In 2001, British Columbia sought to reduce regulation levels by one-third within three years, which is a similar target to the 30 percent reduction in regulatory restrictions envisioned under Ohio SB1. After hitting its initial target, British Columbia implemented a policy whereby one regulatory requirement would be eliminated for every new one introduced, thus ensuring that regulatory creep would not return after the initial reduction target was met. Regular reporting played an important role in providing the necessary transparency about how many requirements were added or removed over time and where requirements were coming from. In fact, regulation levels have fallen further in the province since the “one-in, one-out” policy was established. Accompanying the overall reduction in regulation has been an economic turnaround. While regulatory reform was one factor among many, it likely contributed to British Columbia’s strong economy in recent years.
The success of the province’s regulatory effort inspired a similar national law in Canada, which passed the Canadian parliament overwhelmingly by a margin of 245 “yes” votes to just one “no” vote. US states, such as Kentucky, have also been inspired by the reforms in British Columbia and are currently implementing red tape reduction programs. British Columbia was able to achieve its goals in part because government employees counted the number of regulatory requirements in place and committed to tracking this statistic across time. A similar tracking system is now being set up in Virginia, as part of its 2018 Regulatory Reduction Pilot Program. By July 1, 2020, all executive branch agencies in Virginia that are subject to the state Administrative Process Act must develop a baseline regulatory catalog and report their catalog data. Two states agencies, the Department of Professional and Occupation Regulation and the Department of Criminal Justice Services, must, by July of 2021, initiate reforms that produce a 25 percent reduction of the rules and requirements under their purview. Like with the national law in Canada, Virginia’s law is notable for its bipartisan nature. CNBC recently named Virginia one of America’s best states for business, citing the new regulatory reduction law as a major reason for Virginia’s strong placement in the rankings.
Importantly, a budgeting system leaves important decisions about the fine details of policymaking to the regulatory agencies that tend to possess the relevant expertise. This helps explain why British Columbia’s reforms did not come at the expense of public health or the environment. Meanwhile, under a regulatory budget or inventory system, the legislature plays an important supervisory role in determining whether regulatory allocations should rise, fall, or stay the same over time. The legislature can also play an oversight role to ensure agencies are meeting their targets. For example, Ohio SB1 grants an oversight role to the Joint Committee on Agency Rule Review.
The state of Ohio had more than 246,000 regulatory restrictions on its books as of early 2018. It has more regulation than all of its immediate neighbors, based on findings from the Mercatus Center’s State RegData project. A budgeting system for regulations could help prevent unwanted regulatory accumulation in Ohio, while also granting regulators the flexibility to address new and evolving problems. The successful experience of British Columbia since 2001 offers a roadmap for how to implement such a reform. Other US states such as Kentucky and Virginia are following British Columbia’s successful example.
If Ohio can consistently increase its economic growth rate each year, this would have profound implications for the opportunities available to state residents, both in the near term as well as far into the future. Establishing a regulatory budget is a smart step toward achieving this goal.