A Plea for Sanity: Keep Politics Out of the Regulatory Process

Each year, the Maryland General Assembly considers over 2,500 bills during its 90-day session. Because of this volume and due to limited time, it is difficult adequately to address each bill proposed. It would help if there were fewer bills, if certain categories of bill were simply ignored or ruled “off limits” or were dealt with externally.

As a member of the Senate Economic and Environmental Affairs Committee since 1991, I have noticed a disturbing trend – business and occupational groups looking for increased state regulation. Though this sounds paradoxical, it is not. Often represented by seasoned lobbyists, occupational groups seeking regulation make certain in advance that they can meet the would-be regulatory requirements. Then, such regulation serves admirably to keep out competitors.

During the 1997 session, legislation was introduced pertaining to the regulation of tattoo artists (House bills 386 and 50, which both failed), for-hire drivers (HB 1013, passed), private detectives (HB 294, passed), security guard agencies (HB 297, passed), bail-bond searchers for fugitive defendants (HB 108, failed), licensed security-system technicians (HB 1137, passed) and hair braiders (HB 515, passed), to name but a few. Over the years, the assembly has authorized a plethora of licensing schemes and other forms of regulation for governing myriad occupations and professions. Few regulatory stones are left unturned in Maryland.

It is the responsibility of legislators rationally to examine public policy and to make subsequent judgments solely in the public interest. Since politicization is so pervasive in everything a legislator does, we should minimize political considerations to the greatest extent possible. One means to achieve this would be to have a standardized review process for occupations requesting regulation. Take for example HB 515, mentioned above. This bill, which I am pleased to say passed, exempted African-style hair braiders from standard cosmetology licensing requirements. The question, however, is this: Why was it necessary to to bring the issue before the legislature to start with? No good purpose was served.

Sunrise Assessment

Maryland should move toward a neutral review process, with objective criteria to evaluate the necessity – or lack thereof – of formal regulation for new groups that seek state oversight. It was for this reason that during the 1997 session I sponsored Senate Joint Resolution 6, which would have created a joint executive/legislative unit to study the need to regulate new occupations and professions. I termed this a “sunrise assessment” provision. Legislative “sunset” provisions terminate rules no longer necessary; my sunrise assessment would have considered whether such regulations were necessary to start with. The unit could also have reviewed existing regulations with a view to sunsetting them if necessary. SJR 6 received an unfavorable report from the Economic Affairs Committee on April 4.

This was unfortunate because it is beyond question that there is a need to foster greater economic development in Maryland. Excessive government regulation of occupations and professions may have unintended side effects – such as stifling entrepreneurship. Regulation may, for example, decrease the availability of practitioners of a given service. Under the laws of supply and demand, this drives up the cost of the service in question. Regulatory requirements pertaining to professional qualifications increase the cost of entry into a profession through expenses relating to education, training and time. Increasingly, I have witnessed regulated groups seeking more continuing education courses for their members. During the 1997 session, continuing education requirements were requested for certified interior designers (HB 513, passed) and land surveyors (HB 784, no action). This inevitably means fewer practitioners, driving up costs and creating shortages in certain geographic areas.

While the public safety and health of our citizens are the primary reasons for any regulatory structure, there is a case to be made that extra layers of regulations may not necessarily improve the quality of a service or guarantee public safety. Critics of regulation point out that licensing only ensures competence at the time of entry into a profession and that requirements for continuing education may only marginally enhance competence during a practitioner’s career.1

1 Licensing may actually result in unfair or restrictive standards of admission into a profession – and may in some cases even be discriminatory. In 1992, the Maryland Association of Certified Public Accountants sought to increase the educational hours needed simply to sit the state CPA exam (HB 588/SB 313, referred to interim study). I opposed this legislation, which I thought might have barred capable accountants from achieving advancement.

At least 17 states currently have legislation identifying criteria for state regulation of new occupations and professions (sunrise laws), among them Arizona, California, Colorado, Georgia, Hawaii, Kansas, Michigan, Minnesota, Nebraska, North Carolina, Tennessee, Vermont, Virginia and Washington. These regulatory review laws range from a Georgia council created to review and analyze all bills pertaining to licensing or certification of all professions or businesses not already regulated by the state to formal criteria and a specified applications process in California. As Maryland considers a sunrise-assessment process that would guide future state licensing policies, some of these assessment criteria and questions legislators must consider are:2

What is the problem?
Has the public been harmed because the occupational group has not been regulated?
Why should the occupational group be regulated?
What specialized skills does the occupational group require to serve the public?
What efforts are being made to address the problem?
Has the occupational group established, and is the public effectively protected by, alternatives to formal regulation?
Will regulation of the occupational group be cost effective for the public?
Will regulation of the occupational group be harmful to the public by: restricting competition, controlling or decreasing the availability of practitioners, increasing the costs of goods and services, or promoting group self-interest over the public interest?
How will the regulatory activity be administered?
Who is sponsoring the regulatory program?
Have alternatives been considered?
Why is the regulation being sought?

When considering such questions, legislators take political concerns into account. But these should have no place in regulatory deliberations. The economic benefits and costs of regulating occupations and professions in the state may have a significant impact on Maryland’s economic development and competitiveness. If regulation there must be, it should be assessed professionally by a specifically created advisory unit. While the ultimate regulatory responsibility is with the elected legislature, Maryland would do better with a more objective and systematic review process.

Senator McCabe, a Republican, represents the 14th legislative district (Howard/Montgomery). He is a member of the Senate Economic and Environmental Affairs Committee.

End Notes

[Top] 1. Clearinghouse on Licensure, Enforcement and Regulation (CLEAR) and Council of State Governments (CSG), State Sunrise Programs: Deciding When to Regulate Health Professionals (Lexington, Ky.: CLEAR/CSG, 1986).

[Top] 2. CSG, Occupational Licensing: Questions a Legislator Should Ask (Lexington, Ky.: CSG, 1978).

Posted in: News Series, Regulation