The Problem: A State Buried in Red Tape
West Virginia has accumulated one of the heaviest regulatory burdens in the nation. According to the State RegData project, the state now has 131,007 regulatory restrictions on the books — mandatory rules containing language like “shall,” “must,” and “may not” that impose obligations and prohibitions on businesses and residents alike. Between 2020 and 2025 alone, that count grew by 16.2 percent. West Virginia ranks as the 21st most regulated state overall, and 6th most regulated on a per capita basis — a disproportionate burden that falls hardest on the small and medium-sized businesses that form the backbone of its economy, and on lower-income households least equipped to absorb the costs. 131,007 Regulatory Restrictions. +16.2% Growth in Red Tape (2020–25). 6thMost Regulated Per Capita.
Who Gets Hurt — and How
Regulatory accumulation is not a bureaucratic abstraction. Research consistently shows it imposes real, measurable costs on businesses and families:
- A landmark 2020 study found that accumulating federal regulations slowed U.S. economic growth by 0.8 percentage points annually — leaving the economy $4 trillion smaller by 2012 than it would otherwise have been, a loss equivalent to roughly $13,000 per American per year.
- A more recent study found that a 10 percent increase in state-level regulatory restrictions slows state GDP growth by 0.37 percentage points.
- Regulatory accumulation hits small businesses hardest, and the drag on innovation grows larger as the regulatory stack gets taller — each new rule becomes more costly precisely because of all the rules that came before it.
- A 2017 study found that a 10 percent increase in regulation leads to nearly a 1 percent increase in consumer prices — and that price increases are regressive, hitting low-income households the hardest since they spend more of their income on heavily regulated necessities like food, utilities, and healthcare.
- As regulation grows, poverty rates tend to rise, and wage growth shifts away from lower- income workers toward compliance-related professions such as managers, lawyers, and accountants.
The Opportunity: Proven Reform Works
The good news is that reversing regulatory accumulation is both possible and proven. Several jurisdictions have demonstrated that systematic reform produces lasting economic gains:
- British Columbia cut its regulatory burden by 40 percent within three years starting in 2001, boosting the province’s economic growth rate by over one percentage point — transforming it from an economic laggard to a regional leader.
- Idaho reduced its regulatory restriction count by more than 50 percent under Governor Brad Little through a combination of a one-in, two-out regulatory policy and “zero-based regulation” — requiring agencies to affirmatively justify every rule on their books every five years.
- Virginia, under Governor Glenn Youngkin, has already eliminated roughly one-third of all regulatory requirements, saving Virginians an estimated $1.2 billion annually. Housing reform alone is projected to reduce the cost of building a new home by $24,000. Virginia’s Office of Regulatory Management accomplished all of this with just four full-time staff members.
What West Virginia Should Do
The report recommends West Virginia adopt one of two proven reform frameworks — or ideally, combine both:
- Targeted reduction: Set an explicit quantitative goal — such as a 25 percent reduction in regulatory restrictions within three years — and hold agencies accountable to it.
- Regulatory budgeting: Require that agencies eliminate a set number of existing restrictions for every new restriction they add (a one-in, one-out or one-in, two-out model). The strongest approach, as British Columbia demonstrated, is to pursue a targeted reduction first, then lock in gains with an ongoing regulatory budget to prevent re-accumulation
