Arkansas has one of the most burdensome sets of licensing laws in the United States, according to data from the Institute for Justice. Yet our legislators can't figure out a way to reduce the burden.
Occupational licensing refers to rules and regulations that determine who can enter a given working profession and what requirements individuals must meet before they can begin working in said profession. Most people are aware that doctors and lawyers are licensed, but licenses cover many more areas of work, ranging from landscapers and roofers to acupuncturists and massage therapists. Licensing has also grown dramatically in recent decades. In 1950, roughly 5 percent of occupations were licensed, but these days it's closer to 25 percent.
While licensing can be useful in some areas, there is growing research to suggest that much of the time it is overkill, and can actually be harmful by raising the cost of services and artificially limiting the number of service providers without providing any clear additional benefits to public health and safety.
Alternatives to licensing such as registration, certification, and private associations often serve the same purpose more efficiently and at a lower cost, both to practitioners and consumers. Act 600 of 2019 was enacted to ensure that the state government is only requiring licensing where it is necessary to protect public health and safety. The Occupational Licensing Review Subcommittee of the Arkansas State Legislature was created to achieve that goal.
In mid-November, the subcommittee met to approve its final report containing the second-ever round of recommendations for changes to Arkansas' occupational licensing rules and regulations. Surprisingly, and contrary to the mandate set out in Act 600, the report does not contain any recommendations for changes to licensing rules.
The subcommittee, co-chaired by Rep. Frances Cavenaugh (R-Walnut Ridge) and Sen. Breanne Davis (R-Russellville), has spent the past year and a half interviewing state employees from 15 different licensing entities, covering 62 licenses in total, and yet they found no rules that needed to be adjusted, eliminated, or otherwise changed.
The first round of licensing reviews was conducted from late 2019 through the end of 2020, and the report from that group of licenses contained five official recommendations. In its 2022 report, the committee did not even produce one recommendation. The report is barely more than one page long, and the recommendation section is a single sentence, which says there are no recommendations.
To paraphrase a point that Sen. Missy Irvin (R-Mountain View) made in one of last year's subcommittee meetings, many of these licensing regulations have not been updated or even reviewed since they were first put on the books years or decades ago.
It is incredible that out of 62 licenses the subcommittee found nothing worth adjusting or modernizing. It is especially surprising that members of the subcommittee found no changes worth recommending since on several occasions members raised significant issues during meetings.
For example, when discussing licenses overseen by the Veterinary Medical Examining Board, Representative Cavenaugh noted that the Livestock Embryo Transfer Technician license application fee is a staggering $1,000. During a committee meeting in May of this year, Rep. Richard McGrew (R-Hot Springs) pointed out that to earn a property manager's license in Arkansas, individuals must earn a full real estate license, even though 90 percent of the real estate coursework covers sales rather than property management. Representative McGrew suggested to Real Estate Commission representatives that a separate process for those only interested in property management would be a good idea. Meeting with the Arkansas Contractors Licensing Board in January, Rep. John Payton (R-Wilburn) suggested that there needs to be a clearer path for individuals to gain the experience needed to qualify for a contractor license.
These are just a few of the ideas for changes floated by members during subcommittee meetings. Each would have made a solid basis for an official recommendation, yet none appear in the subcommittee's report.
Many other potential recommendations were overlooked by the subcommittee entirely. For example, Arkansas has higher licensing fees for water-well drillers than any other Southern state at $750. In Texas, the fees are $267, while in Missouri they are $110. A recommendation to lower our state's fees to match those of Texas or Missouri would have been a sensible inclusion in the final report.
Fortunately, the current version of the report is a draft. The final version will be submitted to the Arkansas Legislative Council sometime toward the end of December. The Occupational Licensing Review Subcommittee has one more meeting scheduled before then, on Dec. 15.
Committee members should use this time to take another look at their report, review past meetings for information, and formulate some productive recommendations to put in the final version of the report.
Act 600 of 2019 mandates the subcommittee to seek out the least restrictive forms of regulation that protects public health and safety, but the current version of the report simply does not do so. Arkansas' citizens deserve better than a rubber-stamped effort that cuts no red tape and preserves the status quo.
Zachary Burt is a policy analyst with the Arkansas Center for Research in Economics. His research at ACRE involves occupational licensing and property rights.