The News: The Wisconsin Institute for Law & Liberty (WILL) released a new report called “Regulatory Reform in Wisconsin: An Opportunity for Greater Economic Growth.” The report makes the case for much-needed regulatory reform in the state while also highlighting several solutions that were introduced in the Wisconsin legislature today. WILL partnered with regulatory policy expert Dr. Patrick A. McLaughlin – a Senior Fellow at the Hoover Institution at Stanford University and a Visiting Research Fellow at the Pacific Legal Foundation – to produce the report.
The Quotes: WILL Policy Director, Kyle Koenen, stated, “Wisconsin has fallen from being a robust engine of economic growth to one of stagnation — overregulation is to blame. We partnered with Patrick McLaughlin to examine a new path forward for Wisconsin’s regulatory environment. It’s our hope that we can arm policymakers with the tools to unleash economic growth once again.”
Dr. Patrick A. McLaughlin, author of the report, stated, “Wisconsin is the 13th most regulated state in the nation, and it risks falling behind neighboring states if reforms are not implemented. In this report we highlight the true economic costs of red tape and how systematic regulatory reform not only increases GDP growth but also fosters innovation, creates jobs, and enhances competitiveness.”
Why Wisconsin needs a “Red Tape Reset”: Wisconsin is at a crossroads. Burdened by an outdated and bloated regulatory code, our state now ranks as the 13th most regulated in the nation—with over 165,000 restrictions on the books. That’s five times more than Idaho, the least regulated state.
This regulatory accumulation has real consequences: it drives up costs, stifles innovation, and limits job growth. Studies show excessive regulation can cut economic growth by up to 2 percentage points annually—slowing wages and raising prices. Small businesses, entrepreneurs, and low-income families bear the brunt. Red tape raises the cost of living and makes it harder to climb the economic ladder.
Other states like Indiana, Iowa, and Idaho are slashing unnecessary rules—and reaping the rewards in jobs, investment, and talent. Wisconsin must do the same. It’s time for a Red Tape Reset: a bold effort to eliminate outdated rules, modernize our regulatory code, and unleash our full economic potential.
Economic Benefits of Regulatory Reform: If Wisconsin continues growing at its historical rate of 1.5% annually, state GDP will reach $414 billion by 2037 (in real 2017 dollars). However, our study finds that regulatory reform could significantly accelerate that growth.
Using a central estimate—where a 1 percentage point (pp) boost in growth results from a 36% cut in red tape—a modest 20% reduction in regulatory restrictions would increase Wisconsin’s economy by $23 billion by 2037. A more ambitious 40% reduction would result in an economy nearly $48 billion larger.
More optimistic scenarios suggest even greater gains. Under a high-growth model, a 40% red tape reduction could generate up to $68 billion in additional economic output by 2037.
Proposed Solutions We Support: Today, members of the Wisconsin Legislature introduced a series of bills that will streamline outdated regulations, reduce red tape, and modernize Wisconsin’s regulatory framework. WILL is supportive of these bills.
Regulatory Sunsetting (LRB-0565) by Representative Neylon and Senator Nass
This bill creates a sunset review process to ensure all chapters of the administrative code are regularly reviewed, updated, or allowed to expire. Currently, rules stay in effect indefinitely unless repealed or amended—leading to outdated and unnecessary regulations. A recent poll by the Institute for Reforming Government found that 67% of Wisconsinites support this policy.
Regulatory Budgeting (LRB-0566) by Representative Gustafson and Senator Bradley
This bill establishes a net-zero regulatory budgeting framework—new regulations must either have no economic impact or be offset by the repeal or revision of existing rules. The approach builds on the state’s existing REINS Act and is inspired by efforts in other states like Idaho, Oklahoma and Ohio.
One Rule Per Scope Statement (LRB-0567) by Representative Knodl and Senator Hutton
This bill ensures greater transparency in the rulemaking process by requiring agencies to issue a separate scope statement for each rule—whether permanent or emergency. The bill also sets a six-month expiration for emergency rule scope statements to prevent misuse and ensure emergency rules remain temporary. The goal: enhance public notice, promote accountability, and prevent regulatory overreach.
Challenging the Validity of Administrative Rules (LRB-0568) by Representative Tusler and Senator Wimberger
This bill allows individuals or businesses that successfully challenge an unlawful administrative rule to recover their attorney fees and litigation costs. Under current law, even when a court finds that an agency violated the law, plaintiffs must cover their own legal expenses. This reform ensures a fairer process by encouraging valid challenges to illegal regulations without imposing a financial burden on those seeking accountability.
About the Author: Dr. Patrick A. McLaughlin is a Research Fellow at the Hoover Institution at Stanford University. He is the creator of the RegData and QuantGov projects. His research primarily focuses on regulations and the regulatory process. Dr. McLaughlin has published over thirty peer-reviewed journal articles, and he has testified before both houses of Congress as well as state legislatures. He holds a Ph.D. in economics from Clemson University. He is also a Visiting Fellow at the Pacific Legal Foundation.
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