Académique Documents
Professionnel Documents
Culture Documents
EXECUTIVE SUMMARY
In Arizona, occupational licensing requirements and regulations stifle competition, diminish quality of
service, and drive up prices. Thousands of laws restrict entry into occupations for people wishing to become
cosmetologists, barbers, African hairbraiders, taxicab drivers, and street vendors. State agencies and occupational
licensing boards act as gatekeepers, restricting competition and ensnaring entrepreneurs in thick layers of red tape.
Arizona municipalities also create burdensome barriers. If a Phoenix business owner wants to remodel or
change the use of an existing structure, the city requires him to pay $630 to meet with its Development Services
Department. Then the applicant must ensure the proper application is filed, which costs at least $1,200. Once
final site approval is granted, an applicant must obtain several other permits and pay applicable fees. In Tucson,
would-be entrepreneurs must navigate a 17-step process that the city’s own Small Business Commission has
described as “seemingly never-ending.” And those are just two small tips on the regulatory iceberg floating in the
way of Arizona entrepreneurs.
Although regulatory boards and commissions are frequently defended on the grounds of alleged health or
safety concerns, the principal effect of many occupational licensing schemes is to promote the vested interests of
those already engaged in regulated professions, creating government-sanctioned cartels. To the extent that
regulation adds marginal protections for consumers, those protections come at a significant price in lost
productivity and lost economic dynamism. When government regulation is necessary, regulations should be
highly circumscribed, easily understandable, and narrowly tailored to achieve legitimate goals such as preventing
fraud.
Arizona’s elected officials have a duty to protect economic liberty and an obligation to allow for a dynamic
economy. If set free from burdensome and needless regulations, Arizona entrepreneurs would find it easier to
open new businesses. Among their ranks would be hundreds of low-income and minority entrepreneurs who
would be climbing the first rung on the proverbial economic ladder.
GOLDWATER INSTITUTE I policy report
2
December 8, 2003
3
GOLDWATER INSTITUTE I policy report
conducting a small business, taking into its credit, the Department of Commerce
account government-imposed costs such does try to help would-be entrepreneurs
as business, personal property, and sales by offering a one-stop-shopping center
taxes.17 Kevin McCarthy, president of online.24 The Department’s virtual
the Arizona Tax Research Association, representative offers a step-by-step
said he was surprised Arizona did so business checklist to help would-be
well, noting that Arizona’s tax scheme entrepreneurs determine which of
forces business owners to “pay property several state agencies might regulate the
taxes at two and one-half times what business, as well as to help navigate the
homeowners pay.”18 As a recent city, town, and county licensing
Goldwater Institute publication processes.25
explained, “although tax rates in the
The Arizona state state do not discriminate by property Numerous state agencies and boards
government has use, assessment values do, with business exist to enforce the state’s occupational
adopted a large number property assessed at 2.5 times that of licensing laws. A complete list of state
of regulations that erect private homes.” Not surprisingly, the regulatory boards is attached as an
unnecessary barriers to Goldwater Institute calls for elimination appendix, but a representative sample
market entry, increase of the property classification system and includes:
consumer costs, and, in the adoption of a uniform assessment
some instances, ratio.19 • Acupuncture, Board of Examiners
unconstitutionally bar • Board of Barbers
manufacturers direct The Arizona state government has • Board of Behavioral Health
market access. adopted a large number of regulations Examiners
that erect unnecessary barriers to market • Board of Chiropractic Examiners
entry, increase consumer costs, and, in • Board of Cosmetology
some instances, unconstitutionally bar • Board of Dispensing Opticians
manufacturers direct market access. A • Board of Funeral Directors and
good example of that kind of barrier is Embalmers
Arizona’s ban on the direct shipment of • Board of Optometry
out-of-state wines to consumers, which • Board of Physical Therapy
the Institute for Justice is challenging in • Board of Private Postsecondary
Federal District Court.20 Arizona also Education
forbids car manufacturers from selling • Board of Psychologist Examiners
automobiles directly to consumers.21 • Veterinary Medical Examining
Those laws do nothing more than Board
protect wholesalers and dealerships
while impairing access to consumers and State regulation of industries is
driving up costs.22 largely redundant in a civil society,
whose regulatory forces include
