Barriers To Employment Fall With The Rise Of Out-Of-State Occupational License Recognition

Income tax rate reduction and flattening, along with the expansion of school choice, are among the most consequential policy trends of the early 2020s. However, there is another policy trend emerging that, like income tax relief and greater educational choice, is making states more attractive to workers and employers. That trend is the push by policymakers to remove or mitigate the barriers to employment that state occupational licensing requirements have become.

On Tuesday, March 21, Florida legislators will hold a hearing on Senate Bill 1364, legislation to recognize out-of-state occupational licenses held by new residents so that they can get to work and begin earning income in their new home state right away. If this reform, known as Universal License Recognition (ULR), is passed by legislators in Tallahassee and signed into law by Governor Ron DeSantis (R) this spring, Florida would become state number 22 to enact ULR.

The need to reduce barriers to employment for new residents is more of a concern in Florida than it is in most states. That’s because, as the U.S. Census Bureau noted, 2022 was the first year since 1957 that Florida was home to the nation’s most rapidly-growing population.

Between July 1, 2021 and July 1, 2022, the population of Florida rose 1.9%, a growth rate higher than all other states. With annual net domestic in-migration of 318,855 people, many of those new residents moved to Florida from other states. Passage of SB 1364 will make it so new Floridians who work in licensed fields are able to get to get to work as soon as they relocate, without any delays caused by state government red tape.

“In the Free State of Florida, we welcome all Americans who come here to live, work, and play,” said Senator Jay Collins, sponsor of SB 1364. “In that same spirit, if you’re licensed where you came from, you can keep your license and continue that work here.”

“I had the honor of serving in the U.S. Army for 23 years, many of those were as a Special Forces combat medic,” Senator Collins added, noting how this reform will be particularly helpful for military families. “I delivered babies, performed life-saving medical operations, among my other duties on the battlefield. When I exited service, like many other veterans, that training, those skills and certifications, just did not transfer to the private sector. This legislation will remedy that.”

Florida is not the only fast-growing state where ULR legislation is being debated. Texas Representative Brian Harrison (R), introduced a ULR bill, House Bill 3353, on March 1. The Texas Legislature is only in session every other year. So, unless HB 3353 is enacted this spring, Texas lawmakers won’t have another opportunity to pass ULR until 2025 at the earliest. At the current rate of adoption, failure to enact HB 3353 this year means Texas would likely be one of the last states to approve ULR. In announcing the introduction of HB 3353, Representative Harrison noted that his URL bill is modeled after the one adopted in Arizona four years ago.

In conjunction with his ULR bill, Representative Harrison also introduced HB 3081, which would abolish all occupational licenses that the Texas Sunset Commission has deemed unnecessary. The Sunset Commission last conducted a review of licenses during the 2021 session.

Nearly half of the states now have a ULR law. But four years ago, zero did, underscoring how quickly the ULR movement has grown. Former Governor Doug Ducey (R) made Arizona the first state to enact ULR back in 2019, with positive results observable in the subsequent years.

“Arizona’s thousands of success stories represent more than the successful implementation of a transformative idea: they represent the families, careers, and communities that benefit when government steps out of the way of Americans who are skilled, ready, and willing to work,” says Heather Curry with the Goldwater Institute, the Arizona-based think tank that helped write the original ULR law. “To date, more than 6,500 professionals have been granted a license to work in Arizona under universal recognition, in fields ranging from medicine to cosmetology to engineering. This includes over 400 physicians and over 170 physician assistants. Over 2,2000 tradesmen and women have also received licenses to work based on out-of-state qualifications.”

Curry notes that more than 20 states have since followed Arizona’s lead, with support for ULR coming from lawmakers on both sides of the aisle and different ends of the ideological spectrum. New Hampshire Governor Chris Sununu (R) has been taking shots at Governor DeSantis, but he recently made clear he’s on board with the sort of ULR reform that is now making its way to DeSantis’s desk. Last month, Governor Sununu proposed the repeal of 34 occupational licensing requirements, the disbanding of 14 regulatory boards, and ULR for all licensed professions in the Granite State.

