Have you ever heard the poem by Henry Wadsworth Longfellow about the little girl who had a little curl, right in the middle of her forehead? “When she was good,” the nursery rhyme goes, “She was very, very good.”
Regulations are kind of like that. When they are good, they are very, very good in that they make our food healthy, our workplaces safe, and our environment clean at a reasonable cost. But when they are bad, just like the little girl with the little curl, they are “horrid.” They unnecessarily raise prices for consumers, cost jobs, and reduce take-home pay for workers.
As the Granite State’s next legislative session gets underway, legislators might look to improve the state’s regulatory environment. There are two relatively easy ways they can do that: Cutting unnecessary red tape and improving economic analysis of regulations.
First, New Hampshire could consider a red tape reduction program like a number of other states have implemented in recent years. As part of its 2019 budget package, for example, Ohio required state agencies to remove two regulatory restrictions from the books for each new one added until mid-2023. With 135,000 regulatory restrictions of its own, New Hampshire can certainly stand to let a few restrictions fall by the wayside.
Texas passed a similar law in 2017, requiring that the costs of new regulations be offset by repealing or amending existing regulations of equal or greater cost. Another model comes from Virginia, a state that recently wrapped up a regulatory reduction pilot program that saw two state occupational licensing regulators reduce requirements by 27 percent and 14 percent each.
Red tape reduction efforts don’t necessarily need to emerge from a law passed by the legislature either. Governors in Oklahoma, Arizona, and Idaho have all signed executive orders in recent years, imposing regulatory offset provisions on their states’ regulators.
A second reform worth considering relates to the economic analysis of regulations. Like most states, New Hampshire already requires a form of this (known as a fiscal impact statement). In fact, New Hampshire is an innovator in this area because the analyses are the responsibility of an independent office in the legislature, known as the legislative budget assistant. This independence sets New Hampshire’s system apart from most states and the federal government, where analysis is handled by the agencies that regulate (and as a result, is not very objective).
That said, New Hampshire’s fiscal impact statements are often perfunctory documents, and the legislative budget assistant relies heavily on the agency to produce them. The analysis isn’t as rigorous or as independent as it could be, because the state doesn’t invest sufficiently in the personnel capable of producing analysis competently.
New Hampshire could consider following the example of West Virginia, which recently established a Division of Regulatory and Fiscal Affairs to analyze the economic consequences of regulations and legislation. Like New Hampshire, that office is situated in the legislative branch of government, insulating it from political interference from the governor. However, unlike New Hampshire, the office in West Virginia is led by a Ph.D. economist who oversees a staff of fiscal analysts.
West Virginia recognizes it sometimes “takes money to make money”—or in this scenario, also save money. If an analysis is to be meaningful enough to actually inform state rulemaking, resources have to be invested in doing the analysis right. While this may cost the state money upfront, it will save the public money by identifying ways to reduce the cost of regulations. Over the long term, it will also make the state money through more jobs and economic growth.
State policymakers in New Hampshire should take a page out of their fellow New-Englander Longfellow’s poetry book. Regulations, like the little girl with the little curl, can behave erratically. But with a few small improvements to rulemaking procedures, the governor and legislators can help ensure state regulations are very, very good and not horrid.