In addition to those restrictive laws, consumer choice, consumer watchdog
Arizona requires that a licenses for a organizations, insurer risk assessment,
large number of business activities.23 To and tort law. To the limited extent that
4
December 8, 2003
5
GOLDWATER INSTITUTE I policy report
population, and is well on its way to use of an existing structure, they must
taking over the number five spot.35 With follow a lengthy process, outlined in
luck, it won’t have the nation’s fastest- Figure 1. They must begin by scheduling
growing regulatory regime. a meeting with the city’s Development
Services Department.41 The meeting
Minorities own approximately 11 itself costs the prospective applicant
percent of all businesses in the Phoenix $630,42 and the meeting usually occurs
metropolitan area.36 That number is up about two weeks after it is requested.43
from recent years. However, because After the meeting, the would-be
minorities constitute one-third of entrepreneur must fill out an application
Maricopa County’s population, many and pay a fee, which is determined at the
minority-business advocates call for pre-application meeting and based on
reforms to improve conditions for the size of the project. The fee is based
minority entrepreneurs.37 Former Gover- on a complex equation involving
In Phoenix, a zoning
nor Jane Hull’s small business advocate, proposed use and complexity, with the
change costs an
Nereyda Lopez-Brown, pointed out that base fee running anywhere from $1,200
applicant $2,790, plus
many minorities are mired in the for parking areas to $5,200 for
$295 per acre for up to
complex regulatory process as they go commercial projects, with additional
40 acres, $150 per acre
from one agency to another simply costs per acre and surcharges for things
for 41 to 100 acres, or
trying to figure out which business such as “environmentally sensitive lands
$49 per acre for 100 or
permits or licenses are required.38 impact.”44 The applicant then files a
more acres.
preliminary site package, and may
In addition to having to visit various receive approval within 30 days.45 After
offices at city hall, would-be entre- that, the business owner must have his
preneurs wanting to open any kind of or her building plans approved. The next
business in Phoenix must first open their step is final site approval, followed by
wallets. The first stop would likely be the the issuance of a building permit.
Phoenix Planning Department to ensure Construction is followed by an
that the planned uses of their land do inspection and the issuance of a
not violate the city’s zoning code. If the Certificate of Occupancy.46
uses violate the code, those would-be
entrepreneurs can attempt to change the Businesses must pay a sewer fee and
zoning for their property through what a water fee to the city.47 A new
the city itself describes as a “lengthy and development (i.e., a new building on
costly process.”39 A zoning change costs previously undeveloped land) must pay a
an applicant $2,790, plus $295 per acre “development impact fee” and a “water
for up to 40 acres, $150 per acre for 41 resources acquisition fee.”48
to 100 acres, or $49 per acre for 100 or
more acres.40 If Phoenix entrepreneurs want to
put up signs, they need permits, which
If business owners want to erect a means paying additional fees to the
new building, or remodel or change the city.49 There is a $55 application fee, plus
6
December 8, 2003
After Meeting:
Pay Fee: File
Application Determined by preliminary
project size site package
If Phoenix
entrepreneurs want to
Final site Building plans Approval: 30 put up signs, they need
approval approval days permits, which means
paying additional fees
to the city. There is a
$55 application fee, a
Issuance of ground sign fee of
Issuance of
Certificate $115, and a billboard
building permit
of Occu- permit of $365.
Construction Inspection pancy Businesses must also pay
for the city to review
their site designs, at a
cost of $120 per hour.
a $60 permit fee for wall, window, seems that Bruce’s rotating barber pole
directional, construction, or real estate was the target of city zoning officials
signs.50 A permit for a ground sign costs because he did not have the proper
$115, and a billboard permit costs permit to plug in the pole.53 The permit
$365.51 In addition, businesses must pay application process, including public
for the city to review their site designs, at hearings and inspections, could have
a cost of $120 per hour, and to review cost him as much as $1,400. When
the structural engineering of their signs, Phoenix mayor Skip Rimsza, a customer
also at a cost of $120 per hour (with a of over 20 years, sat down for his routine
minimum of two hours). If the sign is hair cut, Bruce explained his problem.
electric, the owner must pay another Having a friend in a high place paid off
$120 for its inspection, plus $120 per for Bruce. The Phoenix City Council
sign for electrical component voted to exclude three-foot-tall poles
inspections.52 from the particular zoning regulation.