“If you have a substantially similar license and are in good standing in another state, there’s no reason you shouldn’t have a license on day one in New Hampshire,” Sununu said during his Febuary 14 budget address. “We are committed to breaking down regulatory barriers, lowering the cost of entry to do business here, increasing free-market competition.”

Before the legislative sessions end later this spring in New Hampshire and Florida, many hope Governors Sununu and DeSantis get the opportunity to do what Virginia Governor Glenn Youngkin (R) did on February 23, when he signed legislation creating ULR for 85 occupations licensed by the the commonwealth of Virginia.

“This is a major victory for the Commonwealth as we continue growing Virginia’s workforce,” Governor Glenn Youngkin said in his signing statement. “It provides Virginia an advantage in competing with other states for workers and business investment…what I hear from businesses of all sizes, large and small, is they need more, they need more workers. Universal license recognition will assist in resolving worker shortages while at the same time benefiting consumers through reduced costs of goods and services.”

“A universal licensure system ensures a level playing field, allowing an individual to move to any zip code in the Commonwealth and have access to quality jobs and opportunities,” said Delegate Will Morefield (R), who cosponsored Virginia’s ULR bill along with Senator Ryan McDougle (R).

Governors DeSantis and Youngkin aren’t the only presidential prospects working to reduce regulatory barriers to employment. Pennsylvania Governor Josh Shapiro announced a reform in February aimed at speeding up the Keystone State’s licensing process. “If you apply for a license, permit, or certification and you don’t hear back before a date-certain, we’ll give you your money back,” Governor Shapiro tweeted on February 7.

More than month prior to the approval of ULR legislation in Virginia, Ohio became the first state to implement ULR in 2023. This came Governor Mike DeWine (R) signed Ohio’s ULR bill into law on January 4. This came nearly three years after the passage of Senate Bill 7, which provided ULR in Ohio, but only for military families. As in other states, Ohio’s broad ULR bill was approved with bipartisan support.

“Excessive occupational licensing requirements are not new and have raised bipartisan alarm,” wrote Greg Lawson, research fellow at the Buckeye Institute, as ULR legislation was being debated in Columbus. “Professor Morris Kleiner, the AFL-CIO chair in labor policy at the University of Minnesota’s Humphrey School of Public Affairs, testified before Congress in 2016 that he and the former head of President Obama’s Council of Economic Advisors estimated that licensing laws had already cost Ohio nearly 68,000 jobs — jobs that employers across the state really could not afford to lose. Reducing or eliminating licensing barriers to employment will help”

Enactment of SB 1364 would make Florida the latest state to adopt ULR, but it’s not going to be the last. Next door in Georgia, for example, legislators are getting ready to send the newest ULR bill to Governor Brian Kemp’s (R) desk.

House Bill 155, sponsored by Representative Chuck Martin (R), would have most licensing boards in Georgia recognize occupational licenses granted in another state. The bill was approved in the Georgia Senate by 54-0 on March 13. The Georgia House already passed the bill earlier this year, also by a unanimous vote.

The next stop for Georgia’s ULR bill is Governor Kemp’s desk. As such, there is a good chance Governor Kemp’s pen makes 22 states that have ULR on the books and DeSantis’s signature makes it 23. These developments represent a continuation of the progress that has been witnessed in recent years when it comes to making state occupational licensing requirements less costly.

“While burdensome licensing practices are legion in the United States, the last five years have seen positive, albeit small, developments,” writes J. Thomas Perdue, a senior fellow at the Georgia Public Policy Foundation, a Georgia-based think tank. “Since 2017, states created 16 licenses and eliminated 26. Also, one-fifth of licenses became less burdensome in some way.“

The frequency and magnitude at which governors and legislators have been cutting tax rates has generated national headlines in recent weeks and months. This is understandable, since tax relief of some form has been enacted in more than 40 states over the last two years and more than 20 states have approved income tax cuts during that period, which is unprecedented. But by also making occupational licensing requirements less taxing for new residents to comply with, both in terms of time and money, reform-minded governors and state lawmakers have honed in on a new way, like with rate-reducing tax reform, to make their states more attractive places to live, work, do business, and support a family.