On Thursday afternoon during President-elect Donald Trump‘s celebration of the successful effort to keep some Carrier manufacturing jobs in Indiana from moving to Mexico, he said “the biggest suprise of this whole political experience” for him had been that the top complaint of businesses wasn’t high taxes, it was onerous regulations. “Believe me, these great leaders of industry, and even the small business people who are just being crushed, if they have their choice between lower taxes and a major, massive cutting of regulations, they would take the regulations,” Mr. Trump said. “We need regulations for safety and environment and things,” he added, “but most of the regulations are nonsense.”
Coincidentally, about the same time Mr. Trump was speaking, Gov. Larry Hogan‘s office sent out the annual report of his Regulatory Reform Commission. Part of a broader effort to restructure state government and improve customer service, the panel made 187 recommendations affecting 200 regulations, all of which the governor intends to adopt. “The reforms in this report will improve our business climate, protect consumers, and benefit our environment,” Lt. Gov. Boyd Rutherford, who is an ex officio member of the commission, said in a statement.
But an examination of the actual reforms the commission proposed reveals that the work of reforming regulations isn’t a matter of eliminating the “job killing” rules that Mr. Hogan talked about frequently on the campaign trail. By and large, the commission’s work amounts not to hacking the Code of Maryland Regulations so much as updating references, eliminating reduncancy and streamlining procedures.
Here are what the administration identified as the highlights of the effort:
•Revising regulations for car dealerships and sales people to “remove outdated or irrelevant references and add flexibility to the licensing period.”
•Eliminating a rule requiring applicants for licenses to operate a cemetary to disclose any drug convictions since 1991.
•Limiting criminal record disqualifications for those seeking towing permits only to felonies or misdemeanors directly related to the industry, including DWI/DUI offenses.
•Providing flexibility to use new technologies for vehicle emissions inspections.
•Allowing electronic submission of licensure documents for those regulated by the Office of Health Care Quality.
•Eliminating a list of approved distance learning methods (things like computer disks) deemed acceptable for the Maryland Real Estate Commission.
•Updating Insurance Commission regulations related to disability claims to reflect newly passed legislation.
Our point is not that these things are unimportant. Taken in the aggregate, they are. Condensing review periods for license applications, allowing electronic submission of documents and removing references to obsolete technology or laws allows businesses big and small to operate more efficiently and with greater certainty. The point is more that the review isn’t turning up much in the way of what Mr. Trump might call “nonsense.” Regulations called for paper submission of documents, for example, because there was no alternative at the time. Reviews can be accomplished more quickly in many cases because it is now much easier for different agencies or jurisdictions to share information. Mr. Hogan is right to put some real effort into this, as well as other initiatives such as reviews of the structure of state government and of procurement rules.
But a regulatory change Mr. Hogan announced at the Maryland Association of Counties summer meeting in August shows the tricky balance the government must make in balancing the costs and benefits of regulations. Former Gov. Martin O’Malley’s administration in 2012 required that all new septic systems use the best available technology for preventing nitrogen pollution to contaminate groundwater, but Mr. Hogan is changing that rule to allow counties to permit traditional systems outside of critical areas. Abba Poliakoff, who chairs the regulatory reform commission, said the septic regulations came up repeatedly in meetings the group held around the state, with builders and property owners complaining that they add $10,000 or more to the cost of new construction or signficant renovation. “People complained bitterly about it,” he said.
But while the immediate cost of the O’Malley rule might be apparent, the long-term costs of the Hogan revision aren’t. No question, Mr. Hogan’s version will result in more nitrogen flowing into Maryland’s waterways, but how much will end up in the Chesapeake — where nitrogen oversaturation is a major problem — is unclear, as is the extent to which increased development will degrade rivers, streams and creeks outside the critical areas. Will the savings for property owners who can now install cheaper septic systems require more expensive solutions to limiting other sources of nitrogen? The Hogan adminsitraiton promises to pair this change with efforts to crack down on failing septic systems and to encourage communities to switch to public sewer systems. How successful will that be?
These aren’t easy questions, and while we likely would have come to a different judgment about the septic regulation, for example, we at least appreciate that the Hogan administration is trying to think things through in a systematic way and is acknowedging that there are trade-offs involved. Will Mr. Trump?
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