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Regulators Will Regulate
(Except When They Don’t)
By Stephen J. Rossie

Square2017 imageRICHMOND, VA – Generally speaking, it’s a good thing when people do what they do best. But Virginia lawmakers may have a different view on that after a Joint Legislative Audit and Review Commission report released to legislators last week determined that one of the commonwealth’s regulatory agencies regulates too much. Except when it doesn’t.

But that’s not all. JLARC staff also uncovered that the appropriately named Department of Professional and Occupational Regulation, which oversees 18 gubernatorial appointed regulatory boards, is good at collecting cash from those it watches over and has stockpiled $27 million that it should not have.

According to the JLARC report, five occupational groups account for 90 percent of the licenses DPOR issues: Personal care (cosmetologists and barbers, for example), tradesmen (electricians, plumbers, etc.), real estate professionals, contractors, and engineers and architects. It also found that 11 of the occupations it regulates do not meet the state’s standards for licensing. In some cases national certifications more than suffice and the state regulations only add another layer of government intervention, while other occupations are exempt because their work does not endanger the public.

During his administration, former Governor Bob McDonnell delivered on a promise to eliminate many boards and commissions that needlessly meddled in the private sector. Then, however, as last week with the report, some professions asked for state oversight to maintain public confidence and to weed out unqualified practitioners.

The bureaucrats aren’t the only ones at fault. According to the report, the General Assembly has increased certain regulations without a proper understanding of their need. It recommended deregulating several professions, including residential energy analysts, interior designers and landscape architects.

While the spotlight may have been on the regulatory aspect of DPOR, the most disturbing part of the report may be that it doesn’t regulate when it should. JLARC staff found that DPOR does not verify key information that is self-reported, such as experience and out of state disciplinary or criminal backgrounds.

JLARC warned that the lack of such verification opens Virginia to organized fraud. It cited an example from 2011 when an education service received a license but rather than tutoring students on subject matter, it instead taught them how to cheat on exams. While the report confirmed that DPOR had vastly improved its background checks, it said it could do more, including making unannounced site audits.

Then there’s the $27 million — a reserve balance accumulated from over collected fees. While DPOR is funded through fees rather than tax dollars, state law requires it to reduce those fees if its reserves surpass 10 percent of its expenses. The excess balance, JLARC found, is 68 percent of expenses.

It all makes for perfect case study in government gone wild. Regulate when unnecessary, don’t regulate when necessary and overcharge everyone along the way.

Stephen J. (Steve) Rossie is a Richmond-based public and government relations’ consultant. He has been a General Assembly lobbyist since 2006 and has written about Virginia government since 2007.


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