This piece first appeared in the Portland Press Herald.
During her recent inaugural address, Gov. Mills warned Maine residents that a recession could be on the horizon. While to some extent recessions are inevitable, the next economic slump could be entirely manmade. That’s because, according to a new analysis, regulatory requirements in the state are piling up by the tens of thousands. All this red tape could hit the state’s economy like a regulatory tsunami.
To get a sense of the complexity of the Code of Maine Rules – Maine’s regulatory code – it would take an ordinary person about 450 hours, or roughly 11 weeks, to read it in its entirety. That’s assuming the reader spends 40 hours per week reading as a full-time job. So it’s not surprising that new and old state lawmakers, who frequently identify cutting red tape as a top priority, often don’t know where to start.
Fortunately, now legislators have a starting point thanks to modern technology. Specifically, text analysis software allows for easy parsing of state regulatory language. It’s now possible to capture information in minutes that used to take hours, weeks or even years to obtain by reading.
For example, we now know the Code of Maine Rules is home to 8.1 million words, 113,862 of which are restrictive in nature, meaning phrases like “shall,” “must” or “prohibited.” The health care, food production and manufacturing industries are among the hardest hit by this blanket of regulation.
One state agency alone, the Department of Health and Human Services, has almost 23,000 restrictive words in its respective sections of the code. Maine’s Department of Environmental Protection is not far behind, with about 21,000 restrictions.
Of course, not all regulation constitutes red tape. Many rules serve a vital public purpose, keeping our workplaces safe and air and water clean. The problem arises when so many rules are added to the books that comprehending the complex web of requirements becomes impossible.
Academic research has identified the problem of “regulatory overload,” which occurs when requirements become so complicated and convoluted that more regulation leads to less – not more – safety. It shouldn’t be surprising that a simple and easy-to-follow rulebook can actually increase safety, because it’s easier to comply with.
States like Virginia are beginning to get the message that red tape is a threat to prosperity and security. Last year, legislators there passed a bipartisan law requiring a 25 percent reduction in requirements from two agencies engaged in occupational licensing and criminal justice activities. CNBC recently named Virginia one of America’s best states for business, citing the new red tape law as a major reason for Virginia’s strong showing.
If Maine wishes to attract more talent, including job creators, it too should begin unraveling the spools of regulation that have built up throughout state government, especially those hurdles, like occupational licenses, that make it harder for residents to earn a decent living. Following Virginia’s lead and focusing on reforms with support from both sides of the political aisle is a good way to start.
Gov. Mills’ administration is still in its infancy. Not surprisingly, there are many new programs the governor wants to start, in addition to existing programs she wants expanded. But all this spending and regulating comes at a cost. If Gov. Mills is truly worried about the possibility of a recession, now is an opportune time for meaningful regulatory reform that boosts the economy for years to come.