Governor Youngkin’s Reaganesque Approach to Regulatory Reform Should be a Model for Other States

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Regulations, while usually well-intentioned, are often a drag on economic growth. They increase costs for businesses, stifle innovation, and can create barriers to entry for new entrepreneurs.

With a runaway administrative state, simple laws passed by Congress or a state’s legislature can become complex and burdensome rules that require hordes of lawyers or already overburdened judges to interpret and measure compliance. This is what led to one of the most consequential Supreme Court decisions in recent memory: the rejection of the Chevron deference in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce. These cases end the long-standing practice of courts deferring to regulatory agencies when the implementing laws are unclear or ambiguous.

This is why regulatory reform is more critical than ever. Rules must now be streamlined and clear and follow legislative language. Not only is this good governance, but it is also crucial for a healthy economy. Reducing regulations, eliminating redundancies, and lowering regulatory burdens will unleash the economy — leading to job creation, increased investment, and greater prosperity.

This was well understood by President Reagan who recognized the stifling effect of excessive regulation and led to his establishment of the Office of Information and Regulatory Affairs (OIRA) in 1980. Reagan appointed an all star cast of founding administrators like James C. Miller III, Christopher C. DeMuth, and Douglas Ginsburg, who led OIRA in a key role reviewing and analyzing proposed regulations, ensuring they were cost-effective and aligned with the administration’s goals. They also led the charge in eliminating unnecessary or poorly crafted regulations.

This focus on regulatory efficiency helped pave the way for the economic expansion of the 1980s.

The Commonwealth of Virginia has established its own version of Reagan’s OIRA — similarly named the Office of Regulatory Management (ORM). Its leader, Reeve T. Bull, recently wrote about his office’s successes in the Regulatory Review, a publication of the Penn Program on Regulation. The article provides a great overview of the “Virginia Model” for regulatory modernization, as spearheaded by Governor Glenn Youngkin.

By establishing the Office of Regulatory Management, Virginia made a commitment to cut red tape and enhance both transparency and efficiency in regulations and permitting processes. The ambitious goal? A 25 percent reduction in regulatory requirements and a significant decrease in permit processing times. After just two years, the results are impressive.

This article effectively outlines the Virginia Model and its benefits, showcasing concrete examples of how this approach has yielded positive results. For instance, the Virginia Department of Housing and Community Development (VDHCD) successfully trimmed over $24,000 from the cost of building a new home by eliminating unnecessary and costly requirements from its 2021 building code. Similarly, the Department of Professional and Occupational Regulation (DPOR) streamlined the licensing process for various professions, leading to an estimated $274 million per year increase in professionals’ earning potential.

The Virginia Model has also made significant strides in improving environmental regulations. The Department of Environmental Quality (DEQ) simplified the stormwater permitting process and introduced new compliance pathways, resulting in an estimated $124 million in annual savings for Virginia businesses. Furthermore, the Marine Resources Commission implemented a more efficient “general permit” for work in subaqueous beds, saving businesses an estimated $47 million per year.

The ORM estimates that it will save Virginians at least $2.4 billion over two years. More specifically, it estimates that their work represents about $380 in the bank account of each Virginia household every year.

These are just a few examples from Director Reeve T. Bull’s Regulatory Review article on how Virginia has successfully improved regulatory efficiency. This model offers a valuable framework for any state seeking to reduce the burden of regulation on businesses and citizens, ultimately fostering a more dynamic and prosperous economy.

The success of the Virginia Model, building upon the legacy of initiatives like OIRA, underscores a crucial point: regulatory reform is not a one-time event, but rather an ongoing process. To maintain a healthy and vibrant economy, governments must remain vigilant in identifying and eliminating unnecessary regulatory burdens. By continually evaluating existing regulations and streamlining processes, states can create an environment where businesses can thrive, innovation can flourish, and citizens can prosper.