Senate bill would require regulators to jump more hurdles before imposing new licensing restrictions

Senate bill would require regulators to jump more hurdles before imposing new licensing restrictions

Regulatory regimes in Illinois often discourage workforce participation without enhancing public welfare. One Senate bill, however, would require regulators to demonstrate the necessity of new rules before imposing them on workers.

One bill floating through the General Assembly would subject regulators themselves to inspection.

Senate Bill 2776, filed Feb. 2 by state Sen. Pam Althoff, R-McHenry, establishes a system through which new professional regulations and licensing requirements must withstand independent scrutiny before becoming law.

The Regulatory Sunrise Review Act would require that an independent report weigh the necessity of pending regulation. The report would explicitly identify whether the absence of regulation over a given profession poses any “potential harm or threat to the public” and further provide “specific examples of the harm or threat identified.”

Critically, the report would offer lawmakers a perspective on the potential economic trade-offs caused by new regulation under review. SB 2776 would require these reports “address the social and economic costs and benefits of licensure,” and provide insight into proposed regulations’ potential impact on consumer prices and the labor market.

The right to earn a living isn’t always a given.

For many professionals seeking – or simply continuing – employment, one can expect to navigate a complex landscape of regulatory hurdles. Regulations involving occupational licensure, educational requirements and entrance fees impede economic activity while often delivering no measurable improvements to public health and safety.

This problem is exemplified by the story of Lisa Creason. Creason is a Decatur mom who suffered the consequences of a 2011 law that barred ex-offenders like her from acquiring a license to work as a registered nurse. Even though Creason had worked as a nursing assistant for more than a decade and passed all of her nursing tests, the law prevented her from acquiring the license needed to pursue her dream and move her family into a safer neighborhood. After years of fighting for reform, changes to the law allowing Creason and others like her to seek health care licensure took effect in 2017.

The city of Chicago’s thinning food truck population also offers an instructive example of the degree to which aggressive regulatory regimes can suppress workforce participation and discourage entrepreneurial drive.

While some policymakers are inclined to defend the often costly and complex nature of various occupational regulations as necessary to uphold consumer quality, the opposite is often true. Enforcing onerous barriers to entry against industry newcomers means market competition is limited, and thus quality can be compromised.

Worse, these barriers overwhelmingly limit low-income individuals aspiring to climb up the economic ladder. But this isn’t an unfortunate byproduct of protecting public welfare as much as it is a function of the system working as intended. Licensing boards are often composed of industry incumbents, who have an incentive to use licensure as a buffer against competition.

Moreover, a host of mechanisms through which firms and individuals can demonstrate quality assurance exist in the private sector. Fortunately, SB 2776 takes these into account, requiring reports on proposed regulations consider whether “market competition and third-party or consumer-created ratings and reviews” should suffice to remedy a supposed public disservice.

During a period in which the Land of Lincoln is experiencing labor force drawbacks, it’s encouraging that some lawmakers in Springfield have sought to explore ways to ease more Illinoisans’ efforts in achieving the security of employment.

Measures similar to Althoff’s include a trio of licensing reform proposals – House Bills 52085210 and 5211 – introduced into the House by state Rep. Tom Demmer, R-Dixon, and Senate Bill 2439, filed by state Sen. Scott M. Bennett, D-Champaign, which would prevent the state from revoking one’s occupational license for defaulting on student loan debt.

By advancing the Regulatory Sunrise Review Act, lawmakers would likewise advance the occupational prospects of Illinoisans.

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