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According to a Mercatus Center report published in 2021, when it came to state-level red tape, Ohio was the third-most regulated state in the country after California and New York.
The regulatory environment had harmed Ohio families by eroding entrepreneurship, innovation, and economic opportunity.
Mercatus concluded the increase in Ohio’s regulatory burden from 1997 to 2015 had pushed nearly a quarter of a million people into poverty.
Something needed to be done to reverse the state’s economic stagnation.
State Senator Kristina Roegner introduced Senate Bill 9, the Red Tape Reduction Act.
Americans for Prosperity-Ohio supported the legislation and, in early 2022, Senator Roegner’s colleagues approved the bill.
Governor Mike DeWine signed the Red Tape Reduction Act into law in March 2022 and the legislation took effect on June 24, 2022.
These regulatory reforms had an immediate impact on the state’s business climate.
The 2021 Mercatus report identified more than a quarter of a million regulations on the books in Ohio.
As Senator Roegner explained in a video, these rules accumulated over the years as well-meaning legislators passed legislation related to everything from health and safety to energy and the environment to tax policy.
But the rules and regulations promulgated from even well-meaning laws “build up,” acting a “sludge in our economic engine,” Senator Roegner explained.
“Red tape has a very real, tangible impact on Ohio’s economic competitiveness,” AFP-Ohio State Director Donovan O’Neil said. In addition to increasing the state’s poverty rate, Mercatus determined the rise in Ohio’s regulatory burden resulted in:
It was time to do something.
Senator Roegner’s Red Tape Reduction Act will cut state regulations by 30% over three years.
It will achieve this goal by requiring certain state agencies to examine what rules they can eliminate. If an agency does not meet the 30% benchmark by June 2025, it will be required to cut two regulations for each new one it adds to the rulebook after that point.
The new law also gives state lawmakers a chance to override executive branch regulations if those rules:
Senator Roegner’s bill also will make it easier for Ohio citizens to understand the full scope of state regulations. A new online resource, www.cutredtape.ohio.gov, allows consumers and small businesses to request information about state regulations and to communicate with the Joint Committee on Agency Rule Review about how those rules reduce economic opportunity.
The National Federation of Independent Business said Senate Bill 9 puts Ohio on “the path to achieving a regulatory climate that protects public safety and welfare while ensuring … small businesses are not overburdened.”
Brad Gibson, owner of Gibson Electrical, LLC, agreed. He called the Red Tape Reduction Act “the model of what the rest of the United States should follow.”
Gibson said the inconsistency and volume of state regulations had stifled his ability to expand his business. The website makes sure his voice “is directly heard” by state policymakers.
Americans for Prosperity-Ohio rallied support for Senator Roegner’s bill, providing testimony in both the statehouse and Senate and supporting entrepreneurs, innovators, and consumers as they shared stories with lawmakers about how burdensome regulations had affected them.
“This was something we could tackle,” O’Neil said. “We’re bringing bottom up solutions on regulatory reform to the people.”
Senator Roegner praised AFP-Ohio’s work.
“They stand for everything that’s right about getting the economy going,” she said about AFP-Ohio’s grassroots advocates.
Senator Roegner called her bill “a game changer” that will allow businesses “to focus on what they do best — their business.”
The Red Tape Reduction Act already is having an impact.
When State Representative Roegner took office in 2011, a survey of CEOs by Chief Executive magazine ranked Ohio as one of the worst states in the country to do business.
In its most recent survey, released last year, Ohio was ranked as the seventh best place for business.
Going bold on principled regulatory reform works.
Read more about AFP-Ohio’s work at BuckeyeBlueprint.Com.
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