Ohio is Model for Regulatory Reform

Rea S. Hederman Jr. Sep 18, 2023

RealClearPolicy first published this opinion piece.

Ronald Reagan once quipped that the nine scariest words in the English language were “I’m from the government, and I’m here to help.” Every year, the government “helps” companies, consumers, and taxpayers by passing statutes and enforcing regulatory regimes that regrettably do more unintended harm than the well-intended good.

And Washington is not the only government that arrives ready to help with new rules and requirements. State regulations make it harder to start new businesses. They get in the way of new careers. They keep new products from coming to market. They raise the prices of virtually everything we buy and sell as the cost of bureaucratic regulation ripples through economies, communities, and households.

But some states have had enough, and their residents and elected leaders have demanded change. Ohio is one of them. One of the most heavily regulated states in the country several years ago with nearly 247,000 restrictions on its books, Ohio has taken pruning shears to its overgrown red tape regime, offering other reform-minded states a workable model to follow for cutting back bureaucracy.

Perhaps Ohio’s most significant recent rule-making reform effort was last year’s Senate Bill 9. That legislation created an inventory of every state agency rule; forced policymakers to prioritize proposed rules carefully by capping regulatory restrictions; required agencies to remove two old restrictions before adding a new one; opened an online portal for regulated businesses to access information about any new rules; and—perhaps most importantly—required state agencies to reduce their regulatory restrictions by 30 percent by 2025. Addition by subtraction, as they say.

Prior to Senate Bill 9 in 2022, the state’s General Assembly pursued other commonsense reforms promoted by economists, government watchdogs, and The Buckeye Institute.

In 2016, for instance, Ohio removed an unnecessary mandatory license for hair salon managers that required cosmetologists to log an extra 300 hours of training—in addition to the 1,500 training hours needed for the state’s cosmetology license. A small but significant victory that saves hair stylists thousands of dollars and reminds states that even little steps in the right direction can make a big difference.

A broader win occurred in 2019, when Ohio took on a dysfunctional crony capitalism that benefits the politically well-connected to the disadvantage of up-and-coming competition. Senate Bill 255 requires the state to seek the least restrictive regulation when addressing definable public safety concerns and requires every occupational licensing board to be renewed at least once every six years or automatically expire. In 2021, and again in 2023, the General Assembly reviewed roughly one-third of the state’s occupational licenses and eliminated or reduced redundant training requirements for 55 licenses.

In 2020, Ohio recognized the sacrifices and difficulties of our nation’s service men and women even while serving at home and removed needless barriers to employment for military spouses. The General Assembly granted reciprocity for out-of-state occupational licenses to spouses of active-duty military men and women relocated to Ohio so that they can continue working in their chosen field. Building on this reform’s success and commonsense, Ohio has since extended universal occupational licensing reciprocity to everyone holding a valid out-of-state license. The move will help ease worker shortages in a tight labor market by encouraging more skilled workers to pursue their careers in Ohio. Lower the barriers to entry and more will enter.

Finally, Ohio recently began building “regulatory sandboxes” in its own backyard to support promising innovation while protecting consumers from potentially harmful new products. The state’s first sandbox offers approved financial technology firms a controlled regulatory environment in which to test new products and services for a limited time. The sandbox gives regulators a chance to understand the innovations and craft a more balanced regulatory framework to support it—or at least not strangle it with overzealous red tape.

These examples highlight just a few of Ohio’s recent regulatory reform achievements, and more remains to be done. But for states that are ready and truly “here to help” their own businesses and employees grow, work, and succeed, Ohio is showing them how.

Rea S. Hederman Jr. is the vice president of policy at The Buckeye Institute.