Ohio has become a model of regulatory reform, winning victory after victory against outdated, bureaucratic red tape that makes it harder for businesses to operate and workers to find jobs. Senate Bill 9 requires Ohio to reduce its 155,233 regulations by 30 percent by 2025, a yeoman’s task that is already well underway. And Senate Bill 131 recognizes out-of-state occupational licenses, which will make it easier for licensed professionals to relocate to Ohio. These are solid wins championed by The Buckeye Institute, but this is no time for the state to rest on its laurels.  

The Joint Committee on Agency Rule Review (JCARR), authorized by Senate Bill 9, reviews state regulations to ensure their compliance with Ohio law, and has published a regulatory inventory. Almost 80 percent of these regulations derive from Ohio law or state agencies. Much of the state’s regulatory apparatus comes from the agencies’ general rule-making authority, while some state agencies—such as the Ohio Environmental Protection Agency—enforce requirements coming from Washington that lie beyond the reach of Senate Bill 9.
 
But even as the JCARR and state agencies look to cut more of Ohio’s red tape, they should be mindful of several things when promulgating any new rules or requirements. First, agencies should be wary of regulations proposed by outside groups and trade associations. The National Association of Insurance Commissioners (NAIC), for example, works with state administrators across the country to adopt rules affecting the insurance industry. But what works in another state may not be right for Ohio, and any NAIC proposals should be carefully scrutinized for Senate Bill 9 compliance. Moreover, as the Federal Trade Commission has warned, trade associations may collude to propose rules that reduce competition within a given market, which benefits market actors but hurts consumers and would-be competitors.

Second, any new regulations should be transparent and adopted carefully so as not to favor large companies over smaller ones, or create hurdles for new competition. Regulators should look for ways to make markets fairer and more competitive, not less. They should root out anti-competitive practices such as NAIC’s proposal to impose different capital requirements on different companies without strong evidence that those differences are necessary.

And finally, the General Assembly and Ohio regulators should ensure that groups proposing regulations do not receive financial benefits from the new rules they propose. Allowing trade associations and other groups to benefit from the very regulations they advocate will only encourage more regulation and regulatory advocacy—threatening the reform victories and successes that Ohio has enjoyed thus far.

Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute.