**See updates below also.**

A sunset provision with periodic review is among a package of regulatory reforms that has been sent to the governor today — which would be the third year in a row the General Assembly has produced regulatory reforms.

Having a sunset provision would be vital to reforming North Carolina’s regulatory process. As discussed in my recent Spotlight report on the subject, 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. It was also found to have an economically significant impact.

Surveys of North Carolina business leaders conducted by the John Locke Foundation consistently found that the state’s tax burden was the No. 1 factor reducing the state’s competitiveness. They also found that the state’s regulatory burden was a growing impediment — quickly ranking second only to taxes.

For those reasons, I wrote last week that the prospect of tax reforms and regulatory reform this year was a potential one-two punch for job creation in North Carolina.

But will Gov. McCrory sign it?

I would have thought yes. The governor famously wants to rebrand North Carolina as open and friendly to business, job creation, and innovation. Cutting regulation is a reform that cuts taxes on time and doesn’t negatively impact state revenues. It gains the state nothing to impose more red tape; the economy will grow, and state revenues with it, by removing unnecessary impediments to doing business.

But I see in scare-red text atop WRAL’s web site right now this “ALERT”:

Just In: Gov. Pat McCrory said Friday he will sign the Voter ID/Elections Changes bill. He is considering a veto of two bills: One requires drug testing for recipients of public benefits and another outlines a package of regulatory reforms.

I certainly hope that the governor isn’t considering a foolish veto just for feeling obligated to veto something, to sacrifice something on the altar of assuaging upset leftists, or whatever other reason. The Republican-led General Assembly worked hard to override a Democratic governor’s veto of their first Regulatory Reform Act of 2011; I daresay they would be surprised to have this one vetoed by a fellow Republican.

Especially McCrory, who not only promised of rebranding North Carolina, but even boasted in The New York Times of

  • “problem-solving leadership”
  • “making the tough decisions”
  • “vital reforms”
  • “North Carolina’s new focus on reform is paying off”
  • “stepp[ing] on the toes of [those] vested in the old ways of doing business”
  • “collaborative, problem-solving, focused leadership”
  • “focus on pragmatic problem-solving”

Vetoing regulatory reforms would certainly flunk the “pragmatic problem-solving” test of leadership, would kill a vital reform in the crib, and — see Perdue, Gov. Bev, 2011 veto of regulatory reform — would clearly represent the old way of doing business in North Carolina; i.e., North Carolina’s old focus on avoiding reform.

**Update 3:54 p.m.**

WRAL has finally posted an article, in which it states:

McCrory now has 30 days to either sign the bills on his desk or allow them to become law without his signature. He has not signaled plans to veto any of the voluminous measures approved by his legislative allies.

I’m not sure what is responsible for the apparent total reversal in reports over possible vetoes (unless there is some semantic game being played along the lines of ‘considering’ is not ‘signaling’). I would hope this latter report is suggestive of good news for the prospects of significant regulatory reform in 2013.

**Update 8:55 p.m.**

I am less hopeful. Barry Smith’s report for Carolina Journal specifically mentions the regulatory reform bill, H.B. 74, as one of the bills the governor is concerned about; specifically, its provisions concerning billboards and landfills. See Mitch Kokai’s comment below, also.

WRAL posted another article in which it states,

McCrory said he is considering a veto of two bills that will come across his desk in the next few days. One would require drug testing for applicants of the welfare program known as WorkFirst; the other is a package of changes dealing mostly with landfill regulations.

It would be a shame for the state of North Carolina that a significant reform such as a sunset provision with periodic review would be waylaid out of concern over smaller matters that could just as easily be addressed in future legislative sessions.