Chris Harelson and James Broughel: How Utah can be the best state for regulations

(Francisco Kjolseth | The Salt Lake Tribune) A fresh batch of snow falls on the Utah Capitol on Tuesday, Jan. 13, 2020.

Idaho recently made headlines by becoming the “least regulated state in the country.” In an unprecedented effort led by Gov. Brad Little’s administration, the state eliminated over 1,800 pages of regulatory code last year.

Now the question is whether Utah — which has over twice as much regulation — will stay competitive with its neighbor and the numerous other states reining in regulatory excesses.

Idaho’s reforms went into hyperdrive in mid-2019, when its Legislature left town without reauthorizing its expiring regulatory code. This created an opportunity to keep the regulations the Little administration’s experts deemed necessary while allowing the outdated or otherwise questionable ones to expire en masse. In fact, so many regulations were repealed or simplified that Idaho catapulted to number one in a Mercatus Center ranking of states by regulation.

Utah lawmakers, who take pride in an inviting business climate and culture of entrepreneurship, should ask themselves how to take over that number one spot.

According to Mercatus data, Utah has 88,000 regulatory restrictions on the books, making it the 11th-least regulated state. That’s still nowhere close to Idaho’s new level of 41,000 or lightly-regulated South Dakota’s 44,000.

Other states are worth emulating. Virginia passed the bipartisan Regulatory Reduction Pilot Program in 2018. It aims to reduce occupational licensing and criminal justice-related regulations — which many Republicans and Democrats agree have gotten out of hand — by 25 percent. The law tasks two state agencies with cutting about 1,200 requirements by 2021. The pilot program is even likely to be expanded to other areas.

A similar licensing review has been proposed in Utah by state Rep. Norm Thurston, R-Provo, though it’s failed to gain traction due to worries about its costs. However, Virginia’s law has kept the costs of reviewing all those regulations under control. Furthermore, a one-time appropriation to review decades of regulatory clutter has the potential to streamline business and government for years to come. That’s a worthwhile trade-off.

Occupational licensing reform is the perfect place to start for two reasons: First, it is relatively uncontroversial, as Virginia has shown. Free-market economists like Milton Friedman and progressive economists who worked in the Obama administration acknowledge how anticompetitive these regulations can be.

Second, and most importantly, licensing reform could be a boon to Utah’s underprivileged career-seekers. Occupational licensing regulations make it more costly and time-consuming for people to improve their circumstances by becoming plumbers, construction workers and even cosmetologists (to name a few).

These regulations can go far beyond simple certification or public safety monitoring. Many impede people’s movement up the economic ladder by placing lengthy educational requirements and unnecessary fees in their paths — often without any detectable public benefits.

Licensing reform means independence and self-reliance for our poorest communities, and it can also mean reductions in recidivism for ex-cons and a light at the end of the tunnel for families stuck in a cycle of intergenerational poverty.

Given the amount of outdated regulation in most states, Utah is probably long-overdue for a cleanup. In fact, many of Idaho’s cuts were obvious, such as those to horse racing and payphone regulations.

A deeper dive into Utah's regulations might even allow it to challenge Idaho as America’s least-regulated state, and to reap the corresponding economic and social benefits. By making substantive cuts, starting with occupational licensing regulations, Utah could rightfully brag that it is the most entrepreneurial and business-friendly state in the Union.

Now that would be something to be proud of.

Chris Harelson

Chris Harelson is the executive director of Prosperity Council.

James Broughel

James Broughel is a senior research fellow with the Mercatus Center at George Mason University.