How A Kansas Ballot Measure Could Motivate A GOP-Led Congress To Rein In The Administrative State

Federal tax collections have averaged 17% of gross domestic product for the past 50 years, whereas spending during that period has averaged approximately 21% of GDP. Yet when tabulating the cost of government that is borne by individuals, families, and employers, to only look at taxes and spending would provide an incomplete accounting.

As with taxes, regulations impose significant costs on households and businesses. According to a new report released by the Competitive Enterprise Institute on October 26, the federal regulatory burden now almost matches the combined cost of personal and corporate income taxes. That report, titled “Ten Thousand Commandments,” is CEI’s “annual survey of the size, scope, and cost of federal regulations, and how they affect American consumers, businesses, and the U.S. economy at large.”

The report’s most recent edition found the federal regulatory burden in 2021 amounting to $1.927 trillion, which equates to 33% of total federal outlays and 8% of GDP. This puts the cost of the federal regulatory burden on the same level as total personal and corporate tax collections, which amounted to a combined $1.973 trillion in 2021. The average regulatory burden facing each U.S. household, notes the report, amounts to $14,684 annually if “one assumed that all costs of federal regulation flowed all the way down to households.”

“The regulatory ‘tax’ exceeds every item in the household budget except housing,” the CEI report notes. “That means that a typical American household ‘spends’ more on embedded regulation than on health care, food, transportation, entertainment, apparel, services, or savings.”

As burdensome as federal regulations have become, state regulations also subject households and employers to another layer of administrative and compliance costs. A constitutional amendment that will appear on the 2022 midterm election ballot in Kansas, if approved by voters, would institute a reform designed to rein in regulatory costs. Viewed by some as a model for keeping regulatory burdens in check, similar reforms have been proposed in other state legislatures and in Congress.

Constitutional Amendment 1, which was referred to the November ballot by members of the Kansas Legislature, would add a section to the Kansas Constitution giving the legislature the authority to repeal or suspend any rule or regulation that has been adopted by an executive branch agency or department. If Constitutional Amendment 1 is approved by voters, it won’t be the first time that the Kansas Legislature had the authority to overrule regulations imposed by the executive branch. Kansas lawmakers enacted a legislative veto mechanism in 1939, which was on the books until it was struck down by the Kansas Supreme Court in 1984.

Kansas Attorney General Derek Schmidt (R), who is challenging Governor Laura Kelly (D) on November 8, has come out in support of Constitutional Amendment 1. Even though passage of the amendment would place a new legislative check on his prospective administration and that of other future governors, Schmidt believes this reform is in the best interests of the state.

“When it comes to lawmaking, the buck is supposed to stop with the people’s elected representatives in the Legislature,” Schmidt said. “But the reality of the modern regulatory state is that the Legislature often passes the buck by granting broad power to regulatory agencies and then has no meaningful recourse. As a result, government regulations with the binding effect of law too often are conceived, written and enforced by regulatory agencies – an unelected bureaucracy acting as the proverbial judge, jury and executioner.”

Governor Kelly, meanwhile, has come out in opposition to Constitutional Amendment 1. Voter approval of this amendment “would be really limiting to Laura Kelly if she would win a second term because the legislature is going to be heavily Republican,” said Matt Harris, a Park University political science professor.

Schmidt supports Constitutional Amendment 1 even though it would give legislators the ability to undo actions taken by his prospective administration. While many view that as a principled stand against self interest, some the state’s largest newspapers don’t want Schmidt or any other potential governor to have to contend with such a legislative check.

“This proposal would provide the Legislature with the tools to second-guess decisions made by any governor, enabling it to overturn orders and regulations with a simple majority vote,” stated the Kansas City Star’s editorial that recommended a no vote on Constitutional Amendment 1. The Wichita Eagle’s editorial board, meanwhile, described the amendment as an attempt “to steal the authority of the governor’s office and regulatory agencies.”

If the amendment is approved by voters on November 8, it won’t be first time Kansas ever had a legislative veto and it also won’t make Kansas the first state where legislators have taken action to rein in regulatory costs. Voter approval of Constitutional Amendment 1 would have Kansas join Wisconsin in providing the ability for legislators to overturn regulations imposed by the executive branch.

In 2017, Wisconsin lawmakers and then-Governor Scott Walker (R) enacted what is known as the REINS Act, the first of its kind among the 50 states. The Wisconsin REINS Act, which was introduced by Senator Majority Leader Devin LeMahieu (R-Oostburg) and Representative Adam Neylon (R-Pewaukee), requires that any state regulation whose cost exceeds $10 million must be subject to a vote of approval from the legislature. Wisconsin’s REINS Act also gives the legislature’s Joint Committee for Review of Administrative Rules the chance to request a public hearing early in the rule-making process in order to provide citizens and stakeholders a forum in which to share input and have their voices heard.

The Wisconsin REINS Act is modeled after the national REINS Act that has been proposed in Congress and passed out of the House multiple times. The federal version of the REINS Act subjects all federal regulations whose economic impact exceeds $100 million to a vote of approval from Congress. The federal REINS Act was most recently passed by the U.S. House in January 2017. The Senate companion sponsored by Senator Rand Paul (R-Ky.) was considered in committee but has yet to receive a vote.

The federal REINS Act has never received a Senate vote. But if Republicans take control of both the House and Senate on November 8, that could change in 2023. If Kansas voters, who are portrayed as a bellwether by national media and many politicians, approve Constitutional Amendment 1, it may motivate the new Congress to institute their own mechanism for reining in costly regulations in the new year. Likewise, we could also expect to see similar proposals be introduced in other state legislatures.