Unfortunately, most small business
An interesting anecdote concerning owners are not so well-connected.
electric signs and the zoning code
involves Phoenix barber Gary Bruce. It Any person entering the following
7
GOLDWATER INSTITUTE I policy report
8
December 8, 2003
A home-based business
cannot occupy more
Such a business cannot use any one Phoenix couple is likely in violation than 25 percent of a
mechanical equipment except that of the space requirements. Jeff and Amy residential property.
which would ordinarily be used for are in the enterprising business of Such floor restrictions
domestic, hobby, office, or household supporting their family of four by selling are arbitrary and do
purposes.74 Home-based businesses must items at online auction sites. The two nothing to promote
provide on-site parking.75 A permit from spend their weekends searching garage aesthetics or safety.
the city is required if: (1) the business sales looking for items that fit the old
generates traffic from individuals who proverb “one man’s junk is another man’s
do not live in the home, (2) business is treasure.” They have converted their
conducted in an accessory building, (3) living room into a mini-shipping facility
the business is conducted as an outside and photography studio, where they
use, or (4) the business would require an take pictures of the items they post on
exception to the restriction on odor, the Internet. They have also converted
dust, gas, etc.76 Certain businesses space in their home for warehousing the
cannot be operated on residential many videos, books, golf clubs,
property at all, including barbershops, collectibles, and other goods that are
beauty parlors, commercial stables, waiting a turn on the auction block.
veterinary offices, dog grooming From the outside looking in, the
businesses, massage parlors, restaurants, residence is completely quiet. Trips to
veterinary hospitals, and commercial the post office or private shipping
kennels.77 company are the only visible signs of the
business. Neighbors simply have no idea
A home-based business cannot there is a business operating inside the
occupy more than 25 percent of a home. Yet inside there is a thriving
residential property.78 Such floor home-based Internet business that
restrictions are arbitrary and do nothing allows the couple to make a comfortable
to promote aesthetics or safety. At least living while raising two children.
9
GOLDWATER INSTITUTE I policy report
10
December 8, 2003
Building code
Obtain inspection: $224
Prior to
Certificate of
issuance
Occupancy
Fire code
inspection
Zoning: Application
DSD deter- Request to
mines whether rezone/obtain Public hearing
properly zoned exception before Zoning Obtaining a business
Examiner license involves a
tedious process that
Consideration by forces would-be
Mayor and City entrepreneurs to
Council navigate multiple layers
of government with
sometimes overlapping
jurisdictions.
11
GOLDWATER INSTITUTE I policy report
Special licenses and/or fees are establishments and is used by the Pima
required for the following businesses: Health Department when evaluating
plans for food establishments. A busi-
• Adult care homes ($50 annual ness wishing to serve liquor must obtain
license fee)90 a license from the Arizona Department
• Auction houses ($50 license of Liquor Licenses and Control, and a
application fee and posting of a Liquor Business License from the city’s
$5,000 bond)91 Business License Section.101
• Youth dance halls ($25 daily or
$100/annual fee)92 Depending on a host of issues,
• Drive-in restaurants ($5 license businesses may also need to contact the
application fee)93 Pima County Recorder’s Office, the
• Fortune tellers ($100 license Pima County Assessors office, the
A Tucson business
application fee)94 Tucson Fire Department Fire Prevention
wishing to serve liquor
• Massage establishments ($50 Division, the State Compensation Fund,
must obtain a license
license application fee)95 and/or the Arizona Department of
from the Arizona
• Massage therapists ($25 license Revenue. A business will most likely
Department of Liquor
application fee)96 need to obtain a Business Privilege
Licenses and Control,
• Pawnbrokers97 license so that tax on retail sales can be
and a Liquor Business
• Swap meet operators (one-time passed on to customers and, last but not
License from the city’s
$24 occupational license tax)98 least, the business will need to obtain a
Business License
Business License from the Business
Section.
