Lombardo says he cut 900 regulations. Did it actually make a difference for Nevada?

Anyone following the Nevada governor's race might have heard Gov. Joe Lombardo (R) brag that he has cut or streamlined 900 regulations.

An ad with 16 million views said it was a reason for Nevada's positive job growth. The Nevada Republican Party said axing these regulations helped create jobs and grow businesses. And Lombardo himself keeps mentioning it as part of his administration's "pro-growth agenda."

But what regulations were actually cut? And did they actually help businesses?

A Nevada Independent analysis of the regulation changes during Lombardo's tenure in office found that some of them had a direct nexus to employment, such as easing certain job licensing rules, but most of the broader regulatory changes had no economic effect on businesses or the public, according to state agencies' own projections. 

In addition, hundreds of the changes did not appear to have a direct connection to businesses, as they addressed areas such as revising definitions or agencies' internal processes. The governor's office says that any regulatory cleanup will benefit the public.

The changes stem from executive orders Lombardo signed when he entered office, one of which he renewed last month. The orders required state agencies to recommend at least 10 regulations for removal and mandated that occupational licensing boards find ways to make it easier for Nevadans to find work.

Lombardo has highlighted job numbers as he runs for re-election against Democratic Attorney General Aaron Ford, touting Nevada's lowest unemployment rate since the pandemic — though it still is among the highest in the country — and leading the nation in job growth for 11 straight months as of June.

But when it comes to regulations, there often isn't a strong connection between cutting them and job growth, three regulation researchers said in interviews with The Indy. Although a more business-friendly regulatory environment can attract companies into the state, simply cutting regulations does not necessarily translate into jobs.

"The employment effects — at least in the data — are relatively minor," said Chris Carrigan, a researcher at George Washington University who helped edit a volume called "Does regulation kill jobs?" He added that much of the research has been at the federal level.

Economists also recently told The Indy there are lots of other factors that could spur growth, including a national recovery from the pandemic and data center buildout.

There has also been an increase in politicians campaigning around regulating cutting, as seen through President Donald Trump's efforts to deregulate business and industry at the federal level, said Stuart Shapiro, a professor at Rutgers University.

But nuance is often lost during that discourse, Shapiro said. For example, Lombardo has at times said he has "cut" 900 regulations, but that is not accurate because hundreds of the changes were adjusting existing regulations.

"It is a very easy issue to demagogue," Shapiro said. "That doesn't mean we can't improve things by getting rid of some regulations and maybe issuing some better ones in their place."

What were the regulation changes?

The regulations cover a whole gamut of issues, ranging from mercury emissions and charter schools to building codes and water systems.

There were also regulations related to the state's occupational licensing boards that have a more direct connection to jobs. 

For example, the board overseeing professional engineers and land surveyors cut certain fees for military families, while the body governing certain mental health professions removed regulations that imposed strict rules on when a person can take certain exams. In a document accompanying the latter proposal, the group said " it is our hope that we will see an increase in providers." 

Susan Dudley, the director and founder of George Washington University's Regulatory Studies Center, said the center's research suggests that occupational licensing is typically more harmful to employment growth than other types of regulations. 

However, many regulation changes were less clear cut. The Indy found that about 30 percent of the regulations repealed as a result of the governor's executive order had to do with definitions.

What about businesses and the public?

Under state law, agencies seeking regulation changes must submit documents explaining whether their proposal would have an economic impact on small businesses, the public and the overall business community.

The governor's office provided The Indy with about 120 proposals that it said arose from the executive order. These proposals collectively contained hundreds of regulation cuts and changes.

But at least 60 percent of these proposals would have had no economic effect on the public or businesses, according to state agencies' own documents. This was because the regulations did not have a nexus to the business community, and that the changes were mostly to address internal processes.

Researchers said this aligned with their findings that simply removing or changing a regulation does not necessarily translate into economic or job benefits.

"It could be meaningful. It could not be meaningful," Shapiro said.

The governor's office has said that streamlining and clarifying regulations will make life easier for people navigating the regulatory system — something that researchers agreed with.

"One of the challenges to compliance is just kind of understanding what exactly you're supposed to do," Carrigan said. "Streamlining or making the language plain certainly helps with compliance."

But on the topic of jobs, Dudley also noted that a simpler regulatory system could put some people out of work.

"If a small business doesn't have to hire a full-time lawyer or pay a consultant, it may actually reduce [jobs]," Dudley said. "But it's still good for the economy because it means they get to produce more."

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How we reported this story

The Nevada Independent first requested from the governor's office a list of all regulations cut or streamlined as a result of the executive order. It said it did not have a list, and internal tracking measures are protected under the attorney-client privilege because it included collaborations between staff and lawyers on carrying out the executive order.

The office, however, did provide a list of all broader regulatory proposals pursued because of the executive order. These proposals often include many regulatory changes and must receive approval from a panel of state lawmakers. 

The Indy analyzed these roughly 120 proposals. We looked at how agencies described the potential economic effects on the public, small businesses and overall business community. We also looked at what was repealed and changed as part of these proposals.

We also noticed that the justification for some of these proposals did not mention the executive order. Instead, agencies said the proposal was because of other changes at the state or federal level. This indicates the governor's office calculations that 900 regulations were cut or streamlined might be an exaggeration. We reached out to the governor's office for clarification on the exact number, but did not receive a response.

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