Research Note: Florida’s REINS Act
A decade ago, Florida was far from the model for economic freedom from regulatory burden. The state ranked 8th among 44 states with 168,795 regulatory restrictions according to a review of states with the highest regulation count done by the Mercatus Institute at George Mason University. Florida now leads the nation in migration gains, even beating out Texas. In 2020, this migration brought an estimated $40 billion to Florida. Businesses have noticed. New York and Chicago have experienced a significant exodus of firms to Southern Florida, including Icahn Capital, Ark Investment Management, Citadel, and Goldman Sachs. What changed?
As mentioned in a previous research note, the short answer is regulatory reform. Florida’s legislature passed a REINS-style (Regulation from the Executive in Need of Scrutiny) bill in 2010, changing the state’s regulatory review landscape. Only attempted at the federal level previously, the amendment to Florida’s Administrative Procedure Act required legislative approval of agency rules with associated economic costs of $1 million or more over five years before they could take effect, among other provisions. The bill finally gives due authority to the Florida legislature and, by extension, the public, who now have a real voice in the costly regulations that affect their businesses and families.
In fairness, the executive branch in Florida has been a strong contributor to this progress. Former Governor Rick Scott and Governor Ron DeSantis have significantly cut the number of new regulations proposed each year by one thousand, from 2,500 to 1,500. Both were similarly proactive in cutting existing regulations, with Governor Scott cutting approximately 5,000 regulations over his eight-year tenure. However, while this emboldened executive slashing is helpful, it is not nearly as sustainable or impactful in the long term as the legislative restructuring. All it takes is a governor in favor of a regulatory state to undo decades of progress, whereas tying regulatory review to the legislature ensures public opinion is transmitted to the rulemaking process indefinitely.
For example, Florida’s Agriculture Commissioner Nikki Fried attempted to introduce a rule that would remove Styrofoam packaging in grocery stores in 2021. The policy would have had an impact that surpassed the REINS economic threshold of $200,000 annually, invoking a need for legislative approval. The legislature opted not to hear a bill that would approve the rule, so it did not take effect. If this were to take place in Nebraska, the signature of the governor and attorney general would have been the only requirements for a rule such as this to take effect.
Briefly outlined above, Florida’s experimentation with regulatory review reform has yielded inarguable results. Past the relocation of corporate giants, the southernmost state has become a startup haven, with over 1,800 new businesses being created daily as of 2022. Is it time for Nebraska to take note and implement REINS? Absolutely. If the Cornhusker State is serious about promoting economic freedom, enhancing government transparency, and fostering innovation, then adopting the REINS Act is a crucial step forward.
Sources
- Chambers, Dustin, and Colin O’Reilly. “The Regressive Effects of Regulations in Florida.” Mercatus Center, 13 Apr. 2022, www.mercatus.org/research/policy-briefs/regressive-effects-regulations-florida-0.
- Holik, Haley. Why Florida Is a National Model for Regulatory Reform, The Foundation for Government Accountability, 22 Sept. 2022, TheFGA.org/paper/florida-is-a-national-model-for-regulatory-reform.
- U.S. Senator Rick Scott. (2021, September 2). Sen. Rick Scott leads colleagues in bill to reduce unnecessary government regulations. https://www.rickscott.senate.gov/2021/9/sen-rick-scott-leads-colleagues-in-bill-to-reduce-unnecessary-government-regulations.