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Point of View: Oklahoma can be a top 10 state for regulation

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James Broughel
James Broughel

During his campaign and again in his January inaugural speech, Gov. Kevin Stitt pledged to push Oklahoma into the “top 10.” To date he has been vague about the specifics, but there is one area where he can easily make a difference: Oklahoma is not considered a top 10 state for business by most observers. Its unnecessarily burdensome regulatory environment has something to do with that.

As part of a project for the Mercatus Center at George Mason University, I have spent more than two years reviewing state administrative codes. Most are too long to read from start to finish (the Oklahoma Administrative Code would take about 13 weeks), but by employing modern technology, scraping government websites for data and parsing regulatory text for critical words and phrases, we can learn a lot.

Oklahoma’s regulatory code, for example, contains more than 9 million words, 145,296 of which are restrictive terms like “shall,” “must” or “required” — a proxy for the number of mandates and prohibitions.

The average state among the 34 we’ve analyzed has 10,000 fewer restrictions than Oklahoma. Neighbor Kansas has just 71,000. Idaho and Arizona are closer to 60,000.

Not surprisingly, Idaho, with its hands-off regulatory climate, is one of the two fastest-growing states in terms of population growth. Oklahoma is a desirable place to live, with its laid-back attitude and low cost of living, but it also has stiff competition from its huge, aggressively pro-business neighbor to the south.

If Oklahoma wants to retain talent — or better yet, attract more businesses and ambitious young people — it should focus on becoming a top 10 state for smart, efficient and light-touch regulation. Some regulations have benefits, of course, but too many reduce investment, leading to fewer business startups and slower employment growth.

Fortunately, Stitt is making progress. He recently obtained authority to appoint directors at several of Oklahoma’s largest regulatory agencies. This should add some much-needed oversight and accountability. He also issued an executive order requiring regulatory agencies to reveal any funds used to hire lobbyists to do their bidding at the state Capitol.

Governors in other states would be shocked to hear that until recently, Oklahoma governors couldn’t appoint their own leaders at some of the largest state agencies, or that those agencies routinely used taxpayer money to lobby legislators in the same way private special interests do.

But there is more work to be done. A recent report found that there are more than 200 agencies, boards and commissions in Oklahoma, including a Boll Weevil Eradication Organization and a Sheep and Wool Utilization Research and Market Development Commission. Surely, some of these could be eliminated or consolidated into another agency.

Some states are turning the regulatory tide in the other direction. Notably, two of the least-regulated states, Arizona and Idaho, both have ongoing red tape-cutting initiatives. Idaho Gov. Brad Little recently signed an executive order requiring that for every new rule proposed, two existing rules must be repealed or significantly simplified. Oklahoma may want to follow Idaho’s lead.

Oklahoma has a lot going for it. But when it comes to regulation, the Sooner State isn't close to the top 10. There are 145,000 reasons to start reining in red tape, helping make Oklahoma a magnet for people and businesses for years to come.

Broughel is a senior research fellow with the Mercatus Center at George Mason University and author of the new study “A Snapshot of Oklahoma Regulation in 2019.”

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