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Rethinking Regulatory Oversight with SCR 1618

regulatory burden

This week, the Kansas Senate Judiciary Committee is hearing SCR 1618, which would establish greater legislative oversight regarding executive branch regulations. This bill is a solid step towards healthy regulatory reform that will make Kansas more competitive and provide new opportunities for Kansas families.

The constitutional amendment would allow the Kansas legislature to “establish procedures to revoke or suspend rules” adopted by the “state executive branch” which manages regulations. According to the OECD, having strong regulatory oversight bodies is vital for effective governing and economic progress, with these entities being placed at the center of government.

During Senate Judiciary Committee testimony on the bill, Attorney General Derek Schmidt mentioned how SCR 1618 would ensure the Kansas legislature’s power of a “legislative veto” that was declared unconstitutional in the 1983 Supreme Court case Stephan v. Kansas House of Representatives. He argued the bill could better help align legislative intent behind bills and executive branch implementation. During House debate on their companion of HCR 5014, House Representative Barbara Wasinger mentioned how the bill would give more oversight over “hard to understand” regulations while limiting the autonomy of regulatory agencies to make laws on their own.

Increased oversight on regulations is important for two main reasons:

  1. Regulations create a burden on citizens and businesses.

Regulations create costs for businesses by limiting their actions or necessitating more actions. This is often represented by additional economic costs to businesses which are then passed down to consumers. At the national level, the $1.9 trillion lost from the economy due to regulations has been described as a “hidden tax” greater than the federal corporate income and personal income tax revenues combined.

The body of regulations that exists in Kansas would take the average person 180 consecutive hours of reading to gloss over. This, by itself, represents an economic burden on citizens.  An estimated 29,409 jobs have been lost due to occupational licensing restrictions – but one type of regulatory burden. In total, this means a $197.5 million loss from the state’s economy annually.

Much of the economic consequences of regulations fall on people of color, people with disabilities, and other historically marginalized groups. Complexity can be described as a subsidy and too often can often be abused by existing firms to act as barriers to entry for new competition especially from historically marginalized groups and start-ups. For instance, licensing reduces the probability of a Black individual working as a barber by 17.3%.

Finding ways to reduce or narrowly tailor regulations through oversight is crucial to minimize the negative economic impacts of these policies.

  1. Proper oversight of a regulatory system is vital for ensuring efficiency.

Minimizing regulations comes from both limiting the growth of new regulations and adjusting or repealing outdated ones. Having more legislative oversight over regulations means more opportunities to evaluate the effectiveness, incentives, costs, conditions, focuses, and goals of regulations. This is effectively done through independent, bipartisan committees often found when there’s more legislative involvement in regulations.

According to a study of Wichita businesses by KPI and Wichita State University’s Hugo Wall School of Business, companies appreciated an end-goal-focused approach to regulations but often got frustrated when regulations felt arbitrary. A way to reduce this phenomenon is by having more oversight and opinion on regulation from a variety of perspectives, which is what SCR 1618 would enable.

This bill comes at a time when states across the nation are pursuing and succeeding with regulatory reform. Ideas such as occupational licensing reform, regulatory sandboxes, Right to Earn a Living legislation, limits on red tape, and more are discussed in a Kansas context in Kansas Policy Institute’s recently released report Streamlining State Regulations.

Preventing the growth of regulation is just as important to the economy as maintaining a healthy tax environment. SCR 1618’s increased oversight on regulations fits into a regulatory reform framework that enables greater economic freedom and growth by minimizing the government’s burden on businesses and their consumers; whereby Kansas can work to match states like Utah and Arizona some of the fastest-growing economies in the country.