Op-Ed: States step in when ‘local control’ threatens liberty

In a move that’ll greatly benefit small businesses and their workers, Montana’s House of Representatives recently passed a bill to prevent local governments in the Treasure State from passing anti-vaping regulations.

House Bill 137 pre-empts moves to ban the sale of flavored vaping products that have gained traction in various localities nationwide in the name of protecting public health. However, evidence from cities like San Francisco already shows what health experts have long predicted: Such bans are more likely to push smokers and vapers onto significantly more harmful and carcinogenic products, namely cigarettes. Flavors are crucial for making vaping a more appealing option for satiating nicotine cravings and hence an effective smoking cessation aid. Not only do these bans risk public health, they also threaten vape retailers, manufacturers, and other American businesses already struggling through the Covid-19 pandemic.

HB 137, then, is the latest of many U.S. state laws promoting liberty and economic opportunity by preventing local politicians and bureaucrats from restricting businesses through occupational licensing, tax hikes, red tape, and other costly and burdensome local ordinances for entrepreneurs and workers. Such “preemption laws” should be welcomed by lovers of liberty, and should prompt us to rethink our notions of “local control,” especially when such control quashes freedom at the most local level of all – that of the individual.

The conventional argument for “local control” is that decisions should be made as close to the communities and people affected as possible. In theory, local governments are better informed about and moved by community stakeholder concerns than state or federal policymakers legislating from afar. Citizens who don’t like how their community is run can move elsewhere.

But this doesn’t capture the whole picture. For many lacking the resources, or who are already heavily invested in their career, their business or their community, moving elsewhere isn’t an option. And if individuals have little power to influence state legislature decisions, then the same applies to local jurisdictions, which are just as much if not more susceptible to lobbying by well-resourced special interests.

For instance, professional associations and labor unions are disproportionately more influential at the local level than ordinary citizens due to lower voter turnout in local elections (relative to elections at the state or federal level). This combined with unions’ ability to organize members and muster significantly more funding for lobbying and campaigns than other local stakeholders makes the notion of “local control” all but laughable.

In the case of occupational licensing, this results in the creation and entrenchment of local licensing boards that impose draconian requirements for practicing a profession or trade in the locality, often on top of existing state laws. For instance, though Maryland is one of 21 states that don’t require a license for auctioneer work, auctioneers in the city of Baltimore must reside there for two years before they’re eligible for local licensure, and the local licensing fees and accompanying education and training requirements cost well over 5 times the average in states that do license auctioneers. And in cities like Newark, New Jersey, local licenses veer on the absurd. Everything from holding a garage sale to shining shoes, to handing out promotional flyers requires one.

These local regulations increase costs for businesses and consumers while artificially increasing the wages of professional association members by denying outside workers the opportunity to compete.

Things get worse when state and local licenses overlap. A study cited by the Obama administration found that while state licensing increased labor costs across licensed professions by 17%, the combined effect of overlapping state and local licenses was 25% — cutting into the living standards of ordinary Americans reliant on essential services like plumbing in states like Tennessee.

Workers suffer too. In Minneapolis, a 2009 law added licensing requirements for tree trimmers on top of those already imposed by Minnesota’s own state rules. As a result, self-employed contractors like Jim Dolphy lost most of their clients overnight as they couldn’t afford additional qualifications for a trade they’d previously practiced without issue. Adding injury to insult, city authorities fined Dolphy $250 for responding to an urgent customer call after a tornado felled their trees.

State preemption laws preventing localities or licensing boards from imposing ill-advised rules like this are the most efficient way to protect liberty and opportunity for these Americans. In 2015, the Supreme Court ruled that without sufficient oversight, even state licensing boards can become unaccountable, self-serving bureaucracies that protect themselves from competition instead of safeguarding consumers. Mississippi passed a 2017 law that limited the power of its many professional licensing boards by requiring a state commission’s approval for new restrictions. There’s no reason why other states can’t learn from Mississippi and Montana by passing similar laws limiting or overriding local bureaucrats and officials before they attempt the same.

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