What a Beautiful Sunset

Why sunset legislation is needed

I admit it: I really tend to get on the legislature’s case a lot, and most of the time lawmakers deserve it.

Sometimes, though, they really do hit the target, if not in a specific bill, then in recognizing the general policy threats that loom, especially from the bureaucratic state. And so it is with state Sen. Steve Nass (R-Whitewater) and Rep. Adam Neylon (R-Pewaukee) and their push for regulatory reform through sunsetting legislation.

The Republican lawmakers know the stakes are high. In an era in which there is an all-out push by the left—including progressive judges and justices—to preserve and grow bureaucratic authority and autonomy, it is essential that the recent amputation of the legislature from the rest of the state’s body politic be reversed.

Right now, in Wisconsin, we effectively have three branches of government. Unfortunately for us, it’s the wrong three branches—the executive (governor), the judiciary, and the administrative state. I’m tempted to say we’re on the edge of a constitutional crisis, but, well, you know. Still, the Supreme Court’s termination of the legislature’s oversight of the delegation of its legislative authority—itself of dubious constitutional validity—leaves us in a deep hole indeed.

Enter Nass, Neylon, and other Republicans who argue that sunsetting regulations will set Wisconsinites free. It’s also true that it would set the legislature free.

Specifically, under the Neylon/Nass proposed legislation—modeled aggressively on reforms that Texas, Colorado, Utah, and especially Idaho have already implemented—every chapter of Wisconsin’s administrative code would automatically expire every seven years unless deliberately re-adopted through a transparent process.

Under the bill, according to the Legislative Reference Bureau, in the year before a code chapter is set to expire, an agency may send to the joint legislative committee on rule review and to appropriate standing committees a notice of its intention to readopt the chapter. At that point a review and certification by the Legislative Council that the re-adoption notice meets certain requirements would be undertaken, and, if it does, it is automatically readopted. If it doesn’t (such as the rule being re-adopted is different in substance), the deficiencies cited by the Legislative Council may at corrected, or the rule must be re-promulgated using the normal rulemaking process.

And just like that the state’s regulatory presumption would be flipped. Agencies would be forced to justify their rules rather than assume the public must justify their freedom from them. Instead of citizens having to prove why an outdated regulation should die, the bureaucracy would have to prove why it deserves to live.

There are other proposals for regulatory reform in addition to this bill—prohibiting multiple regulations to be promulgated via a single scope statement; new rules on compliance costs; enabling attorneys fees for successful challenges to rules; and requiring the repeal of existing rules to offset the impact of new rules—and this bill itself could use some handiwork (for some reason it does not sunset agencies in addition to regulations, as other states do, and a substitute amendment watered down the process for rule re-adoption), but, whatever the specific bill, the GOP’s so-called Red Tape Reset package has the right general thrust, and the legislative intent behind sunsetting is particularly important.

Indeed, in testimony for their legislation, both Nass and Neylon were enthusiastic about the economic benefits sunsetting could bring—and has brought to other states—which seems to be the underlying impetus for the bill.

“Wisconsin is the 13th most regulated state with over 165,000 regulations,” Nass testified at an October 9 hearing on the legislation. “These regulations stifle economic growth, drive up costs, and discourage innovation in the state. Reducing regulations by 10 percent could add $6.6 billion to Wisconsin’s GDP by 2037, and reducing regulations by 40 percent could result in more than $68 billion in growth. The numbers are clear, deregulation leads to economic growth.”

Idaho, Nass reminded lawmakers, discovered an internal “kill-switch” that sunset all rules unless agencies re-promulgated them. The result? Idaho cut 20 percent of all state regulations, and the world didn’t end.

Also in his testimony, Nass rattled off multiple chapters of code surrounding agencies that he said were duplicative or significantly overlapped, including a cemetery board (DSPS-CB) and a funeral directors examining board (DSPS-FD); a Department of Transportation (DOT), Office of the Commissioner of the Railroads (OCR), and a Rustic Roads Board (RRB); as well as a Department of Administration-Division of Personnel Management (ER) and a Merit Recruitment office (ER-MRS).

One could get a seizure, or at least a faint whiff of gulag grog, just listening to the Stalinist acronyms and abbreviations. After a while, one gets the feeling these agencies just reproduce on their own, one inside the other, generation after generation, a matryoshka doll of agencies, one dead-eyed, smiling bureaucrat after another.