Businesses that involve food Licensing Section of the City of
preparation must jump through Tucson.102 The one-time fee for the
additional hoops to obtain a food business privilege license is $10.103
establishment operating license from the Businesses not subject to sales tax, such
Pima County Health Department. The as barbers and accountants, must obtain
Health Department publishes a 35-page an occupational tax license. The
“do-it-yourself ” manual, available over quarterly fee, which ranges from $24 to
the Internet, to guide entrepreneurs $186, is based on the number of
through the process of starting a food employees in the business.104
business.99 Food businesses must go
through a Plan Review Process that can Home-Based Businesses in Tucson
cost anywhere from $53 to $382 and
take up to 90 days.100 An applicant must Home-based businesses are
complete a plan review packet and permitted in Tucson, but are subject to
follow the guidelines established by the numerous restrictive laws. To operate a
Pima County Health Department and business from home, one must complete
the State of Arizona Food Code, as well a home occupation application.105
as consult the Food and Drug Home-based business must: (1) be
Administration’s Plan Review Guide, secondary to the residential use of the
which discusses design aspects for food dwelling; (2) be conducted in a manner
12
December 8, 2003
13
GOLDWATER INSTITUTE I policy report
14
December 8, 2003
15
GOLDWATER INSTITUTE I policy report
16
December 8, 2003
17
GOLDWATER INSTITUTE I policy report
18
December 8, 2003
19
GOLDWATER INSTITUTE I policy report
trucks, are subject to several fees and Ice cream trucks in residential areas
restrictions in Phoenix, while sidewalk are subject to several safety requirements
vendors – hot dog stands and the like – and cannot sell after 7:00 p.m., except at
cannot operate in Phoenix at all, except sporting events, where they may sell
in the downtown area, and then only until 9:00 p.m. Ice cream trucks are not
under limited circumstances.149 permitted to sell anything other than
food items and toys.156
Street vendors
Mobile food vendors
All Phoenix street vendors must have
and display a license from the city.150 The In fall 2000, Hispanic mobile food
license application fee is $130, and there vendors clashed with neighborhood
Too often, regulators
is an annual license fee of $30.151 A activists and city hall.157 The vendors
choose to use a
license is denied only to those who have cater to an almost exclusively Hispanic
sledgehammer when the
submitted a fraudulent application, clientele, selling Sonoran-style hot dogs,
precision of a scalpel is
violated city laws on street or sidewalk tacos, tamales, and Mexican sodas. Men
more appropriate. Why
vending within the past year, been like Hernán Rivera can earn anywhere
set up unnecessary
convicted of a felony within the past five from $400 to $3,000 a week running
licensing schemes when
years, had their street vendor licenses operations like his “Nogales Hog Dogs”
enforcement of existing
revoked within the past year, employed stand. The hot dog stand was a second
statutes can remedy the
persons who have lost their vendor job for Rivera so that he could support
perceived problems?
licenses in the past year, or employed his young family, and he hoped it would
persons in connection with the street or be a first step toward owning his own
sidewalk vending business who did not restaurant. He almost did not get his
have the required license.152 opportunity. The neighbors complained
that the vendors were open all night,
A street vendor cannot remain in often playing loud music.158 City officials
one place for more than an hour in any originally moved to shut down the
eight-hour period, and cannot sell vendors, but a “compromise” in the
within 600 feet of a school from 7:00 form of a licensing scheme was adopted
a.m. to 4:30 p.m.153 Street vending is after the vendors picketed city hall.159
prohibited entirely downtown, in public Now, vendors must pay a nonrefundable
parks, or on a street abutting a public $120 application fee and $30 per year
park within 150 feet of a “lawfully for a mobile vendor license.160 Vendors
established park concession.”154 Such must also be photographed and
park concessions are operated only by fingerprinted.161 They are prevented
those who have contracts with the Parks from operating between the hours of
and Recreation Board, and only they are 2:00 a.m. and 6:00 a.m. and from using
permitted to sell anything in public “bells, chimes, microphones,
parks, other than certain types of printed loudspeakers, or amplified music” as
material that can be sold by anyone.155 part of a mobile vending operation.162
20
December 8, 2003
21
GOLDWATER INSTITUTE I policy report
Board, and the degree to which must also obtain health permits from the
proposers’ operations plans meet the Pima County Health Department.175
standards of quality, price, and service Concessionaires not regularly licensed
desired by the board.170 All applicants are subject to fees: a vendor selling on a
