Texas scores a "D-" in its regulatory process

As the Texas Sunset Advisory Committee takes a look at our environmental regulatory agencies this interim, perhaps they should consider Texas’ grade in a new report released by the Institute for Policy Integrity – a “D minus” the lowest possible grade of all the states reviewed because of  inadequacies in  how our regulatory decisions are made. The results of that report point to billions of dollars wasted and inadequate protections for Texans.

Institute for Policy IntegrityThe Institute for Policy Integrity, a non-partisan advocacy organization and think-tank dedicated to improving the quality of governmental decisionmaking and sponsored by the New York University School of Law developed fifteen points of evaluation for an ideal regulatory process.  Among them: regulatory review that properly calibrates rules; review that is consistent and buffered from political influence; and review that provides a balanced treatment of costs and benefits.  The Institute took a look at how states routinely regulate industries whose economic footprints climb into the hundreds of millions.

Nearly twenty percent of the American economy is regulated by state governments. But there are major concerns about how regulatory decisions are made. The results of “52 Experiments with Regulatory Review” point to rules that are often made ad hoc and in too many cases yield inefficient results that limit public benefit, wasting billions of dollars and providing inadequate protections for Americans—earning states an average grade of “D+” with the lowest possible grade being a “D-.”  Seven jurisdictions scored a D-, having met none of the guiding principles: Alaska, Delaware, the District of Columbia, Georgia, Louisiana, New Mexico, and Texas.

After more than a year of research, surveys, and analysis, Policy Integrity compiled the regulatory practices of all fifty states (plus D.C. and Puerto Rico) in one document. Comparing each set of laws and guidelines on paper to direct feedback from leaders on the ground, the report “assigns states a grade based on an evaluation of the quality of their review process.  To read the entire report, click here.

The fifteen guiding principles used to evaluate state practices are:

  • #1: Regulatory review requirements should be realistic given resources.
  • #2: Regulatory review should calibrate rules, not simply be a check against them.
  • #3: Regulatory review should not unnecessarily delay or deter rulemaking.
  • #4: Regulatory review should be exercised consistently, not only on an ad hoc basis.
  • #5: Regulatory review should be guided by substantive standards, to ensure consistency and to increase accountability.
  • #6: At least part of the review process should be devoted to helping agencies coordinate.
  • #7: At least part of the review process should be devoted to combating agency inaction.
  • #8: Regulatory review should promote transparency and public participation.
  • #9: Periodic reviews of existing regulations should be guided by substantive standards.
  • #10: Periodic reviews of existing regulations should be balanced, consistent, and meaningful.
  • #11: Impact analyses should give balanced treatment to both costs and benefits.
  • #12: Impact analyses should be meaningfully incorporated into the rulemaking process.
  • #13: Impact analyses should focus on maximizing net benefits, not just on minimizing compliance costs.
  • #14: Impact analyses should consider a range of policy alternatives.
  • #15: Impact analyses should include a meaningful and balanced distributional analysis.

The Diagnosis:  Some problems persistently and universally plague state regulatory practices: a lack of resources to conduct analysis and review rules; overly complex, duplicative, or obscure review requirements that deter agencies from pursuing regulations, reduce consistency, and block public transparency; and a historical bias that gives more attention to the potential costs of regulations than to their potential benefits.

Most states have some legislative review mechanism in place and require some economic impact analysis of proposed rules; many states also utilize gubernatorial review provisions, regulatory flexibility analysis requirements, or other structures. But most of these systems are not well designed to help calibrate regulations and maximize their net benefits. Over time, these lost benefits add up, and a poorly functioning review process cheats the public out of the efficient and effective regulatory climate that they deserve.

Here in Texas, we know that our regulatory agencies are not meeting the state’s need and this report just highlights that fact.  We would encourage each and every citizen to participate in the Sunset Review process to let our legislators know that we need change.

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By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas.