Two Ways New Hampshire Can Have Very, Very Good State Regulations

Have you ever heard Henry Wadsworth Longfellow’s poem about the little girl with a little curl in the middle of her forehead? “When she was good,” the rhyme says, “She was very, very good.”

The regulations are a bit like that. When they’re good, they’re very, very good in that they make our food safe, our workplaces safe, and our environment clean at a reasonable cost. But when they’re bad, just like the little curl girl, they’re “awful.” They needlessly raise prices for consumers, cost jobs and reduce workers’ take-home pay.

As the next granite state legislative session begins, lawmakers may seek to improve the state’s regulatory environment. There are two relatively simple ways to do this: reduce unnecessary red tape and improve the economic analysis of regulations.

First, New Hampshire could consider a red tape reduction program as several other states have implemented in recent years. As part of its 2019 budget schedule, for example, Ohio asked state agencies to remove two regulatory restrictions from the books for every new one added through mid-2023. With 135,000 regulatory restrictions of its own, New Hampshire can certainly drop a few restrictions.

Texas passed a similar law in 2017, requiring that the costs of new regulations be offset by repealing or changing existing regulations of equal or greater cost. Another model comes from Virginia, a state that recently entered into a regulatory reduction pilot program that saw two state professional licensing regulators reduce the requirements by 27% and 14% each.

Red tape reduction efforts do not necessarily need to emerge from legislation passed by the legislature, either. The governors of Oklahoma, Arizona and Idaho have all signed executive orders in recent years, imposing compensatory regulatory provisions on regulators in their states.

A second reform to consider concerns the economic analysis of regulations. Like most states, New Hampshire already requires some form of this (known as a tax impact statement). In fact, New Hampshire is an innovator in this area because the analyzes are the responsibility of an independent office of 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 regulating agencies (and therefore not very objective).

That said, New Hampshire tax impact statements are often superficial documents, and the legislative budget assistant relies heavily on the agency to produce them. The analysis is not as rigorous or independent as it could be because the state does not invest enough in personnel capable of competently producing an analysis.

New Hampshire might consider following the example of West Virginia, which recently established a Regulatory and Tax Affairs Division to analyze the economic consequences of regulations and legislation. Like New Hampshire, this office is located in the legislative branch of government, isolating it from political interference by the governor. However, unlike New Hampshire, the West Virginia office is headed by a doctor. economist who supervises a team of tax analysts.

West Virginia recognizes that sometimes it takes money to make money – or in this scenario, to save money as well. For an analysis to be meaningful enough to actually inform state rule making, resources must be invested in the proper execution of the analysis. While this may cost the state money upfront, it will save public money by identifying ways to reduce the cost of regulation. In the long run, it will also allow the state to earn money through more jobs and economic growth.

Policymakers in the state of New Hampshire should take a page from fellow New Englishman Longfellow’s book of poetry. Regulations, like the Little Girl with the Little Curl, can behave erratically. But with a few small improvements to rulemaking procedures, the governor and lawmakers can help ensure that state regulations are very, very good, and not horrible.

Jacques Broughel is a Principal Investigator at the Mercatus Center at George Mason University.


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