property, over this regulation—something you as an elected official could not do,” Dew said. “We have given the authority of the entire legislature and the executive branch to one person whose name will never be on a ballot and somebody we will never choose.”
Ray Carter
Director, Center for Independent Journalism