Not least, Nass pointed out, there were areas of the code that were simply outdated, such as a lonely, single code chapter for the Public Records Board: Microfilm Standards.

“A simple glance at Wisconsin’s administrative code reveals that we are in desperate need of a regulation reset and that we need to dramatically reduce the amount of red tape in Wisconsin,” he testified. “This sunset legislation, along with the rest of the regulatory reform package will bring about the red-tape reset that Wisconsin desperately needs.”

For his part, Neylon echoed Nass in saying that over-regulation has real-world consequences: “Excessive, outdated, or duplicative rules can stifle economic growth, raise costs for consumers and businesses, and discourage innovation, particularly for small employers who lack the resources to navigate a dense regulatory environment.”

Neylon pointed out that the kind of ongoing, systematic oversight being proposed is standard practice in the private sector, where he said outdated policies are regularly reevaluated and eliminated.

“Government should be no different,” he testified. “We cannot afford to let regulations linger on the books for decades without scrutiny, particularly when they impose real costs on employers, consumers, and taxpayers alike.”

You say potato, I say regulation

Throughout the debate over sunsetting, much of the discussion has centered on Idaho’s experience, which has been highly successful.

My wife’s grandmother, who was from Idaho, used to say that it wasn’t a real meal, or a good day, without potatoes. For many years, that state said the same thing about regulations.

Then they went on a diet. Put simply, Idaho did what Wisconsin GOP lawmakers say they want to do, they flipped the script. Along the way, the state eliminated 3,300 pages of regulations—38 percent of its total—in just the past six years.

“We’ve changed the default,” Dr. Alex Adams, Idaho’s director of the Department of Health and Welfare, said late last year in a podcast for the CPAC Foundation’s Center for Regulatory Freedom. “Instead of assuming regulations are permanent, they now disappear unless actively justified.”

The sky didn’t fall in Idaho when regulations were cut by more than a third, Adams said: “In fact, businesses thrived, public safety improved, and stakeholder engagement increased.”

Adams also told the podcast that sunsetting creates a more predictable regulatory environment for businesses.

“By moving regulations into statutes where appropriate, we reduce the whiplash effect across administrations,” he said. “This shift ensures stability, allowing businesses to plan for the long term without fear of sudden regulatory changes.”

According to Adams, regulations rise like rockets but fall like feathers.

This is, of course, a kinder version of the way I would put it, which is that, once born, a rule never truly dies until someone puts a pillow over it. Idaho finally chose to smother them. Wisconsin is still letting them breathe, sucking the oxygen out of our economy.

Then, too, the Idaho Legislature works part-time, but it takes them only 32 days a year to manage regulation review, Andrew Langer of CPAC reported late last year. It did not take some superhuman effort, just the steady work of determined lawmakers. And in the end, there was no crisis. The social order did not fall apart. Everything the critics claimed would happen didn’t.

As Adams related, the Idaho experience has been fertile soil not only for a new and dynamic government but for a new and dynamic business sector. Among other things, Adams observed, it frees up time—the scarcest resource of all—letting businesses innovate rather than marinate as regulators wait to cook them in the boiling oil of compliance. Idaho’s Board of Pharmacy slashed its rulebook from 100 pages to 26, for example, eliminating what Adams called nonsense micromanagement such as “the type of door pharmacies must use.”

Evidence of sunsetting success was around long before Idaho. According to the Texas Sunset Advisory Commission, since the commission’s inception in 1977, the commission has abolished 42 agencies and programs and consolidated (or transferred functions of) 54 more—totaling roughly 96 entities or programs.

It estimates a positive fiscal impact of about $1.1 billion in state and federal savings and revenue gains. The commission describes itself as producing a $17 return for every dollar invested in the commission since 1985. All totaled, the commission reported, 603 state agencies and programs have been reviewed since 1977. Colorado and Utah have had similar experiences.

But, if you’re an out-with-the-old-and-in-with-the-new kind of person, there’s even more recent evidence emerging that sunsetting works.

For years, critics have somehow claimed that sunsetting didn’t have measurable economic effects. That assertion was seriously called into question this year, when a study in the Journal of Regulatory Economics by Tanner Jones of Vulcan Technologies and Ryan Quandt of Claremont Graduate University identified the causal impact of sunset provisions in their article, “An iridescent sunset: An empirical analysis of sunset legislation,” and it was all good for sunsetting:

“Sunset provisions lead to a $14,000 GDP per capita increase in 2022 real dollars (or a 59.8 percent increase),” they wrote. The study years spanned 1963-2022.

