Reflections on Regulatory Reform in New Jersey
Testimony before the New Jersey Assembly, Commerce and Economic Development Committee
Chair Johnson, Vice Chair Karabinchak, and members of the committee:
My name is James Broughel, and I am a senior research fellow at the Mercatus Center at George Mason University. I am also an adjunct professor of law at George Mason University. My research focuses on regulatory procedures, cost-benefit analysis, and economic growth. Thank you for the opportunity to submit testimony today on regulatory reform in New Jersey.
Achieving meaningful reductions in the regulatory burden is hard. That is a lesson from a 2018 report I wrote about New Jersey’s regulatory reform program during the administration of Governor Chris Christie. New Jersey’s past experiences with regulatory reform can provide valuable insights for future reform efforts, such as those being considered before this committee today.
Governor Christie launched New Jersey’s red tape cutting program in 2010, and it continued over the course of his two terms in office. New Jersey’s efforts brought mixed results:
- The overall regulation burden probably didn’t decrease. The program appears to have failed at lowering the overall burden of regulation in the state. One reason for this was almost certainly the lack of any clear metric to track program progress.
- Fewer new regulations resulted. While regulation levels in New Jersey may not have fallen, the rate at which they were growing seems to have slowed. This could be a sign of higher standards being imposed for new regulations. However, the slowdown appears to have begun even before the red tape reform program was established.
- Some old regulations were scrapped. The program managed to eliminate some of the state’s regulatory clutter. These are regulations that are deemed obsolete, overly costly, or otherwise unnecessary.
Despite its mixed results, the New Jersey program included a number of positive elements and best practices:
- It was transparent in that it produced detailed reports describing achievements.
- It was willing to make recommendations that would require statutory changes (some of which were passed into law).
- The Red Tape Review Group and subsequent Red Tape Review Commission, which were appointed to oversee and report on the progress of the reforms, were both bipartisan.
Successful and sustainable efforts to reduce regulatory burdens should include concrete goals and measures. One approach is to track the overall level of regulation, using simple metrics like counts of requirements or restrictions, and to establish explicit reduction targets accompanied by hard deadlines for when those targets must be met. Constraints on regulators, such as mandates to eliminate a certain number of requirements for every new one introduced, will also help to ensure that periodic review becomes engrained in the culture of state regulatory agencies. Such changes will make it more likely that regulatory reviews are substantive and not merely symbolic.
Attached you will find a copy of my report on New Jersey’s regulatory reforms. Please feel free to contact me with any questions.
James Broughel, “Cutting Red Tape in the Garden State: New Jersey’s Regulatory Reform Program under Governor Chris Christie” (Mercatus Working Paper)