Occupational Licensing

DPFR serves as the Legislature’s collective slush fund

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Occupational licensing is supposed to protect the public from unqualified professionals whose goods and services may harm consumers, yet rarely are licensing laws initiated after a citizen receives low-quality services that caused undue injury or financial burden. Instead, it is almost exclusively special interest groups that approach government seeking licensure.

Why? It’s a win-win for both parties involved. Licensed professionals enjoy less competition, greater demand for their services and hefty wage premiums as a result of licensure.

In return, lawmakers get a slush fund to raid when they need to finance a pet project, or punt on a solution to a controversial issue.

When lawmakers returned to Augusta to take up Gov. LePage’s vetoes earlier this week, they chose to override the governor on LD 1490, a stop-gap funding measure for Maine’s county jails.

The Legislature and the executive branch been sparring over county jails for more than a decade. In 2007, then-Governor John. Baldacci announced a plan to centralize control of Maine’s 15 county jails. Before the formation of the State Board of Corrections, which was formed in 2008 to oversee the county jails, each jail was run independently by sheriffs and county administrators. Years later, jails remained overcrowded and continued to run significant deficits.

A law passed in 2015 returned control back to individual counties, however cost overruns have persisted throughout the state. In 2017, it cost $87 million to operate county jails. In February 2018, the LePage Administration rolled out a plan to establish a new state commission to oversee county jails that would have potentially closed five jails and regionalized the system. The plan was met with skepticism, however, and the Legislature still has not implemented a plan to fix the reoccurring troubles with our county jails.

Instead of devising a long term solution to the problem, the Legislature voted to override Gov. LePage on LD 1490 which raids $3 million from the Department of Professional and Financial Regulation’s (DPFR) “other special revenues fund” at the end of the 2018-19 fiscal year. DPFR serves as a major occupational regulation entity of the state.

This decision is noteworthy because DPFR does not receive General Fund appropriations. DPFR operates on fees and other charges obtained from the workers they regulate, many of which have no business being regulated (at least not to the extent of licensure).

For example, DPFR regulates (among many other occupations) athletic trainers, auctioneers, dietetic technicians, geologists, interior designers and soil scientists; professions where the need for licensing is unclear. In addition, many of these professions are uncommonly licensed in other states, or the scope of practice is so limited that they could not possibly injure or cause unnecessary financial burden to consumers.

The $3 million raided this week is just the tip of the iceberg.

Amidst a government shutdown in July 2017, the Legislature devised a plan to transfer $16.2 million from the “other special revenues fund” within DPFR to the General Fund at the end of the 2017-18 fiscal year to help pay for the bloated $7.1 billion budget deal that ended the shutdown.

In the last year alone, the Legislature has raided nearly $20 million from DPFR.

The reality is that Maine does not need to license many of the occupations it licenses. Maine licenses many occupations to appease the special interest that come asking to be regulated, and to give the Legislature a slush fund. The Legislature’s persistent use of DPFR’s “other special revenues fund” illustrates that fees are still too high and must be adjusted by statute, and that too many workers are licensed in Maine.

 

About Jacob Posik

Jacob Posik, of Turner, is a policy analyst for the Maine Heritage Policy Center. He can be reached at jposik@mainepolicy.org.

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