09-07-2025
Regulatory Reform In The Old Dominion
Capital of the Commonwealth of Virginia
While the Trump administration is getting kudos for slowing the pace of new regulations, it is too soon to judge its efforts to roll back excessive rules from the past. In part, this is because revising rules takes time and cannot be regarded as complete until the dust settles on the ensuing litigation.
As it continues its efforts, the administration might look for inspiration from Washington's neighbor to the south. The Commonwealth of Virginia is undertaking an ambitious regulatory reform agenda aimed at modernizing its regulatory framework, streamlining permitting, and ensuring regulations produce worthwhile public benefits. Yesterday, Governor Glenn Youngkin announced that the state had surpassed his target of cutting regulatory requirements by 25%.
On taking office in 2022, Youngkin established a new Office of Regulatory Management (ORM), initially led by former federal Environmental Protection Agency head Andrew Wheeler and now directed by Reeve Bull. Bull served for more than 10 years as an attorney and research director with the Administrative Conference of the United States and brings deep federal experience to the role. ORM is patterned after the U.S. Office of Information and Regulatory Affairs in the Office of Management and Budget; it is responsible for providing guidance to state agencies for conducting benefit-cost analysis of new regulations and for reviewing regulations before they are published to ensure they offer net public benefits.
The requirement to conduct regulatory impact analysis of new regulations is a longstanding policy of the federal government and other developed countries and it's essential for sound, evidence-based policy. But it is not sufficient, in part because it evaluates new regulations one at a time without considering their cumulative impact, and in part because it is conducted before a regulation is issued, when estimates of benefits and costs are necessarily speculative.
To address this problem of ever-accumulating regulations and lack of retrospective evaluation, ORM is working with agencies across the Commonwealth to identify outdated, duplicative or unnecessarily burdensome rules. This resulted in the 26.8% reduction in requirements the Governor announced yesterday. Virginia defines requirements as commands in regulatory text, such as 'shall,' 'must' or 'may not.' To illustrate, the event highlighted one regulatory change that allows businesses to harvest rainwater for non-potable uses, such as toilets, reducing costs and reducing reliance on scarce environmental resources.
Not satisfied with a 26.8% reduction, Virginia is now harnessing artificial intelligence (AI) tools to identify existing regulatory requirements that go beyond those established by authorizing statutes. While AI has occasionally been found guilty of hallucinating legal authorities, the same may be said for agencies, so this effort could identify further requirements to modify or update.
Permitting reform is another cornerstone of Virginia's effort. The Virginia Permit Transparency website aims to make the permitting process more accessible and understandable to the public. By digitizing and centralizing permit information, the website makes it easier for individuals and businesses (especially small entities) to navigate regulatory requirements. A pilot by Virginia's Department of Environmental Quality reportedly reduced its average permit processing time by more than 65%.
ORM estimates that its efforts to date have resulted in $1.2 billion in annual savings for Virginians, or an average of $380 per household. Virginia's approach may do more to reduce unnecessary existing red tape than President Trump's policy of eliminating 10 rules for every new one issued. As I have noted, his first term's two-for-one policy served more to slow the issuance of new regulations than actually remove many existing ones.
Whether Virginia can maintain this momentum remains to be seen. Its governors can only serve one consecutive term, and Governor Youngkin has only six months left in office. The next governor could revoke his executive orders and reverse some of these policies. Indeed, the executive order that established ORM and requires regulatory analysis expires in June 2026. However, the success of the regulatory management institutions and practices may encourage future governors to continue them. At the federal level, presidents of both parties have reaffirmed the importance of benefit-cost analysis and cross-cutting regulatory oversight. ORM's emphasis on interagency collaboration, public engagement, and data-driven decision-making should have bipartisan appeal, especially if they deliver real value to citizens.
