Cut Back Regulations to Make Strong Florida Economy Even Stronger

As we enter 2018, Florida’s economy is thriving. Unemployment is less than 4 percent, household incomes are rising, and the Bureau of Labor Statistics predicts that employment in the state will grow by 11 percent over the next eight years.

But there is room for improvement: Florida’s regulatory environment could use some help, and some simple reforms can keep the economy humming.

Innovation is a major driver of the economic growth that improves our lives. But too much government regulation, even when well-intentioned, can stifle this innovation and growth by making it more difficult for entrepreneurs to make new products and services a reality. For example, one recent study finds that more-regulated industries experience fewer new firm births and slower employment growth than less-regulated industries.

Despite Florida’s being one of the country’s most economically free states, a recent analysis from the Mercatus Center at George Mason University finds that the Florida Administrative Code is more than 11.1 million words long and contains nearly 174,000 regulatory restrictions, as measured by the words and phrases “shall,” “must,” “may not,” “prohibited” and “required.”

When combined with the 1.08 million restrictions in the U.S. Code of Federal Regulations, Florida’s regulatory environment is a major hurdle for entrepreneurs. The Florida code alone would take the average person 619 hours to read, making it a Herculean task to comply with every regulation with full confidence. Business owners, both new and old, who fail to comply with each restriction that pertains to them risk being fined or shut down.

Regulations that maintain basic health and safety standards are important, but others do little to keep us safe, even while imposing significant costs. For example, in Florida, a barbershop must be at least 100 square feet, not counting a bathroom, if it wants to advertise or allow people to wait for service. If it doesn’t advertise or have a waiting area, it can be as small as 75 square feet.

Now some people may choose not to wait in such a small space, but does this arbitrary requirement make anyone safer? With commercial real estate priced at over $400 per square foot in many parts of Florida, an extra 25 square feet can be a steep price to pay for a waiting area and government permission to advertise — especially for someone just starting out or trying to scratch out a living.

So what can Florida’s policy makers do to reduce unneeded regulation in the state?

One approach is to cap the overall level of regulation by implementing a “one-in, one-out” rule, which removes one regulation for each new one added. This can hold down the total number of regulations and keep the code from becoming an even larger burden.

Two bills filed for the current legislative session, SB 1268 and HB 791, take this approach. They call for a formal count of all rules in place, and they would institute a one-in, one-out policy to maintain the total count of regulations.

A more aggressive approach would be a one-in, two-out policy. President Trump has implemented such a policy for federal regulations, and he’s not alone. The United Kingdom and Canadian provinces British Columbia and Manitoba have also done this at various points. In fact, the U.K.’s policy has even evolved into a one-in, three-out system.

Importantly, a regulatory cap leads to regular re-evaluation of old rules to see if they are working. When a rule isn’t performing as intended, it can be modified or replaced with something better. The cap empowers regulators to make the final call as to which rules should stay and which should go, leaving important decisions about health and safety with those who possess the expertise.

Florida has one of America’s healthiest economies, and other states should take notice. But when it comes to regulatory reform, Florida should follow the lead of states like Kentucky, Illinois, Nebraska, Missouri and Wisconsin. That means eliminating outdated and ineffective regulations in 2018.