Even the study’s more conservative synthetic-control model found a $3,000-per-capita gain in Tennessee. That is the sort of economic effect politicians normally refrain from promising unless they’ve had three drinks.

Moreover, the study identified three reasons for sunset success: Sunsets discipline managerial slack by creating a “credible termination threat.” They limit regulatory accumulation by forcing rulebooks to be re-read rather than worshiped. They increase flexibility—agencies can be redesigned, merged, or killed when outdated.

In practical terms, sunsets counter “political decay, or the drift of institutions toward self-preservation rather than service, by tying survival to demonstrated value.”

In Wisconsin terms, they would serve as a deterrence to the empires known as the DNR, DHS, and DATCP, cautioning that, once sunsets were enacted, agencies would ignore elected lawmakers at their own risk. No judicial lifeguard would be on duty.

In plain English, sunsets would shock agencies back into serving the people. And while the threat of terminating only regulations rather than whole agencies might not be as potent, it would nonetheless send a message to bureaucrats: Fewer regulations sooner or later mean fewer regulators.

To be fair, sunsets have critics. I looked long and hard to find some serious studies, but there were only a few, and they struggled to drive in the lane of relevance.

In 2022, Kristen Underhill and Ian Ayres, in “Sunsets Are for Suckers: An Experimental Test of Sunset Clauses,” claimed that adding sunset clauses only helped conservatives, as if that is the important metric to measure.

“But in an interaction between sunset and political valence, we found that sunsets increased support for conservative but not liberal legislation,” they wrote. “Subgroup findings confirmed liberals’ tendency to increase their support for conservative laws that contained a sunset clause (either standard or conditional). Conservatives, however, did not increase their support for liberal policies in the presence of sunset clauses.”

Lol, I suppose that’s another point for sunset clauses, though I doubt the authors would agree, but in any case the critique nonetheless misses the target. The Wisconsin bill isn’t about catering to partisan audiences; it’s about improving constitutional design and assuring oversight.

It’s about enacting good public policies. Sunsets aren’t meant to charm voters, liberal or conservative. They’re meant to frighten bureaucrats.

The real reason for sunsetting

In reality, sunsets do much more than save money or simplify regulation. While all sunsetting legislation is certainly designed to reduce the economic burden of regulation, it is also essential to accomplish another crucial goal: restoring the legislative oversight necessary to rein in a rogue bureaucratic state and to give the legislature back its proper constitutional role.

In so seeking, sunsetting is one of a few emerging strategies other states are using to drag their bureaucracies back under constitutional control. It would also stop treating bureaucrats with kid gloves by threatening them with extinction if they don’t perform a core service.

There are a lot of ways to skin a cat, but only one way to tame a bureaucracy: you have to make it fear you, rather than the other way around. In Wisconsin’s current climate—where, speaking of kids, executive agencies grab power like a toddler grabbing crayons, and courts increasingly oblige them with excess cartons of color—the timing couldn’t be better.

The result of Evers v Marklein has been a grotesque imbalance of power: the governor and the bureaucracies expand their authority while the legislature—the people’s branch—is left to enact suggestions for bureaucrats to follow when they sit down to write the real laws, also known as their rules and regulations.

At the legislative hearing on the Nass/Neylon bill, Kileen Lindgren, the Pacific Legal Foundation’s senior state policy manager, pointed to the very real outcome of such a state of affairs: tyranny.

She reminded lawmakers of John Adams’s caution long ago: “Inordinate power being vested in one branch—or worse in unelected government employees—is, as John Adams wrote, ‘the very definition of tyranny,’” Lindgren testified.

Lindgren also reminded lawmakers how far Wisconsin has fallen in protecting its democratic ideals.

“Wisconsin has been a leader in regulatory reform—being the second state to adopt targeted legislative oversight of rulemaking (also known as REINS-style reform) in 2017,” she testified. “And in 2018, it became one of only a handful of states to codify de novo review of legal challenges involving government agencies and align itself with state Supreme Court precedent to ensure judges do not stack the deck in favor of agencies in court.”

Despite that, Lindgren said, the Badger state remains one of the most heavily regulated states in the nation. Now is the time for the legislature to reclaim its oversight through sunsetting, Lindgren said, because somebody has to, and the state’s executive will not.