must meet the city’s affirmative action regular basis must pay $160 per month
requirements.171 to sell in a regional park or $80 per
month to sell in a district park. Vendors
Phoenix is serious about cracking at special events must pay $20 per day.176
down on illegal park vendors. Since
January 2003, nearly a dozen vendors Tucson limits the amount of sound
have been cited by Phoenix park rangers that street vendors can make. It is
for illegal peddling.172 Such vendors unlawful to make sound in excess of 70
“specialize in everything from frozen decibels measured at a distance of 50 feet
Phoenix should learn
fruit bars to Native American jewelry.” from a pushcart, bicycle, or other
from Tucson, which
City officials recognize that such vending vehicle. It is also unlawful for
imposes minimal
vendors are simply trying to earn an vendors to make noise while their
restrictions on street
honest living but insist that “they just pushcarts, bicycles, or vehicles are not in
and sidewalk vendors
can’t do it in the park.”173 If it is litter motion, or between the hours of 1:00
and provides an
that the city fears, it should fine p.m. and 3:00 p.m., and 9:00 p.m. and
example of how free
scofflaws rather than prohibit vending. 10:00 a.m.177
and open competition
benefits entrepreneurs
Tucson Phoenix should look to Tucson as an
and consumers alike.
example of how minor, reasonable
Phoenix should learn from Tucson, restrictions on street and sidewalk
which imposes minimal restrictions on vending can protect consumers while
street and sidewalk vendors and provides allowing entrepreneurs to earn an honest
an example of how free and open living serving the people in their
competition benefits entrepreneurs and neighborhoods.
consumers alike. Because it is so easy to
obtain a vending permit in Tucson, the
number of ice cream truck owners and
sidewalk pushcart vendors has increased. Case Study: Cosmetology
As a result of increased competition,
vendors have been lowering their prices In 1996, Arizona’s Board of
and increasing their variety, offering Cosmetology placed a new host of
items such as the popular Mexican absurd barriers in the way of those who
paletas.174 would like to enter the cosmetology
business, regulating anyone who wants
Still, Tucson requires a permit to to earn money by cutting, washing,
vend in a public park. Vendors of styling, straightening, or otherwise
“potentially hazardous” prepackaged servicing people’s hair.178
foods or any non-prepackaged foods
22
December 8, 2003
23
GOLDWATER INSTITUTE I policy report
24
December 8, 2003
tripled in cost. The previous rule stylists take basic health and safety
provided for one examination at a fee of precautions, they should be free to use
$33, while the revised rule provides for their skills to earn a productive living
both a written and a practical without suffering needless and expensive
examination at a combined fee of $100. regulations. The Arizona Board of
The fee for the “personal license” has Cosmetology should stop protecting the
gone from an initial cost of $27 to $40, special interests of cosmetology schools
and the renewal fee has increased from and those who are already
$18 to $30. The various fees required for cosmetologists and start protecting
the salon or school license, the “Board consumers and would-be entrepreneurs.
administered educational classes,” the They should exempt hairbraiders from
review of examination, and other cosmetology licensing requirements
requirements have shot upward in a altogether and honestly evaluate whether
similar fashion. cosmetology licensing is actually in the As long as hairbraiders
public interest. and other stylists take
The story of Russell and Kristine basic health and safety
Blatchford’s struggle to open an in- precautions, they should
home, one-chair beauty salon is worth be free to use their skills
examination. In order to realize their Case Study: Child Care to earn a productive
dream, which would not be permissible living without suffering
under most city restrictions on home- While the state has a strong interest needless and expensive
based businesses, the Blatchfords in protecting the health and safety of regulations.
purchased a home in an unincorporated children entrusted to the care of others,
portion of Maricopa County.189 To the it is essential to avoid overregulation of
county’s credit, the Blatchfords were child care. Small and informal child care
granted a special-use permit to open businesses are ideal for entrepreneurs
their salon. However, in an attempt to outside the economic mainstream, and
force the Blatchfords out of business, convenient, affordable child care is a
several residents have started a drive to prerequisite for many parents to be able
ask the Town of Gilbert to annex the to work. Government should take all
land to put it under the town’s possible steps to encourage child care
jurisdiction. Gilbert’s zoning code businesses and to draft regulations to
prohibits salons as home-based avoid expensive or obstructive
businesses. According to the town’s requirements.
