News Conference Call on Red Tape Regulation

OMAHA, NE (September 28, 2016) —  Government regulation in Nebraska is contributing to lower job growth and business formation in the state, and higher costs for consumers and taxpayers. A series of reports by the Platte Institute for Economic Research show that while job creation in Nebraska has fallen behind the national average over the past decade, regulatory reforms can help the state create better job opportunities for Nebraskans.

U.S. Census Bureau data show that the cost to taxpayers for regulation in Nebraska is 41 percent higher per person, on average, than in five key competitor states: Arizona, Colorado, Florida, Iowa, and Texas. The research compares these states with Nebraska because they rank in the top tier of states gaining income and population from relocating Nebraskans.

These findings will be discussed on a conference call about the release of the latest Platte Institute report, Removing Barriers in Nebraska Part Six: How Red Tape is Harming the Good Life. The report is the final entry in the Removing Barriers in Nebraska series, available at PlatteInstitute.org/GoodLife, and is available here:  Removing Barriers Brief Six PDF in PDF format.

The conference call will be held Wednesday, September 28, 2016 at 10:30 a.m. CT by phone at (605) 475-4000, Access Code: 106202#. Platte Institute Policy Director Sarah Curry and Communications Director Adam Weinberg will be available on the call, which may be recorded for broadcast and will include Q&A.

While taxpayer costs for regulation enforcement are a relatively small part of state and local budgets, that measure is only a baseline for evaluating other economic costs. Complying with overly-burdensome regulation and the resulting losses in economic activity are much larger expenses for workers, entrepreneurs, and consumers, which the National Association of Manufacturers estimates to be over $2 trillion a year for federal regulation alone.

“As important as it is to have a regulatory policy that handles problem cases that arise in business, it is equally important to safeguard the public from bureaucratic red tape that impose barriers to working and investing in Nebraska. That means policymakers need to take a larger role in regulating the regulators,” said Adam Weinberg, the Platte Institute’s Communications and Outreach Director.

On the state and local level, Nebraska’s regulatory policies create barriers to economic growth that many other states do not. One particular area the Platte Institute study highlights for reform is occupational licensing. Almost 200 different jobs require a state license in Nebraska, with many licensing requirements adding additional training and costs not found in many or most other states.

For example, cosmetologists or barbers have to take 2,100 hours of training in Nebraska, which can cost up to $20,000 and take more than a year, while most states require 1,500 hours or less. A massage therapy license in Nebraska requires 1,000 hours of training, while most states require 500-700 hours.

These inconsistencies place higher costs on Nebraska’s workforce, discouraging low-income workers, small business people, relocating military families and workers, and ex-offenders from pursuing career or business opportunities that require licensing. Because these disincentives to work and invest reduce competition in numerous professional fields, consumers also pay higher prices for these services.

A study by the Heritage Foundation found that reforming Nebraska’s occupational licensing laws could save the average household $942 a year.

“While some regulation will always be necessary, we’ve reached a point where the burden of starting many new jobs or businesses in Nebraska is far greater than other states, and it’s holding many Nebraskans back from opportunities to earn a better living,” said Weinberg.

Here are other highlights and recommendations from How Red Tape is Harming the Good Life:
 

• Above all, policymakers should guard against regulatory and licensing requirements that exceed essential standards of health and safety in order to reduce competition in the marketplace. These policies give an advantage to existing businesses over new entrepreneurs, while providing no additional benefits to the public, and in some cases, enable poor business practices to persist due to a lack of competitors.
   
• One example of regulation being used to stifle competition is the City of Lincoln’s current parking regulations on food trucks. Food trucks operate much more freely in Omaha and other major cities, and their regulatory needs are not fundamentally different from other food vending businesses. Yet by prohibiting food trucks from using public parking in the city, Lincoln’s elected officials are shielding brick-and-mortar restaurants from competition with new businesses consumers clearly want to frequent.
   
• Occupational licensing reform can be achieved by making licensing requirements for specific professions more accessible, by eliminating licensing requirements entirely as the Legislature did with natural hair braiding in LB898, or increasing reciprocity with other state licensing requirements so that relocating workers from other states may bring their experience and licensing to Nebraska and continue their work.
   
• Reducing or eliminating occupational licensing, where possible, does not mean a complete absence of regulation. Business inspection, insurance or bonding requirements, registration, or private certification all exist as less economically harmful tools than unnecessarily barring workers from a profession.
   
• Supreme court records show that regulations in Nebraska have been more frequently overturned by the courts upon review than in most of our key rival states, suggesting a greater need for regulatory reform. Nebraska’s courts overturned roughly 37.8 percent of regulations, substantially higher than the 20-27 percent range for Colorado, Florida, and Iowa, although roughly similar to Texas.
   
• One way to reduce regulatory overreach is to wipe out-of-date regulations off the books. Requiring sunset provisions to be paired with regulations would automatically cause a regulation to expire if it was not renewed, and creates a natural process for getting older, outdated, and inefficient regulations off the books.

To arrange an interview about this release, contact Adam Weinberg at (402) 452-3737 or aweinberg@platteinstitute.org. 

The Platte Institute for Economic Research advances policies that remove barriers to growth and opportunity in Nebraska. To learn more about our research, view our recent articles, or subscribe to our weekly #PlatteChat column.