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OPINION: If bill to combine licensing boards upsets associations, it is good legislation

Edward Timmons
Edward Timmons
Opinion
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The Legislature in Carson City.

A recently published opinion piece warns readers about the dangers of reining in self-serving licensing boards in Nevada. The truth is that this reform is badly needed in the state.

Indeed, in the Supreme Court case NC Dental vs FTC from 10 years ago, it was determined that licensing boards require more independent oversight. If states fail to provide this oversight, they may be exposing themselves to antitrust legislation. SB78 takes a good first step toward providing this oversight.

Why do licensing boards need this oversight? Although licensing boards purportedly serve the public interest, they also have incentive to serve their own private interests as well.

The 150-hour rule for certified public accountants (CPA) is a case in point. Without providing any quality evidence that accountants needed to complete 150 hours of education and training before taking the CPA exam, accountant licensing boards across the country adopted a silly rule that aspiring accountants needed 30 hours of education beyond a typical bachelor's degree. Nevada was no different.

Research shows that this dramatically reduced the number of CPA candidates. You don't have to be an expert in economics to understand what this means in the market for CPAs. Just like anything else, if supply goes down, price goes up. CPAs enjoyed the benefits of this artificial cap on the number of CPAs in the form of higher salaries. And the public received no benefit whatsoever from this rule.

The self-serving 150-hour rule is a case in point as to why accounting boards, and all licensing boards for that matter, need good independent oversight. It prevents licensing boards from establishing rules that are self-serving rather than in the public's best interest.

And Nevada is a state that needs this additional oversight. In a recent national review of occupational licensing standards across the country that I co-authored, I found that Nevada licenses 179 occupations of the 284 that we study. Kansas licenses just 136 and there is no evidence whatsoever that Kansas residents are harmed by this substantial difference in licensed professions.

Too often, policymakers try to do the right thing by licensing a new profession. Professional associations, not the public, are the primary voice advocating for new legislation. Typically there are much less costly alternatives to keeping the public safe from unscrupulous providers.

Restaurants are a case in point. Chef and wait staff are not subject to occupational licensing, yet consumers seem to be just fine. First, markets themselves are a great regulator. If you provide poor quality service, you won't be in business for very long. Further, states use random inspections to make sure that establishments are clean. Licensing isn't necessary in restaurants, and it certainly is not necessary for 179-plus occupations in Nevada.

Nevada's current array of licensing restrictions is badly in need of review. Nevada, along with Louisiana and the District of Columbia, license interior designers. Aspiring barbers in Nevada are required to complete 1,500 hours of education, but barbers in California complete only 1,000 hours of education. Are haircuts 50 percent better in Nevada than California? I don't think so.

If Nevada moves forward with SB78, the sky will not fall. Instead, licensing regulations will take a step toward better serving the public's interest, rather than the interests of professional associations. Such a reform will improve the lives of Nevada's citizens.

Edward  Timmons is a senior fellow with the Archbridge Institute and the founding director of the Knee Regulatory Research Center at West Virginia University.

The Nevada Independent welcomes informed, cogent rebuttals to opinion pieces such as this. Send them to submissions@thenvindy.com.

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