attorney, if the Blatchfords’ property is
annexed the decision over whether to Child care regulation in Arizona
allow the business to continue will takes place primarily at the state level,
depend in part on the ability to though Tucson places additional
demonstrate “a significant investment in burdens on home-based day care
the business.” centers.190 Arizona’s child care regu-
lations cover the entire spectrum, from
As long as hairbraiders and other the rational to the absurd. While the
25
GOLDWATER INSTITUTE I policy report
state of Arizona does not regulate child Child Care Group Homes
care facilities that provide service to less
than five children for payment or The state defines a “child care group
compensation, the state has numerous home” as a child care service provided in
regulations that make it difficult for a residential home for at least 5 children,
larger private providers to offer but no more than 10, up to 12 years of
affordable child care to the most age.193 The City of Tucson applies the
disadvantaged segments of Arizona’s same definition to classify a day care
population.191 Child care businesses operation as a home-based business.194
While the state has a providing service to five children or The state does not count the provider’s
strong interest in more are subdivided into two categories, own children for purposes of the “5 to
protecting the health “Child Care Group Homes” and “Child 10” range, but no more than 15 children
and safety of children Care Facilities,” each regulated by the may be present at any given time.195 A
entrusted to the care of State Department of Health Services. provider of group home child care must
others, it is essential to Repealing many of the paternalistic and obtain a license from Health Services
avoid overregulation of burdensome regulations governing and pay a $30 application fee.196 A
child care. Small and group homes and care facilities would certificate issued by Health Services is
informal child care allow regulated child care providers to valid for three years and is renewable
businesses are ideal for compete on a more level playing field along with a renewal fee of $30.197
entrepreneurs outside with unregulated providers without
the economic main- jeopardizing children’s health or safety. Many parents and group home
stream, and convenient, Increased competition would greatly providers do not object to regulations
affordable child care is benefit consumers by giving them more requiring background checks, health and
a prerequisite for many options, and would help ensure that safety inspections, and minimum
parents to be able to prices for child care services are insurance requirements. In fact, some
work. reasonable. providers like the idea of licensing as a
means of distinguishing themselves from
To its credit, Arizona’s Department unlicensed providers. But licensing can
of Economic Security administers the be a double-edged sword, as Chandler
Arizona Child Care Resource and group home provider Teresa Bagdol
Referral Network (CCR&R), a program discovered. Teresa had experience
designed to foster greater child care operating both in-home and commercial
services in response to unmet demand.192 day care centers in California and Texas
Where there is a disparity between and hoped to obtain a state license as a
supply and demand, CCR&R seeks to means of assuring parents of her
stimulate the development of needed qualifications – even though she cares
child care resources. Ironically, for only four children and is not
regulation is the likely cause of unmet required to have a license. But as soon as
demand: in an unregulated environ- she applied for a state license, Teresa
ment, supply would correct itself and no learned that she would first need to
“stimulation” would be necessary. obtain a use permit from the City of
26
December 8, 2003
27
GOLDWATER INSTITUTE I policy report
28
December 8, 2003
must be “totally enclosed by a secure for three years and must indicate the
fence” at least four feet high and number and age limitations of the
equipped with a self-closing latch that children and the classification of services
remains unlocked during business that the facility will provide.224 The
hours.219 Nearly all of those regulations license application must be submitted
should be repealed, and the provisions with fingerprint clearance cards for the
should be amended so that homes applicant and all personnel, and the
accessible to public parks and applicant must not have been arrested or
community green belts could qualify as charged for the same offenses that apply
child care group homes. for group home providers.225
A group home licensee must also Certain entities are exempt from the
provide educational and recreational statutes and regulations governing child
activities suitable for children, prepare a care facilities. Those include homes of
discipline and guidance plan, prepare a parents or blood relatives, religious
It is easy to see the
nutritional meal plan, submit to an institutions conducting nurseries in
irony in the fact that
annual sanitation inspection, and meet conjunction with religious services, units
none of these credentials
additional child transportation of the public school system, private
is necessary, or required
requirements. Transportation require- schools, facilities providing specific
by law, for a person to
ments include written permission from subjects such as dancing, drama, music,
become a parent.
