The Charleston Post and Courier: South Carolina can modernize regulation and grow faster
South Carolina’s economy is strong. But from the Lowcountry to the Upstate, anyone who has tried to start or expand a business knows red tape isn’t an abstraction. It shows up as thousands of sometimes-subtle costs — time, fees, delays, uncertainty — to comply with state rules and regulations. Added up, this substantially slows economic growth.
State legislators have been paying attention, backed by research from Clemson University and the experiences of other states.
The problem isn’t that state regulations exist. It’s that they accumulate. Well-intended rules are layered on top of earlier rules. Some work well, some don’t, and some have become irrelevant. The code grows without a built-in mechanism to ask a basic question: Is this rule still needed, and is it delivering benefits to the public that justify its costs?
One way to see the scale is to count “restrictions” in the administrative code — terms such as “shall,” “must,” “may not,” “required” and “prohibited.” South Carolina’s Code of Regulations contained about 84,000 restrictions as of 2024 (the latest year available in the State RegData dataset). This was an increase of more than 7 percent since 2019.
As rules build up, they can distort investment decisions and slow productivity growth, which is the ultimate driver of wage gains for workers. Disproportionate burdens fall on smaller business and lower-income households.
The encouraging lesson from other states is that “regulatory reform” doesn’t have to mean “no regulation.” It can mean smarter regulations with clearer statutory authority, backed by better, more transparent analysis and periodically reviewed so the outdated or duplicative ones don’t linger indefinitely.
A proposal aimed at that kind of modernization has been circulating in the Statehouse. Last March, the House of Representatives passed H.3021 — the Small Business Regulatory Freedom Act — without a single dissenting vote, and the bill was referred to the Senate Judiciary Committee.
It would create a review committee to look at regulations that are pending readoption, require expiration dates and periodic renewal, require agencies to cite express statutory authority for their rules, pair new rules with removals through a “one in, two out” discipline, expand economic impact analysis (including retrospective assessment) and clarify that courts should not simply defer to a state agency’s interpretations.
A January 2025 study from Clemson University explains what’s at stake. It estimates that if South Carolina reduced regulatory requirements by 25 percent, the state’s annual real GDP growth rate could be about 0.7 percentage points higher — translating into roughly $10 billion in output over five years and about $24 billion over 10 years. These are model-based projections, not guarantees, but they illustrate how small improvements compound into large gains.
Real-world examples point in the same direction. Idaho’s “zero based regulation” initiative requires agencies to regularly justify existing rules. Three years after adoption, Idaho posted roughly 13 percent real GDP growth, compared with about 9 percent in South Carolina over the same period.
In Virginia, the Office of Regulatory Management reported earlier this year that it streamlined 35.7 percent of regulatory requirements and estimates more than $1.4 billion per year in savings to citizens.
None of this suggests that every regulation should be cut. Some rules may prevent real harms and deliver real benefits. A serious review process may find this to be the case as often as it recommends changes.
A South Carolina fiscal analysis notes that a true regulatory “readoption” system would require substantial resources. Other states’ use of AI to identify which regulations deserve scrutiny — including Virginia, Texas, and Ohio — shows that this concern may be overblown.
Nonetheless, the workload is a reason to modernize deliberately, with clear metrics and public reporting, and not a reason to accept “set it and forget it” regulation.
South Carolina can have smarter regulation and a strong economy. Whether lawmakers advance H.3021 as written, amend it or pursue a different vehicle, the economic case is clear: A more disciplined system can strengthen growth, expand opportunity and keep the state competitive for decades to come.
This op-ed was originally published in The Charleston Post and Courier on March 4, 2026.
