Tuesday, June 25, 2024
49.0°F

Successful red tape relief means a brighter future

by Tanner Avery
| January 28, 2024 12:00 AM

More than 1000 days have passed since Gov. Greg Gianforte issued his very first executive order creating the Red Tape Relief Initiative with a mandate to conduct a top-to-bottom review of all regulations and identify unnecessary and overburdensome red tape to repeal. This was an extraordinarily big task to take on because at the time Montana’s regulatory code had ballooned to over 4.7 million words and nearly 60,000 separate regulatory restrictions, as measured by words like “shall,” “must” and “required” in the state’s administrative code. It would have taken a typical person nearly seven weeks to read every rule, assuming 40 hours per week at a normal pace of reading.

Fast forward to 2024 and the Red Tape Initiative has successfully achieved some impressive regulatory relief that is sure to benefit Montana’s economy far into the future. 

Frontier Institute’s newest Red Tape Snapshot report finds the 13 agencies under Gianforte’s jurisdiction have repealed or amended a total of 1,861 regulations, representing nearly one-fifth of all regulations under the governor’s jurisdiction when he took office in 2021. Thanks to these efforts, Montana saw a total reduction of 1,114 regulatory restrictions over the same time period. The Department of Labor and Industry alone has slashed the total restrictions imposed by the agency by over 11%.

While some regulation is necessary to protect health, safety and the environment, the accumulation of thousands of regulations over time has been shown to act as a dead weight on a state’s economic growth and substantially increase the cost of doing business. In fact, at the start of 2021, Montana’s heavy regulatory burden threatened to make our state less economically competitive than our regional neighbor states which have been focused on reducing, not adding regulations.

Some reforms spearheaded by the Red Tape Relief Initiative are already helping to make it easier to do business or get a job in Montana. 

For example, a simple change to the required journeyman-to-apprentice ratio for businesses offering apprenticeship programs has led to a record number of new apprentices in Montana building skills and entering the trades. Similar red tape relief efforts to modernize and eliminate overly burdensome regulations have made it easier for childcare providers to do business and for nurses to maintain their continuing education, among other examples.

While red tape relief is already tangibly improving Montanans lives today, the real benefits of these efforts will be seen in the decades ahead. Even a modest increase in yearly economic growth as a result of the past four years of reforms could have a serious impact on our state over the next 25 years. If, for example, Montana’s annual growth rate were to increase by even just 0.2% a year, the compounding effect could mean billions more economic value generated by 2050. 

Likewise, even a modest decrease in the cost of doing business could have an outsized impact on our state’s standing in the economy of the future. Studies show overburdensome regulations on critical industries can bring into question the feasibility of technologies essential for the future economy. Startups in emerging, highly innovative sectors like energy and semiconductors have extremely narrow margins which make them incredibly sensitive to cost increases – including cost increases due to excessive regulatory compliance. In fact, regulatory accumulation has been shown to disproportionately burden small businesses vs large businesses, crowding out entrepreneurs. Small reductions in Montana’s regulatory burden will help to make our state more attractive to the entrepreneur starting the next Amazon, Tesla, or Facebook. 

So far, the Red Tape Relief Initiative appears to have been successful at prompting a significant reduction in Montana’s regulatory burden. The good news is it’s only just getting started. Today’s commitment to red tape relief is sure to make Montana’s future economy more dynamic and our state more prosperous. 

Tanner Avery is the director of the Center for New Frontiers at the Helena based Frontier Institute.