AZ Gov Cracks Down on Occupational Licensing

Ducey requires licensing boards to justify employment regulations

Arizona Gov. Doug Ducey / Getty Images
March 31, 2017

Arizona Gov. Doug Ducey is re-examining licensing regulations after a state board cracked down on a cosmetology student for giving free haircuts to homeless people.

Ducey signed an executive order on Wednesday requiring the state's 27 occupational licensing boards to justify their regulatory standards. Licensing boards, made up of veteran professionals in an occupational field, set standards on education, training, and quality for individuals looking to work in the field.

The governor's office said reforms are needed because the state's "burdensome training requirements, excessive fees, arbitrary investigations and economic protections" prevent residents from beginning or developing their careers.

Ducey said many occupational licensing standards are outdated or designed by insiders to keep competitors from entering the field.

"Our main goal is to make sure that Arizona continues to embody the spirit of unlimited opportunity this country was founded on," Ducey told the Washington Free Beacon. "There's no excuse for the 21st century economy still being hindered by 20th century policies."

As a result of the order, state boards must submit details about how they set requirements and fees and compare those standards to licensing regimes in other states. If Arizona's standards are more onerous than those of other states, the board has to justify why it maintains that standard "with specific reference to potential harm to individuals in the State of Arizona."

The executive order also contains elements of criminal justice reform; it will force boards to disclose how they handle applications by people with criminal convictions. Ducey plans to use information in the reports to lift barriers to entry for entrepreneurs in the state.

"If we have the chance to wipe out an outdated board or unnecessary regulation that's standing in the way of someone achieving their dream, we're going to take it," Ducey said.

Ducey, a Republican who campaigned as an advocate for free market policies, took interest in the state's licensing regime in February when the State Board of Cosmetology launched an investigation into Juan Carlos Montes de Oca, a cosmetology student who once was homeless, for providing free haircuts to people living on the streets. The board backed down after Ducey penned a blistering letter rebuking the investigation.

"The fact that one of our own citizens is volunteering his time and talents in an effort to help those who need it, is exactly the kind of citizenship we should be encouraging and celebrating," the letter said. "Any actions by your board on this issue, outside of applauding Mr. Montesdeoca's [sic] efforts, are unnecessary and uncalled for."

Keith Diggs, an Arizona-based attorney with the public interest law firm Institute for Justice, said occupational licensing often is intertwined with protectionism and in many cases hard to justify outside of medical boards. He pointed to efforts by Arizona's veterinary board to shut down pet massage therapists as an example of regulatory overreach "where there's no real health or safety concern."

The board argued that the masseuses needed to undergo the same licensing that veterinarians go through to continue operating. The masseuses, with legal assistance from the Institute for Justice, won the right to practice after a judge determined that their work fell outside of the board's purview in February.

"For a long time these boards had free rein to operate by themselves. When you get a situation like that it is hard to undo politically because industry insiders have more interest in keeping people out than the general public has for overturning [licensing]," Diggs said.

He added that Ducey has cracked down on individuals who use occupational licensing to harm their competitors.

"We applaud Gov. Ducey for putting Arizona in the lead on this. We think it's extremely important that people have a path for upward mobility," Diggs said. "The boards have been put on notice that they'll be accountable to someone elected by the people of Arizona."

William Boyes, founding director of Arizona State University's Center for the Study of Economic Liberty, said the executive order represented a good first step to examining the effects of licensing in the state. He hopes that disclosures will be used to discard unnecessary standards and requirements.

"This is a win for all Arizonans—workers who want to climb the economic ladder and consumers who want lower prices," Boyes said in an email. "As the boards work through this process, we welcome an even higher bar than the 'national average' and encourage the wholesale elimination of many of these requirements."

State boards have until June 30 to submit their reports to the governor's office. The order is scheduled to expire in September 2018.

Published under: Arizona , Regulation