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Illinois ranks third in the nation for industry regulations


Friday, December 6, 2019  |  Article  |  By Jim Moran | The Center Square

Business (10) , Economy (34)
A new report highlights significant differences in the number of industry regulations at the state level, including in Illinois, which was ranked as one of the most regulated states in the nation.

The recent report from the Mercatus Center at George Mason University was part of the group's State RegData project. It looked at the number of industry regulations on the books across most of the country. Researchers said this was the first look at state business regulations. The findings found vast differences in the number of regulations among some states.

James Broughel, a senior research fellow at the Mercatus Center, said researchers looked at the rules written by executive departments and agencies, such as the labor department or state environmental protection agency.

“We see similar kinds of regulation in each state, but the overall amounts can vary pretty dramatically,” he said.  

Manufacturing, health care, food production, and occupational licensing industries tend to be the areas where there are the most regulations across all states. However, Broughel said, “the levels of regulation can vary dramatically.”

The study found Illinois has about 260,000 regulatory restrictions in its administrative code.

“It would take about 21 weeks to read the entire Illinois administrative code, if all you did was read regulations for 40 hours a week,” Broughel said.

Illinois has more regulatory laws on the books than its neighbors. Wisconsin had about 160,000 regulatory laws, which was about 100,000 fewer than Illinois. 

Missouri had about 113,000, Iowa had about 160,000, Indiana had about 92,000 and Michigan had 83,000.   

Broughel said Illinois could look to other states for regulatory reform ideas.

"There are a number of states that are engaged in innovative regulatory reform in the last number of years, they might be models for Illinois," he said.

Ohio was one Broughel cited as an example of regulatory reform. He said reforms passed this year required that for every new industry requirement put in the books, two needed to be removed.

The National Association of Manufacturers conducted a similar study in 2014 that looked at federal regulations. That study showed the average cost of federal regulations for a manufacturing business was about $19,000 a year.

Mark Denzler, president and CEO of the Illinois Manufacturers’ Association, said there is an obvious need for regulatory laws.

“But they need to be smart, they need to be efficient and they need to make sense,” he said.

The Mercatus study did not quantify the cost of state regulations. Denzler said state regulations add to the cost of doing business on top of federal regulations.

Denzler said Illinois was making progress, citing changes with Illinois EPA regulations. He said that changes now allow for more collaboration in the permitting process, where companies can work with the agency throughout the process.

“Instead of just submitting something for an up and down vote,” he said.

He said that allows businesses the opportunity to get guidance from the EPA while working through the process. Denzler called the Illinois EPA changes “an example of a smart law where business and industry are working with the government to do something in a streamlined fashion.”

When it comes to new laws, Denzler would like more transparency on the cost to businesses.

“I would love to see the General Assembly mandate that whatever new regulations that are introduced, some kind of fiscal or economic note is introduced, so we actually know what the cost is to private employers in the state of Illinois,” he said.

He also called for more of a collaborative effort between the state and the business community.

“I would encourage members of the general assembly and the administration to work with the regulating community,” he said.