But reforms via statute might help Wisconsin avoid a still more onerous environment
Fixing the damage wreaked by the Wisconsin Supreme Court when it stripped the Legislature of its power to halt bureaucrats’ regulations will take a constitutional amendment, say legal experts — though reforms in statute can help in the interim.
That damage so far includes a rush of new regulations, including a 1,700 percent increase in state fees on livestock auctions and a complex, expensive wholesale revision of the state’s commercial building code.
Lawmakers on the Joint Committee for Review of Administrative Rules had the ability to delay or block such regulations until the Supreme Court ruled 4-3 in July to strip JCRAR of its authority. The bureaucracy may now propose, promulgate and enforce a regulation with only the governor’s say-so.
“Fixing this is going to require a constitutional amendment, because the Supreme Court declared the current procedure to be unconstitutional,” said Dan Kelly, a former state Supreme Court justice who has done legal policy analysis on the issue for the Badger Institute.
“It’s not just that it conflicted with another statute, which is a problem that could be fixed statutorily. They said it’s unconstitutional. So it’s going to require a constitutional amendment to fix it.”
Constitutional amendments take time, however — two successive legislative sessions and a referendum — and new rules and regulations are already being written.
Wisconsin already ranks as one of the most heavily regulated states, enduring the second highest number of regulatory restrictions of all states in the Midwest, according to Patrick McLaughlin, a regulatory economist with the Hoover Institution. The Badger State has a worse regulatory environment than every one of Wisconsin’s neighbors but for Illinois, considerably more restrictive than even Minnesota, he told a Capitol gathering of lawmakers and policy staff in Madison this week.
Cutting Wisconsin’s regulatory burden to something more like even Minnesota’s could add considerably to our economic growth. McLaughlin estimates a one-third cut in regulatory burden adds about a percentage point to the growth rate because for businesses, “Every dollar or minute spent on regulatory compliance is a dollar or minute not spent on making stuff or investing in growth.”
McLaughlin spoke as legislators are considering a package of four bills to check regulators’ powers.
One, a “sunset review” bill, would have a regulation expire after seven years unless the Legislature’s oversight committee assents to extending it for another seven years.
Another would have the state reimburse legal costs for a citizen who successfully challenges the validity of a regulation in court.
A third limits regulators to one new regulation per “scope statement,” the public document that serves as a warning to those who might be affected.
A fourth imposes a “regulatory budgeting” system on bureaucrats, requiring that agencies offset the expected costs a rule would impose on the public by repealing or changing existing regulations, or getting legislative approval to impose the rule.
“We want to grow the size of Wisconsin’s economy — not its rulebook,” said Sen. Julian Bradley (R-New Berlin), when the bills were introduced last spring. The package got a hearing in the Assembly on Thursday. But if it passes the Legislature, it still faces Gov. Tony Evers, whose lawsuit against legislative oversight led to the Supreme Court case, dubbed Marklein II, that ended it.
That’s why such reforms aren’t enough on their own, said Kelly.
“I think they’re bandages,” he said.
“Bandages serve a purpose — and an important one. They stop you from bleeding, getting infected, so I would not denigrate any of those ideas as being not useful, as long as they’re understood as being bandages. They do have the possibility of distraction, because if you pass them, then people might say, yeah, okay, we’ve fixed it. And now we can go back to business as usual.”
“The problem is a bandage is meant to be a temporary fix. It’s not a long-term cure.”
There are a variety of potential amendments ranging from a straightforward declaration that pre-Marklein II process is, in fact, constitutional, to a simpler but far-reaching shift to requiring legislative approval for every regulatory proposal the executive branch makes.
Such an amendment would address a critique by dissenting justices in Marklein II that regulators are imposing what Wisconsinites must obey as law without the concurrence of two branches of government that laws require. But observers suggest it might be a lot for lawmakers and voters to adjust to as it overturns a century of regulatory growth.
No one pathway has solidified into an introduced proposal yet, and while an amendment would be immune to a governor’s opposition — the governor has no role in Wisconsin’s amendment process — any amendment would face headwinds.
One is the criticism that legislators move too slowly, or not at all, on rules needed in a complicated and evolving society.
But supporters of limits on regulatory agencies point out that legislatures can move more swiftly than regulators’ rulemaking process to enact laws for which there is a broad popular consensus.
Another headwind: Growth in the power of regulators has come because legislators, in states and federally, have outsourced the details and hard choices of implementation of laws to bureaucracies as a way of avoiding voter backlash.
Legislative oversight is not only a matter of power but of responsibility, said Kelly: “The problem here is that we are allowing legislators to shuck off their responsibility to be exercised by people who are not democratically accountable.”
Patrick McIlheran is the Director of Policy at the Badger Institute.
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