AFP and Fulcrum Collaborate on Administrative State Reform that Sticks

Every governor inherits a massive regulatory code. It grew one rule at a time, each with a reason that made sense to someone. But agencies rarely revisit existing rules. And no one has considered the code in its entirety. The people who live under it, the contractor waiting on a permit, the nurse waiting on a license, the family waiting on a house, pay the price every day in delays and excess compliance costs.

The good news is that states have figured out what to do about it. Over the past several years, Virginia, Texas, Idaho, and others have shown that a state can shrink its regulatory burden, speed up its permits, and make its rules more transparent without touching a single health or safety protection. The reforms are not partisan and they are not mysterious. But they require careful management.

Americans for Prosperity and the Fulcrum Foundation are proud to collaborate on addressing these challenges.  AFP has decades of experience working with state legislators and other policymakers to pass proven regulatory reforms.  The Fulcrum Foundation has a leadership team that has been on the front lines of implementing regulatory reforms and ensuring that they succeed.  Working together, AFP and Fulcrum collaborate with states to pass regulatory reforms that promote far more transparent, efficient, and responsive administrative state.

The first reform is the least glamorous and the most important. A state should be able to show its citizens—in one place—every rule in force, every guidance document agencies use to interpret those rules, every document incorporated by reference, and every proposed rule with the analysis behind it. Alas, most states cannot. Guidance lives on agency websites or in internal files. Incorporated standards sit behind paywalls. The laws that actually govern a business are scattered across dozens of sources, leaving the good citizen who wants to follow it needing a lawyer to find it.

Targeted fixes can address this problem. For example, agencies should post all guidance documents in a single public catalog, with the understanding that anything not posted cannot be enforced. Agencies can also adopt a Unified Regulatory Plan, which is an annual, published list of every rule each agency intends to propose, amend, or repeal in the coming year, with the legal authority for each. Most ambitiously, states can launch chatbots that allow users to research legal obligations.  Texas led the way in launching its SAM tool, and the federal government recently followed suit with America.gov.

This is not transparency for its own sake. A searchable, machine-readable catalog is the data foundation for everything else on this list. It is what makes cost-benefit analysis possible, what gives an AI review something to scan, and what lets a governor see the full burden the executive branch has imposed.

In most states, no one in the governor’s office sees a regulation before it becomes law. Agencies write rules, hold the required hearing, and file them. The governor finds out when the complaints arrive. That is not meaningful oversight, and it is why so many rules do more harm than good: nobody with a statewide view ever asked whether the benefits justify the costs.

The fix is an Office of Regulatory Management (ORM), a small team in the governor’s office that reviews proposed rules before they go out, requires agencies to prepare a cost-benefit analysis, and works with them to find the least burdensome way to accomplish what the statute requires. The model is Virginia’s ORM, created by executive order in 2022, which reviewed every proposed regulation and guidance document in the Commonwealth with a staff that could fit around a conference table. The federal government has had the same thing, OIRA, since the early ‘80s. States have been slow to copy it, and the ones that have are seeing results.

The point is not to block rules. Most rules that reach a review office go out, often improved. The point is that a rule should have to earn its place. It should identify a real problem, cite real authority, compare real alternatives, and show that it does more good than harm.

Better review of new rules does nothing about the thousands already in force. Agencies will not revisit their own rules voluntarily; there is no reward for repeal and every incentive to leave things alone. This means the default has to change: rules should have to prove they are still worth keeping.

States have several possible tools at their disposal. First, sunset provisions let rules expire unless the agency re-adopts them through the full process, with updated analysis, which is the approach Idaho used to revamp and streamline its entire code. Second, percentage reduction targets, like Virginia’s 25 percent cut to discretionary requirements, give agencies a measurable assignment and a deadline. Finally, X-for-1 requirements, which oblige an agency to remove existing burdens before adding new ones, keep the stock from growing back. Texas’s new Regulatory Efficiency Office has added another approach: systematic agency-by-agency review that has already recommended numerous rules for amendment or repeal.

The common thread is that review becomes an obligation rather than a preference. Virginia did not streamline over a fourth of its discretionary requirements and achieve more than a billion dollars in estimated annual savings by asking agencies nicely. It set a target, measured against a baseline, and published the scoreboard.

For most citizens, the regulatory state is not a code. It is a permit. It is the months between applying to build and being allowed to build, the weeks between finishing nursing school and being allowed to work. Permitting is where regulatory reform stops being an abstraction, and it is where states have the most to gain quickly.

Two reforms carry most of the weight. The first is a shot clock: a statutory deadline for the agency to decide, with a consequence if it misses. Deemed approval is the strongest version. A refund of the application fee is another possible approach. Either changes incentives, because for the first time delay has a cost to someone other than the applicant. The second is a transparency dashboard. Virginia Permit Transparency shows every permit application in the state, the steps required, the target timeline, the actual timeline, and which agency is holding it. When a permit sits for 200 days, the public can see it, the governor can see it, and the agency knows they can.

The dashboard is the piece most states skip, and it is the piece that makes the rest stick. A shot clock without data is a promise. A shot clock with a public scoreboard is a management system.

Here is what we have learned from watching states try this: the executive order or the statute is critically important but is just the first step. The rest is implementation. Someone has to write the cost-benefit manual agencies will actually use. Someone has to build the baseline count of requirements so the 25 percent means something. Someone has to decide what a shot clock does when the applicant’s file is incomplete. States that skip this step pass a good law and get a press release.

It is for that very reason that AFP and Fulcrum are excited to collaborate on administrative state reform going forward.  AFP and Fulcrum work closely together to decide which administrative state reforms have the best long-term prospects of success.  AFP works with state leadership to pass these reforms, and Fulcrum then works with states to handle the nitty-gritty aspects of implementing those reforms to ensure that they succeed.

If your state is interested in administrative state reform that preserves important health and safety protections while eliminating red tape and making the process far more efficient, AFP and Fulcrum would love the opportunity to work together.

Graham Owens is a Regulatory Policy Fellow at Americans for Prosperity and can be reached at gowens@afphq.org.

Reeve Bull is the Policy Director at the Fulcrum Foundation and can be reached at rbull@fulcrumregs.org.