Maryland Needs to Improve Its Regulatory Climate

Earlier this month, the Mercatus Center at George Mason University released a report comparing the regulatory restrictions in each state. Maryland is “only” the 21st most regulated state in the United States, but it still has over a hundred thousand state rules in its regulatory code. Perhaps its ranking makes it seem that Maryland is doing all right compared to other states, as it is in the middle of the pack. But a deeper look at the results shows a more troubling picture.

The report was produced by Mercatus Center Senior Research Fellow and Policy Analytics Director Patrick McLaughlin and Professor Dustin Chambers from Maryland’s Salisbury University. They found that the U.S. Code of Federal Regulations and Code of Maryland Regulations place over 1.2 million regulatory restrictions on Marylanders. Furthermore, the report asserted Maryland’s regulatory growth between 1997 and 2015 put over 109,000 Marylanders in poverty, causing the state to lose 2,292 jobs yearly and experience a 7.35% price increase.

The report doesn’t just compare the total number of regulations in each state; it breaks them down by sector. While Maryland’s overall regulatory regimes could be described as mediocre at best, it over-regulates some industries and regulates only a few less than the national average. For example, Maryland has over 5,000 more health service regulations than the average state. Additionally, it has around 2,000 more administrative services regulations and 1,500 more transportation regulations than the average state.

There are also some industries where Maryland has fewer regulations than average, such as Waste Management, Commerce, and Chemical Manufacturing. To some extent, these industries reduce the impact of the above overregulated sectors on Maryland’s score, which is why Maryland is wedged between Maine and Mississippi as the 21st most regulated state. However, Maryland still has more rules than many states that have heavy-handed regulatory systems, such as Hawaii, Connecticut, and Vermont.

The report proposes multiple solutions to address Maryland’s growing regulatory system, focusing on policies that balance regulation creation with regulation elimination. The first suggested reform is to create a “regulatory budget,” which would place a cap on how many regulations the state can have at one time. Requiring some percentage of rules to be cut, or a “one in, X out” rule, would be ways to accomplish this. Another reform would be to adopt regulatory sunsets, which require the legislature to explicitly renew regulations in order for them to continue, forcing periodic legislative reviews of existing rules.

While Maryland’s regulatory scheme is not as overbearing as some states, the negative impacts of its current system are real. Maryland should look at the results of this report and move in the direction many other states are: removing unnecessary red tape for businesses and ordinary citizens. That way, Maryland can come closer to becoming an economic leader.