This past week’s presentation at the Mount Vernon-Springfield Chamber of Commerce, by Director Andrew Wheeler of Virginia’s “Office of Regulatory Management” (previously AD of the EPA), laid out some considerable, yet under-the-radar progress towards economic growth – via regulatory reform – in Virginia, under the Youngkin administration.
Mr. Wheeler’s “Virginia Regulatory Transparency” presentation refers to recent efforts made by the state of Virginia to enhance transparency and streamline the regulatory process. After launching the Townhall.Virginia.gov website back in 1999, Virginia had not made significant transparency efforts until the past year. In the last year, several measures were taken to improve regulatory transparency.
Note that the most important benefit to our Northern Virginia business community from reductions in state regulatory burdens is increased entrepreneurial freedom and economic growth. When state regulatory burdens are significantly reduced, small businesses, their partners and investors are granted more freedom and flexibility to operate and innovate. This freedom allows entrepreneurs to pursue new business ideas, take calculated risks, and bring their products or services to the market with fewer barriers – leading to all kinds of economic growth indicators we’ll summarize later.
Under Governor Youngkin’s new administration, the Office of Regulatory Management (ORM) was established. This office has been responsible for reviewing 200 new regulatory actions and 35 backlogged items since August 1st last year, with a considerably-improved average review time of 11.9 days (significantly reducing the average review time in the Governor’s office from the previous 241 days).
To ensure comprehensive analysis, all regulations, including exempt and non-exempt ones, now require robust cost impact analysis – as do the accompanying guidance documents distributed to impacted agencies. To aid regulatory staff, a Regulatory Economic Analysis Manual was issued, providing guidance on conducting various economic analyses, including cost-benefit analysis, local government impact assessment, small business impact assessment, and family impact assessment. The manual aims to simplify the process and serve as a best-in-class resource for other states. (The cost impact results are only slowly becoming evident – but should be a clear wake-up call to the value of transparency and control of burdensome regulations).
Another major milestone in Virginia’s regulatory transparency efforts was the publication of the first-ever Unified Regulatory Plan. This plan, available on Townhall.Virginia.gov, outlines all planned regulatory actions and new or updated guidance documents issued by July 1, 2023. The plan includes 336 regulatory actions and 346 guidance documents and will be in effect until June 30, 2024.
In April, the Regulatory Requirement Reduction Guidance was issued. Agencies are required to update the 2018 Requirements List by July 31, 2023, establishing a new baseline. The first accounting of regulatory requirement reductions is due on September 30, 2023, covering January 2022 to August 2023, and subsequent reports will be submitted biannually. The document provides examples of regulatory reductions already implemented. These include reducing the training hours for cosmetologists, expanding contractors’ exams to include Spanish, removing notarization requirements for documents, transitioning in-person adjudications to online platforms, expanding licensure reciprocity for spouses of reserve members of the Armed Services, and granting more practice flexibility to physician assistants appointed as medical examiners, among others.
Another important initiative is the State-wide Permitting Efficiency Project (PEEP), launched at the Department of Environmental Quality (DEQ). PEEP introduces the Permitting Enhancement and Evaluation Platform, which defines critical steps and timeframes for DEQ actions. It notifies relevant parties about deadlines and provides workload management tools, ensuring transparency and efficiency in the permitting process (for all manner of construction, improvement or land development projects).
Overall, Virginia’s regulatory transparency efforts have resulted in significant progress towards the goals of process simplification, enhanced public participation, and measurable efficiency in regulatory actions. Reduced state regulations can bring many benefits to small businesses across the Northern Virginia region, including the following:
- Cost Savings Streamlined regulations can lead to cost savings for many small businesses in Arlington County, Fairfax County, Loudoun County, and other areas of Northern Virginia. By reducing regulatory burdens, businesses can save on expenses associated with permits, licenses, and compliance-related fees. These cost savings enable small businesses to allocate resources more effectively towards growth, innovation, and workforce development.
- Increased Flexibility Fewer regulations provide businesses with greater operational flexibility and reduced red tape, allowing them to respond more swiftly to their marketplace demands and adapt to fast-changing consumer needs. This flexibility fosters entrepreneurial spirit and enables small businesses to be agile, adjust strategies, and explore new opportunities in highly competitive markets.
- Reduced Administrative Burden Small businesses in places like Alexandria, Falls Church, Manassas, and Herndon can benefit from reduced administrative burdens; simplifying regulatory processes and reducing paperwork allows business owners and employees to focus more on core operating and growth activities, such as improving products and services, expanding their customer base and diversity, and building strong relationships within their communities (and local Chambers of Commerce!).
- Enhanced Competitiveness Streamlined regulations contribute to a more level playing field for small businesses in Northern Virginia. In areas like Reston, Sterling, and Centreville, reducing barriers to entry allows small businesses to compete more effectively against larger, more established regional or national corporations. This fosters a diverse and vibrant business landscape, promotes healthy competition, and encourages innovation and customer-centric approaches.
- Job Creation Small businesses are often significant contributors to job creation in local communities. When regulatory burdens are reduced, small businesses can allocate resources towards hiring and expanding diverse workforces. This not only generates employment opportunities but also helps stimulate economic activity and improves overall prosperity in the region.
- Encouragement of Entrepreneurship By alleviating regulatory burdens, aspiring entrepreneurs are more likely to take the leap and establish their own ventures – or grow through new mergers or acquisitions, partnerships or applied R&D. This entrepreneurial spirit drives economic growth, creates job opportunities, and contributes to the unique character and identity of Northern Virginia’s business community.
- Improved Regulatory Compliance With fewer regulations, small businesses across Northern Virginia, including areas like Springfield, Ashburn, and Chantilly, can better understand and comply with the remaining, simplified rules. Reduced regulatory complexity allows businesses to stay up to date with requirements, maintain strong compliance rates, and therefore reduce the risk of operating penalties, legal issues, negative PR and online reputation.
- Increased Economic Growth In regions such as Vienna, Gainesville, and Manassas Park, when small businesses thrive, they create job opportunities, generate tax revenues, and stimulate local economies. This, in turn, enhances the quality of life for residents and fosters a vibrant and prosperous business environment.