parents prior to transporting enrolled self-defense, or religion, facilities
children, certain vehicle safety standards, offering only recreational instructional
and standards of conduct for vehicle activities for children who can come and
operators.220 The level of detail in the go at their own volition, and any of the
regulation of group homes is beyond Arizona state schools for the deaf and
what is necessary to provide a safe and blind.226 However, private schools off-
nurturing environment for children. ering child care services beyond regular
Health Services should engage in a school hours or to children not regularly
wholesale review of its regulations, with enrolled in their programs are subject to
the goal of eliminating well-meaning but the child care facility regulations.227
unnecessary regulations.
An applicant for a child care facility
Child Care Facilities license must be at least 18 years old,
complete at least four hours of Health
A “child care facility” is defined as a Services-provided training, and comply
facility in which commercial child care is with all state statutes and regulations.228
regularly provided for five or more An applicant must also fill out, sign, and
children not related to the proprietor.221 have notarized a registration form
As with a child care group home, a child containing the applicant’s name, birth
care facility must obtain a license from date, home address, and telephone
Health Services.222 The application and number, and must indicate whether he is
renewal fee is $150.223 A license is valid awaiting trial, or has been convicted of
29
GOLDWATER INSTITUTE I policy report
30
December 8, 2003
A child care facility must maintain square feet of indoor activity space for
the following staff-to-children ratios: for each infant or one-year-old child, at least
infants, one adult for every 5 children or 25 square feet for a child not an infant,
two adults for every 11 children; for one or over one year, and 35 square feet if
year-olds, one adult for every 6 children one year-olds are in the same area with
or two for every 13; for two year-olds, older children.241 The state also requires
one adult for every 8 children; for three that child care facilities provide an on-
year-olds, one adult for every 13 premises outdoor activity area.242 The
children; for four year-olds, one adult state could ease its indoor space
for every 15 children; for five year-olds, requirements without adversely affecting
one adult for every 20 children; and for safety or the learning environment, and
school-age children, one adult for every it should not require on-premise Regulating minutiae
20 children.238 outdoor areas if a provider can yields only marginal
demonstrate it has access to a park or benefits but does serious
Additionally, child care facilities playground. harm to child care
must comply with a laundry list of providers and
regulations involving diaper changing, How to Fix Arizona’s Child Care consumers. Costs
general nutrition, food service and Regulations imposed on existing
handling, discipline and guidance, providers are passed on
sleeping materials and equipment, The East Valley Tribune recently to parents as inflated
cleaning and sanitation, pets and published a year-long series of articles prices, and turn away
animals, accident and emergency examining what young children need in many would-be
procedures, illness and medication, and order to become healthy kindergartners. providers.
transportation standards.239 One aspect of the story was an
exploration into child care facilities. The
Although many of those regulations Tribune reported that nearly 500
are well-intentioned and designed to regulated child care facilities across
protect the health and safety of children, Arizona did not receive their annual
the state should closely scrutinize its inspections.243 The reason, according to
child care facility policies. Regulating the Tribune, is that the state’s 28
minutiae yields only marginal benefits inspectors spend the vast majority of
but does serious harm to child care their time investigating complaints
providers and consumers. Costs imposed rather than conducting routine
on existing providers are passed on to inspections.244 Over half of all
parents as inflated prices, and turn away complaints are dismissed outright, and
many would-be providers. most of the violations concern “too few
staff, substandard equipment and
Child care facilities must also inadequate programs for children.”245
comply with all local building, fire, and Arizona could address those complaints
zoning codes. A child care facility may through limited regulations stipulating
not be a manufactured home.240 Any that providers clearly present what they
child care facility must have at least 35 have to offer to potential consumers.
