Good Government

Cutting red tape in Oklahoma

March 29, 2019

Mike Brake

Oklahoma has a relatively high regulatory burden that can hamper economic growth, but the state also has an opportunity to join several of its peers in meaningful regulatory reform, according to an economist from the Mercatus Center at George Mason University who made presentations to an OCPA audience and state lawmakers Monday.

Dr. James Broughel studies federal and state regulatory codes, analyzing them to pick out key imperative terms like must, shall, and required. According to his analysis, Oklahoma’s myriad titles of regulation contain 145,296 such terms within a total of 9.3 million words. “It would take an individual about 515 hours—or almost 13 weeks—to read the entire Oklahoma Administrative Code,” Broughel said.

“Traditionally, we really haven’t had a clear picture of the impact of regulation, or even how much regulation we have,” he said. The Mercatus Center’s REGDATA tool has tabulated regulatory restrictions at the federal level and for many states, which indicated that Oklahoma ranks in the upper third in regulatory burden.

That has a negative impact on economic growth, Broughel said. Nationally, had regulations held at the level they were in 1980, the Mercatus Center estimates the economy would have been 25 percent larger by 2012. That would have amounted to some $4 trillion in extra gross domestic product, or $13,000 per capita.

“This is what’s at stake and why we should care about regulation,” Broughel said.

The Oklahoma data on regulation shows that professional, scientific, and technical services are among the most heavily regulated industries, followed by administrative and support services, paper manufacturing, ambulatory health care, mining, broadcasting, and animal production and agriculture.

The state agencies administering the most regulations are, in order, the state Department of Health, the Oklahoma Corporation Commission, the state departments of Environmental Quality, Agriculture, Mines, Mental Health and Substance Abuse, the Oklahoma Tax Commission, the Oklahoma Insurance Department, the Oklahoma Office of Management and Enterprise Services, and the state Department of Education.

Broughel said a number of states have launched red tape reduction efforts, which require either executive or legislative buy-in (or both) and a systematic approach. Ironically, it was the Canadian province of British Columbia that started the red tape revolution.

Other programs have been launched in Missouri, Idaho, and Virginia.

“Oklahoma could be the next state on that list,” Broughel said.

He said British Columbia trimmed its regulatory burden by 49 percent after initially setting a target of reducing regulations by a third. Other jurisdictions have implemented “one in, one out” rules which require the repeal of one regulation for the creation of any new one, or better yet, "one in, two (or three) out."

Red tape reduction efforts in Idaho, Missouri, and Arizona have been launched by gubernatorial executive orders, while a recent program in Virginia has initially targeted two state agencies by legislative action. The American Legislative Exchange Council has also crafted model red tape reduction laws that any state can adopt.

Broughel said opposition to regulatory reform has been surprisingly light in most areas. That’s partly because the efforts have been described with terms like “cutting red tape,” which many taxpayers support.

“We are grateful to Dr. Broughel and the Mercatus Center for sharing this information with us,” OCPA president Jonathan Small said. “We are hopeful that the reform climate currently apparent in Oklahoma under Gov. Stitt’s leadership will extend to regulatory reform to help boost our economy.”