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A resolution for local pols: Cut the red tape

With a new year approaching, Southern Nevada officials should make a new year’s resolution to boost economic growth. But instead of giving handouts to special interests, policymakers should try a different approach: Cut red tape and let entrepreneurs flourish. Here are three areas ripe for reform.

One avenue would be to overhaul the transportation industry in Las Vegas. Thanks to a state law passed in 2015, ride-hailing companies such as Uber and Lyft can operate in Nevada. Unfortunately, taxis and limos operate under far stricter constraints. Ordinances limit who can enter the taxi market, while the city imposes a one-hour minimum wait time and minimum fares for limos. According to the R Street Institute, which gave Las Vegas a D and F grade for its friendliness to taxis and limos, entrepreneurs are “encumbered with multiple regulations that undermine their ability to be competitive.”

History shows that easing these restrictions could help spur innovation. Take Minneapolis. After the city deregulated its taxi industry 10 years ago, the number of taxi licenses soared from 343 to 980 — a huge boon for both drivers and riders.

Las Vegas should also free the food trucks. Currently, it’s against the law for any street food vendor to operate within 150 feet of a brick-and-mortar restaurant, unless the vendor has permission from the restaurant’s owner. Moreover, food trucks can’t stay in the same location for more than 30 minutes. Instead of protecting the public, those restrictions do little else but protect businesses from greater competition.

In sharp contrast, Los Angeles doesn’t micromanage where and when food trucks can park. Instead, its regulations are narrowly tailored to address genuine health and safety concerns. Thanks to its permissive regulations, the City of Angels is now legendary for having one of the best food truck scenes in the nation. Given the popularity of food trucks, slashing red tape could let even more entrepreneurs create their own small businesses (and let more consumers enjoy their tasty wares).

Finally, policymakers should reduce and repeal burdensome licensing laws. Once limited to vocations such as medicine and dentistry, occupational licensing has skyrocketed in recent years.

Today, more than one in three Nevada workers needs either a license or certification before he or she can legally work. But in the 1950s, that figure was one in 20.

Nevada actually has the third most burdensome licensing laws in the nation, according to a 2012 report by the Institute for Justice. On average, a license for low- and middle-income jobs requires completing 601 days of training, paying $505 in fees and passing two exams.

Unsurprisingly, red tape can entangle aspiring entrepreneurs. Consider hair braiding. In Nevada, a braider must complete 250 hours of training before she can obtain a specialty braiding license. With such a high barrier to entry, only 13 braiders have been licensed in the state. By comparison, in Mississippi, which deregulated braiding in 2005, more than 1,200 braiders now freely practice.

The result of this red tape is reduced competition and higher prices for consumers. According to the Heritage Foundation, occupational licensing costs the average Nevadan household nearly $1,300 each year.

By eliminating many licensing requirments or reducing their burdens, lawmakers can let workers and consumers prosper.

All too often, what the government does goes unquestioned. When confronted by a policy that cripples growth or just doesn’t make much sense, citizens and policymakers alike should ask, “Why? Why is the government doing this?” A simple change in mind-set, from “we should regulate this” to “why are we regulating this?” can have an enormous impact on economic opportunity.

Nick Sibilla is a writer at the Institute for Justice, a public-interest law firm in Arlington, Va.

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