“Agencies are designed to be tools in the toolbelt of elected officials—established and empowered by the Legislature to carry out specific tasks on behalf of the people and overseen by the executive for a second layer of accountability,” she testified. “When the Legislature empowers agencies to make rules that have the force of law, it is necessary and appropriate to oversee those activities. And when the Executive cedes authority to agencies as independent experts, it fails to do its duty.”

The real reason for sunsets, then, is constitutional. It is the oldest question in self-government: Who makes the laws we live by?

Sunsets answer that question with a clarity the modern administrative state detests: the Legislature does, or at least it should—not the executive branch, not the bureaucracy, not special interests, not courts allergic to legislative oversight.

Yet over time, the executive branch has grown far more powerful than the legislative, for many unforeseen reasons. For one thing, even in states where legislators are full-time, they and their staffs can’t meet the focused power of multiple and fully staffed—and many overstaffed—agencies.

In addition, special interest groups often prefer to meet behind closed doors with bureaucrats to hammer out our preferred policy options, rather than meeting publicly with elected lawmakers. ‘Elected’ itself is another reason ‘stakeholders’ opt to meet behind closed doors with administrators: Voters and constituents tend to muddy up the works of what the experts ‘know’ is good public policy.

Bureaucrats don’t pose any such problem, since the revolving doors between special interests and the bureaucracies are always spinning. The bottom line is that agencies often work directly in opposition to the missions directed of them by elected officials, and they have the institutional power to impose their will and way.

Not to mention that none of this even considers that legislatures themselves have handed over much of the candy store to the regulatory state, unconstitutionally delegating their authority.

All of which leaves the bureaucratic state stronger and structurally favored in ways the Founders never intended. It has constant staff, constant mannequins of the ministries training their eyes on the mission of the machine.

And what weapon does the Legislature have? Well, for years, they had legislative review and oversight as the bulwark against administrative tyranny. It was, albeit, a weak weapon in a system of passive review, which, at least until the era of Scott Walker and Republican control of government, strengthened the ability to thwart it through what economic professors Brian Baugus and Feler Bose refer to in “Sunset Legislation in the States” as a credible veto power.

Their reference, it should be observed, is not to a veto power that is an unconstitutional encroachment on the core functions of the executive, but rather a constitutional checks-and-balances oversight veto that ensures that the power delegated to the administrative state is used as intended, as a condition of that delegation.

Now, after the state Supreme Court's decisions, the legislature has practically no power to resist the tyranny of the bureaucracy. And that’s where the true value of sunsetting comes in. It re-establishes that credible veto power.

As Baugus and Bose wrote in their 2015 paper, sunset legislation serves not merely as good government policies that compel government to reconsider whether certain agencies and rules are still necessary but as an effective bargaining tool to minimize the executive branch’s influence on state boards and agencies.

It levels the playing field, in other words, and gives the legislature a seat at the table along with those influential special interests. As Baugus and Bose acknowledged, with the sunset process, the legislature has credible veto power by singling out the agency or statute in question for intensive examination.

“This credible veto by the legislature creates a situation where the agency’s agenda is no longer executive dominated but is a negotiation between the executive and the legislature,” they wrote.

Termination is the threat that makes the other changes possible, Baugus and Bose found.

“As discussed earlier, few agencies are terminated, but enough are to make the threat credible,” they wrote.

In other words, the power dynamic flips, and it would work as well for sunsetting regulations as well as agencies.

One of the most striking conclusions in the Mercatus Research report is what doesn’t happen under sunsets: rent-seeking or using sunsets to secure political favors, such as donations or support.

“At the outset of this project, we hypothesized that the sunset process was primarily or exclusively a rent-seeking opportunity,” they wrote. “We assumed that the threat of terminating a board or agency activates the political apparatus of the regulated industry and generates a number of political favors accruing to the relevant policymakers.”

While such behavior can and undoubtedly does occur, Baugus and Bose wrote, they did not find it to be pervasive, with weak or nonexistent evidence. This is important because critics love to accuse sunsets of legislative shakedowns. The research says they’re wrong.

In sum, sunsets have many benefits. They make government more responsive, more efficient, and leaner. They help unburden people from unnecessary, duplicative, and burdensome regulations and provide an economic boost in doing so.

But, as important as all that is, the oversight authority that sunsets give to legislatures re-establishes their constitutional authority in a modern world stacked against their original form and function. It is vital.

To use the words of Paul Simon, sunsets and associated reforms put angels in the architecture of our democracy. And Lord knows we need angels in our modern world. Sunsets of government regulations (and government agencies) today allow for the sunrise of self-government tomorrow.