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Thursday, December 9th, 2021
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MADISON — Talk about overregulation.

The Wisconsin Administrative Code contained 12.25 million words as of 2020. At a normal pace of reading, it would take more than four months to get through this Byzantine monster that impacts the lives, at some level, of every man, woman and child in Wisconsin.

A new study from the Wisconsin Institute for Law & Liberty and the University of Wisconsin-La Crosse Menard Family Initiative drills down on the state of regulation in the Badger State, how we got here and why reform is so critical to loosening the restrictions on liberty.

“Wisconsin Regulation in Focus” finds the state’s big book of regulations includes more than 161,000 regulatory restrictions, not including requirements handed down by unelected bureaucrats through policy documents or the regs the Legislature puts in place directly via statute. The count also doesn’t include the mountainous local and federal regulations on the books.

The 161,000-plus state rules and regulations are above average for U.S. states and more than many of Wisconsin’s neighbors, according to the study’s authors, James Broughel, senior research fellow at the Mercatus Institute and Adam Hoffer, research fellow and Menard Family Initiative director.

All those regulations are oppressive — and they are costing Wisconsin prosperity and economic freedom. A recent study estimated that federal regulatory growth from 1997 to 2015 is associated with 85,281 more people living in poverty in Wisconsin, 3.2 percent higher income inequality in the state, 170 fewer businesses annually, 2,620 lost jobs annually, and 7.35 percent higher prices. In an era of soaring inflation, the negative impacts of overregulation become that much more pronounced.

“Regulations impose restrictions on individuals and businesses, limiting the scope of allowable behavior or mandating that certain behaviors be followed. These rules carry the force of law, but unlike statutes, which are written by elected representatives of the public and signed by an elected official like a governor or the president, regulations are primarily written by unelected, career civil servants, under lawmaking authority delegated to them by elected representatives,” the report notes.

Rules of engagement 

Each state’s Administrative State is governed by the Administrative Procedure Act, the mechanism for rulemaking. They’re similar to the federal system. Wisconsin’s APA, adopted in 1943, predates the federal APA by three years, according to the study.

Wisconsin regulatory agencies begin by preparing a “statement of scope,” occurring prior to a regulation being formally proposed. It’s supposed to encourage initial investigation into the potential need for a rule. The statement is then reviewed by the state Department of Administration and must be approved by the governor before it’s sent to the Legislative Reference Bureau for publication. The Legislature’s Joint Committee for the Review of Rules (JCRAR) can direct the agency to hold a public hearing and comment period.

A formerly proposed rule must go through an economic analysis specifying the “problem the agency is trying to solve” and includes cost and benefit estimates of the proposal. The findings can trigger more study and much more paperwork. Other boards and committees get involved, including the Small Business Regulatory Review Board. Then more study, another trip to the governor’s office, then off to another legislative committee before the regulation can be added to the big book.

Thanks to Wisconsin’s REINS Act, signed by former Gov. Scott Walker,  proposed rules must also face scrutiny of impact. If review finds a rule could cost more than $10 million to implement over a two-year period, the agency must seek approval from the Legislature and a bill must be passed before rulemaking can resume. There’s another review process for existing regulations.

It’s very involved and keeps thousands of bureaucrats on the taxpayer payroll. And still the state’s administrative code would take 681 hours to read. While the existing process of review seems thorough, “some of these oversight mechanisms have yet to be used to their full potential,” WILL’s report notes.

‘Except and notwithstanding’ 

Most regulations are written so that they cannot be easily understood by the average person. The complexity of the language makes it difficult to comply with the rules.

According to the report, Wisconsin Administrative Code averages 41 conditional terms per part of code, where conditionals refer to the terms “if,” “but,” “except,” “provided,” “when,” “where,” “whenever,” “unless,” “notwithstanding,” “in the event,” and “in no event.”

“Sentences that include these conditionals may contain more information or caveats and therefore be harder to comprehend,” the study states.

Some industries, of course, are pestered by the government more than others.

An October 2020 report found that Wisconsin regulates petroleum and coal products manufacturing, as well as paper manufacturing, more than any other state. The Mercatus Center research shows Wisconsin industries are about 81 percent more regulated than industries across the nation were in 1997.

“Moreover, the unintended consequences of regulations are not purely financial. When real incomes fall as regulatory costs are passed on to customers in the form of higher prices and workers in the form of lower wages, households and families have fewer resources available to spend on other priorities, such as on doctor’s visits, safer vehicles, or moving to a safer neighborhood,” WILL’s report states.

Reforming the monster 

The report encourages Wisconsin take better advantage of its existing regulatory oversight processes while adopting some best practices from its neighbors. It points to Minnesota, which enforces a form of “formal rulemaking,” which includes “trial-like procedures, overseen by an administrative law judge, and involves presentation of evidence, and allows for cross-examination of witnesses.”

“Wisconsin has adopted some notable reforms in recent years, particularly with respect to legislative oversight of rulemaking. But these have yet to be used to an extent that is having measurable results,” the report concludes. “There is ample room for Wisconsin to become a leader in regulatory reform, much in the way the state led in terms of civil service and labor reforms in the early 2010s.”

“Now it’s up to their leaders to re-envision a regulatory framework worthy of the Badger State.”

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