Research Note: Regulatory Experiments–Idaho, Virginia

Research Note: Regulatory Experiments–Idaho, Virginia

A few states outside the midwest provide promising templates for regulatory reform and modernization, a pressing issue for Nebraska. Idaho and Virginia notably embarked on a mission to unshackle citizens from a growing administrative state, as discussed by a Mercatus Study in 2019. Six years ago, Virginia passed the Regulatory Reform Pilot Program that tasked two state agencies to assemble a count of their regulatory requirements and rules. Following this accounting, the agencies were required to cut 25% of all discretionary rules. This was followed by a 2020 deadline for all agencies subject to the Administrative Procedure Act to embark on the same mission. There is no mere coincidence that these retroactive policies have made Virginia a common sight in the top five on CNBC’s ranking of the best states to conduct business since 2020. 

Idaho also became a focal point for the Mercatus review, citing Governor Little’s series of Executive Orders that targeted occupational licensing reforms, requiring two regulations to be cut with the introduction of a new rule, and creating a baseline rule count. Since 2019, Governor Little’s administration “has cut or simplified 95 percent of regulations,” even consolidating 11 distinct agencies into one by executive order in 2020. While simple in appearance, Governor Little’s policy forces agencies to cut, modernize, or augment regulations, eventually reforming the entire state code.

What does this mean for Nebraska? Notably, the Cornhusker state has achieved significant occupational licensing reform–from LB299, passed in 2018, to Legislative Bill 16, passed in March of 2024–an important step in cutting some red tape. Now, it is time to take the initiative and seriously reconsider retroactive review of other regulations. The first step in creating a sensible regulatory review process is cutting many rules and red tape from previous decades of ad hoc rule-making. Idaho and Virginia both emphasize that reform can start with the agencies. Nebraska should begin the same way, requiring agencies to carefully examine discretionary rules that discourage economic activity.




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