Spotlight Report

Not Written in Stone: How sunset laws can improve North Carolina’s regulatory climate

posted on in Law & Regulation
Featured Image

•  Overregulation is a well-recognized problem by members of both political parties. Regulation imposes significant costs on the economy through deadweight loss — i.e., labor and capital employed in complying with government edicts and red tape, as opposed to being used for productive purposes.
•  Unlike cutting taxes, cutting regulations doesn’t require having government make do with less revenue in Year One.
•  Regulations are taxes on time, which for industry translate into real monetary costs. Reducing regulation allows more time to be spent instead on productive activities, encouraging more entrepreneurship, more job opportunities, and more economic growth — which in turn means government collecting more revenue in a more vibrant economy.
•  A stronger form of periodic review, sunsetting is having government regulations, programs, and agencies conclude after a set period of time unless positive action is taken by the government to reauthorize them.
•  A 2012 study conducted by the Mercatus Center of George Mason University of different kinds of regulatory review processes used in all 50 states found that the presence of a sunset provision was “robustly statistically significant” in reducing a state’s regulatory burden.
•  Furthermore, the Mercatus study found that a sunset provision’s impact was also economically significant.
•  With North Carolina bound up in over 22,500 permanent administrative rules, Democrat and Republican leaders alike have recently taken actions against overregulation. A measure before the current General Assembly would institute a process for periodic review and sunset of rules.
•  An effective sunset approach needs an effective “sunrise” approach, including a REINS law, strong cost/benefit analysis, requiring agencies to consider alternatives to regulation, stating regulations’ objectives and outcome measures by which to hold them accountable, no-more-stringent laws, regulatory reciprocity, and small business flexibility analysis.

Spotlight 439 Not Written in Stone: How sunset laws can improve North Carolina’s regulatory climate

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jon gets into the weeds in all kinds of policy areas, including electricity, occupational licensing, hydraulic… ...

Donate Today

About John Locke Foundation

We are North Carolina’s Most Trusted and Influential Source of Common Sense. The John Locke Foundation was created in 1990 as an independent, nonprofit think tank that would work “for truth, for freedom, and for the future of North Carolina.” The Foundation is named for John Locke (1632-1704), an English philosopher whose writings inspired Thomas Jefferson and the other Founders.

The John Locke Foundation is a 501(c)(3) research institute and is funded solely from voluntary contributions from individuals, corporations, and charitable foundations.