Ohio Games Its Own New Limits on Regulation
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Ohio Games Its Own New Limits on Regulation
The spirit of the law is usually more important than the letter of the law.
Recently, Ohio Governor Mike DeWine and Lt. Governor Jon Husted announced the removal of 610,000 words from the Ohio Administrative Code—the set of books containing what most people think of as state regulations—and the deletion of up to 4 million words related to lottery-game procedures and “duplicative or unnecessary” text “established by individual higher educational institutions.” This, hopefully, marks another notable step in the effort to reduce the red tape that’s silently piled up over the years.
Indeed, the administration deserves credit for recognizing that regulatory accumulation inhibits innovation, new business formation, and overall economic growth. However, it’s too early for a victory lap.
Husted said the goal is to “make it easier for people and businesses to comply,” saving time and money. Real progress has been made on this front. For example, telehealth restrictions that were temporarily removed during the pandemic have now been permanently cut.
But there’s more to the story. Eliminating red tape means deleting all the various prohibitions and obligations that official regulations needlessly create. Those 610,000 words are not actually being removed from the list of things that Ohioans must comply with. Instead, those things will move to another set of books, which the Administrative Code will now point to. This is called “incorporation by reference”—when a law or regulation refers you to another document that is granted the full force of law.
In this case, Ohio is removing most of its building, mechanical, and plumbing codes. These will instead be outsourced to the International Code Council’s code books and website. Ohioans still must comply, regardless of who publishes them.
This exercise mostly amounts to reshuffling a bunch of paper; a misguided but well-meaning attempt to achieve the red-tape reduction goal of Ohio’s new regulatory budget. The budget was established last year by SB 9—titled “Reduce regulatory restrictions in administrative rules”—and requires a 30% reduction to the prohibitions and obligations created by state regulations within three years. The administration and state agencies must take an inventory of what’s currently on the books, create a baseline for comparison, and ultimately cut unnecessary rules. Agencies must also periodically do a new inventory to measure progress.
Unfortunately, it seems that the administration got caught up in the last part of the legislation’s title: “in administrative rules.” Republishing regulatory restrictions somewhere else does not accomplish the spirit of the legislation, even if it does fulfill the letter of the law.
In fairness, there are surely parts of the building, plumbing, and electrical codes that Ohioans want to remain on the books. These sections don’t need to be thoughtlessly deleted in full or without regard for rules that, on net, benefit most Ohioans.
Going forward, the administration should declare upfront that all relevant documents, including those incorporated by reference, will be included in both the initial inventory of regulatory requirements and in each subsequent, pared-down inventory.
This was the approach taken by British Columbia, where this form of red-tape reduction originated. The Canadian province tallied all requirements contained not only in regulations, but also in referenced material, guidance documents, and forms. The real point is to find all the ways the administrative state dictates or limits choices. The document used is irrelevant.
British Columbia successfully cut nearly 40% of its regulatory requirements within three years and saw a one-percentage-point increase in its economic growth rate. That’s the result Ohio can hope for by seriously addressing regulatory accumulation. But it will only happen by truly cutting red tape—not by moving regulations from one publisher to another. In other words, it means heeding the spirit of the law, not just the letter.