Kicking it Back Into High Gear! Continuing licensing and regulatory reform in Tennessee.


February 16, 2023 7:17PM

What do doctors, teachers, pest control applicators, and make-up artists all have in common? They all require an occupational license to work. Essentially, occupational licensing is a mandated government permission slip to obtain a job. And in recent decades it has exploded. The percentage of Americans who need a license to work has grown from five percent to closer to 29 percent since 1950, with most of this growth in lower-income professions. These regulations have a huge impact on the state’s economy. In a joint study with MTSU, Beacon found that these onerous licensing regulations conservatively cost Tennessee workers over $279 million just to enter an occupation of their choice.

Encouragingly, Tennessee policymakers began to respond and curtail unnecessarily onerous licenses. For instance, in 2017, Tennessee repealed its license to shampoo hair. In 2018 came the Fresh Start Act, which prevented a licensing authority from denying a license to an applicant with a prior criminal record unless their record was directly linked to the job sought. That same year lawmakers repealed what was perhaps Tennessee’s strangest license: beauty pageant operators. Additional reforms included exempting those practicing animal massage therapy from having to obtain a veterinarian license and removing the license to braid hair in 2018 and 2019, respectively. All of these efforts lead the Mercatus Center in 2018 to conclude that Tennessee had led the nation in occupation licensing reform.

But since then the momentum has slowed. After the litany of reforms from 2017 to 2019, only one license was eliminated. In 2021, the General Assembly repealed the locksmith license, joining the 36 other states that don’t regulate the profession.

This year, however, that could change with several reforms that lawmakers are considering. First is the repeal of the alarm system contractor license. According to the Institute for Justice, Tennessee’s alarm system contractor license is the second most onerous nationwide and it was included in Beacon’s Dirty Dozen back in 2017 as one of the licenses in most need of reform. Lawmakers should join two of our neighboring states and completely remove this license, making it easier for workers to participate in this innovative field.

Additionally, there is a proposal to repeal Tennessee’s soil scientist license. Starting in 2010, soil scientists were told at a minimum they needed a bachelor’s degree and three years of experience. One of the hopes given was that licensure would help grow the profession. Yet as our report The Game of Life showed, the profession has never grown above roughly 80 soil scientists in the whole state.

Finally, there is a new proposal to amend the home improvement contractor license. Home improvement contractors are limited to projects up to $24,999, while the general contractor, who generally focuses on building new homes and other larger projects can do projects from $25,000 and up. The cap on the project size for a home improvement contractor was set in 2007 and has never been adjusted for inflation. In today’s economic environment, it hurts homeowners who cannot afford a new home and need to do renovations as a cost saver. This arbitrary government restriction should at least be adjusted for today’s prices and indexed as inflation continues to soar.

Tennessee lawmakers garnered national attention for their work years ago leading the nation in making it easier to get a new job or a better job. While the momentum has slowed, this year is an opportunity to put the pedal to the metal and continue our trend of regulatory reform. Let’s hope they seize on the opportunity.