Gov. Snyder and Legislature Must Address Regulatory Regime

(Editor’s note: The following is an edited version of a letter Mackinac Center President Joseph G. Lehman recently sent to Mackinac Center members.)

I’d like to share something with you from the president’s mailbag:

“Big disappointment with Joe’s (recent essay titled) ‘Good Start, Policymakers.’ Obstructive regulations are more detrimental to job providers and Michigan’s prosperity than either tax reform or public employee unions for a significant portion of employers … and individuals.”

The letter writer is a Mackinac Center supporter who manufactures high-tech precision goods, and he made a great point. My essay had praised lawmakers for lowering taxes, cutting corporate welfare and limiting the power of unions to bankrupt cities and schools. Although I urged lawmakers to take even stronger action, I did not highlight the huge problem of overregulation.

The crippling effect of overregulation is a theme I’m hearing more and more from the employers whose enterprises are the true engines of our economy. One of them told me on the phone recently, “The government can’t do any more with fiscal policy. It can’t do any more with monetary policy. The flywheel of the economy is stuck because growing hordes of bureaucrats are pouring sand into the gears.” (I’m paraphrasing just a little.)

It’s a federal and a state government problem. President Obama, speaking at a tax-subsidized battery plant in Holland, bragged about bypassing Congress to impose stricter fuel economy regulations on auto makers. “Think about it. That’s what we got done — and by the way we didn’t go through Congress to do it,” said the man who swore an oath to uphold the Constitution.

The National Labor Relations Board may get away with strong-arming Boeing by preventing the operation of its new multi-billion-dollar aircraft plant in South Carolina because employees there would not be forced to join a union. There is no legal precedent for such audacity.

Probably just about every Michigan business owner can tell a story of how state regulations crush opportunity and destroy wealth. Hart Enterprises, a maker of medical devices in Sparta, near Grand Rapids, was embroiled in a bitter battle with state regulators over expanding a parking lot into a disputed wetland. Only after years of costly legal wrangling, public relations battles, negotiations, and Mackinac Center case studies did the Department of Environmental Quality relent and Hart will now have space for new employees to park.

This was the right outcome, but it cost far too much and should have taken days or weeks, not years. Even if the department finally did the right thing, but we can also say it needs to be done thousands of times more just to give Michigan some kind of edge over other states.

Senior Environmental Analyst Russ Harding is leading the Mackinac Center’s charge on overregulation. His regulatory reform blueprint includes measures such as deadlines for issuing permits and “no regulation without representation.”

Regulation with representation would mean legislators, not unelected bureaucrats in state agencies, would have to approve the regulatory proposals that are now written by the regulators themselves. (Yes, it’s sadly true that most regulations are never approved in final form by the Legislature.) Enactment of our blueprint would also establish periodic reviews and sunsets of regulations.

Gov. Snyder has also appointed Russ to the Occupational Licensing Advisory Rules Committee, where he will advise the governor and the state’s Office of Regulatory Reinvention on state-imposed professional licensing requirements. In cases where professional licenses don’t clearly and directly protect public health and safety, there is little justification for them other than to empower bureaucrats and enrich license holders who want to make it harder for competitors to enter their field.

Gov. Snyder and the Legislature did get off to a good start, but they must keep the momentum going because their window of opportunity may be small. Overregulation is an excellent next action item for them.

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Joseph G. Lehman is president of the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.