Moratorium on Regulations

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One of Governor Jan Brewer’s first actions as governor was to impose a moratorium on new regulations. A new report is out on that issue. The Grand Canyon Institute’s report, “Why Arizona’s Regulatory Moratorium is Unnecessary,” reveals how moratoriums can lead to less public oversight and are not meeting the stated goal of creating more jobs. Grand Canyon Institute fellow Karen Smith, who wrote the report, will discuss her findings.

Ted Simons: The Grand Canyon institute is out with a new report that's critical of the governor's moratorium on new regulations. Grand Canyon institute fellow Karen Smith is here to talk about the study. Welcome to the program. Good to have you here.

Karen Smith: Thank you.

Ted Simons: You wrote this study. What was the actual focus?

Karen Smith: Well, the focus, Ted, was really on the state's regulatory moratorium, and for those of our listeners who may not know what that means, we do rules, state agencies do rules to implement laws. That's what they do. And so what happened with this moratorium was, in 2009 the governor issued a stop, essentially, on nearly all regulations. So except for those for public health and safety. So what we were interested in seeing was, you know, what was behind that. What was really behind that. She had claimed that they were job killers, and she is not alone in that. There are many people who believe that. And so the emphasis of our report was to look at, you know, was that true?

Ted Simons: How do you look at something like that?

Karen Smith: What we did in our analysis was take a time period. We took 2000-2012, we looked at all the regulations that had been approved in Arizona by year, and then we sort of looked at that against the background of Arizona's economy. To see where job growth was happening, and the state of the economy generally. And all of the regulation that occurred in Arizona on Kurd during the decade of really robust economic growth.

Ted Simons: I was going to say, previous governors, hall, Napolitano, what did we see as far as regulations during their administrations compared to this moratorium with Governor Brewer?

Karen Smith: One of the really interesting things that we discovered in our work was that 30%, about 30% of all the regulations that were approved during this -year time period occurred during governor hall's administration. She had one-fourth of the study period. And 40% of all the environmental regulations took place during governor hall's administration. I think that's something that a lot of people would find surprising. Governor Napolitano was governor for six years of our -year study period. I think not a surprise that about half of the regulations took place during her administration.

Ted Simons: Now, your report says that the public could be at risk because of this moratorium, especially on environmental regulations. But regulations in general is the public at risk?

Karen Smith: I think at risk is probably a bit strong. I think what we have said in our report was that these moratoriums can cause harm, and they can cause harm in a couple of different ways. It prevents state agencies from updating their rules to operate both in a current environment, and making sure they can operate in a future environment. You may remember the board of medical examiners had some difficulties a few months ago. One of the reasons that they had difficulties was that their rules were outdated. And that they were operating in that kind of an outdated environment. Certainly not the main reason for their troubles, but it was a reason. So that's one reason. A second reason that these moratoriums are harmful is that they create an antiregulatory bias that essentially paints all regulation as bad. And that's trouble going forward.

Ted Simons: So when the governor's office says that the state agencies now, because much this moratorium, they are more efficient, and this moratorium helped turn Arizona's economy around from the bad old days not too long ago, how would you respond?

Karen Smith: I would say that I would love to see the evidence for that. That's what I'd like to see. Because clearly, the evidence that we saw does not suggest that that is the case.

Ted Simons: And the evidence that you saw does not suggest that there's an added burden on the private sector when you talk about regulations, and that a moratorium on regulations or at least a radical easing helps create jobs and helps retain jobs, you're just not seeing that?

Karen Smith: We didn't see that having this regulatory moratorium had much of an effect on job growth at all. And in fact, when we looked at the early part of our study period, we had very robust growth at the same time that we had very robust regulatory activity.

Ted Simons: Now, I know in the study, environmental regulations were at the forefront. Other regulations were considered as well, correct?

Karen Smith: Yes.

Ted Simons: Which ones were those?

Karen Smith: We looked at all of the approved regulations that had taken place from -. And these run the gamut from the big major agencies, like the department of health services, and AHCCCS, to the little boards and commissions like the barber board and the cosmetology board. All of those agencies, boards, and commissions do rules. So what we were interested in seeing with all of the regulations was first, how many. Where were they occurring? And when were they occurring? In which administrations did we see more of this occurring? And what the Arizona story suggests is that most of the regulation that we have comes from health and human services. That's not surprising. The second largest area, transportation. That's also not surprising. The third largest area, environment. But very low in the scheme of things.

Ted Simons: All right. And real quickly, the Grand Canyon institute, talk to us about the institute.

Karen Smith: Grand Canyon institute is a new centrist think tank, it is a nonpartisan group, made up of former elected officials, many Republicans, many democrats, then others, some academics, some economists, so it is a group that really is focused on a centrist way of looking at public policy.

Ted Simons: All right. We thank you for joining us to tell us about the report. Good to have you here.

Karen Smith: Thank you.

Karen Smith:Fellow, Grand Canyon Institute;

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