31
GOLDWATER INSTITUTE I policy report
32
December 8, 2003
33
GOLDWATER INSTITUTE I policy report
34
December 8, 2003
35
GOLDWATER INSTITUTE I policy report
12. Small Business Survival Com- 20. Geri Koeppel, “Suit challenges
mittee, “Small Business Survival Index state’s wine shipping rules: Group seeks
2003: Ranking the Policy Environment ability to buy out-of-state,” East Valley
for Entrepreneurship across the Nation,” Tribune, October 8, 2003. The Institute
www.sbsc.org. for Justice, which filed a case in Federal
District Court in Arizona, has
13. Amela Karabegovic, Fred successfully challenged similar
McMahon and Dexter Samida, restrictions on direct shipment of wine
Economic Freedom of North America in New York. See Swedenburg v. Kelly,
(Vancouver, B.C.: Fraser Institute, 232 F. Supp. 2d 135 (S.D.N.Y. 2002).
2002). For more information on Arizona’s wine
regulations, see Mark Brnovich,
14. Arizona Department of Commerce, “Trading Grapes: The Case for Direct
“Number of Businesses in Arizona,” Wine Shipping in Arizona, Goldwater
May 2002. http://www.azcommerce Institute Policy Report no. 184,
.com/pdf/smallbus/Number%20of%20 Goldwater Institute, November 18,
Businesses%20in%20Arizona%200506 2003, http://www.goldwaterinstitute
02% 20FINAL.pdf. .org/article.php/369.html.
15. U.S. Small Business Admini- 21. Ariz. Rev. Stat. § 28-4460.
stration, Office of Advocacy, “2002
Small Business Profile: ARIZONA,” 22. The Goldwater Institute reported
36
December 8, 2003
that restrictions on auto sales drive up (B)(1), Ariz. Rev. Stat. § 32-4227(A),
the price of a car anywhere from one to and Ariz. Rev. Stat. § 32-4222 (B)(2)).
four percent. See “42 Ideas,”12-14.
29. L. Romero, “Massage therapists
23. Arizona Department of Revenue, may face new rules; legislature considers
“Guide to Arizona Licensing bill,” Arizona Republic, April 16, 2003.
Requirements,” http://www.revenue. In fact, the most substantial “harm”
state.az.us/609/licensingguide.htm#PR asserted was the threat of prostitution.
OFESSION. But the law already prohibits
prostitution, so enforcement of current
24. Arizona Department of Revenue, laws, not a licensing scheme, is the
“Arizona Business Connection,” appropriate course of action.
http://www.commerce.state.az.us/webap
ps/SmallBusVR/intro.asp. 30. Ibid.
37
GOLDWATER INSTITUTE I policy report
35. U.S. Census Bureau, County and 48. Phoenix, Arizona, Code §§ 29-30.
City Data Book: 2000 (13th ed.), 642,
644. 49. Phoenix, Arizona, Zoning Code §
705.
36. Yvette Armendariz, “Minority-
Owned Business Up,” Arizona Republic, 50. Phoenix, Arizona, Code Appendix
August 28, 2002. A.2 § 71 and § 81.
41. Phoenix, Arizona, Zoning Code § 55. Phoenix, Arizona, Code § 10-72.
507.
56. Phoenix, Arizona, Code §§ 7-8, 7-
42. Phoenix, Arizona, Code Appendix 13
A.2 § 11.
57. Phoenix, Arizona, Code §§ 19-3,
43. City of Phoenix, “Development 19-5.
Services Dept. Major Commercial
Overview,” http://www.ci.phoenix.az.us 58. Phoenix, Arizona, Code §§ 19-3,
/DEVELOP/overview.pdf. 19-5.
38
December 8, 2003
63. Phoenix, Arizona, Code §§ 10-19, 71. Phoenix, Arizona, Zoning Code §
10-25.1. 608(C)(9)(a).
64. Phoenix, Arizona, Code §§ 10-34, 72. Phoenix, Arizona, Zoning Code §
10-36. 608(C)(9)(b) and (c).
65. Phoenix, Arizona, Code § 6-5. A 73. Phoenix, Arizona, Zoning Code §
state liquor license must also be 608(C)(9)(d).
obtained. The state’s application fee is
$100 and the actual license fee ranges 74. Phoenix, Arizona, Zoning Code §
from $100 to $2000 depending on the 608(C)(9)(e).
type of business seeking the license. Bar,
Beer and Wine Bar, or Liquor Store 75. Phoenix, Arizona, Zoning Code §
licenses must be purchased from an 608(C)(9)(g).
independent broker, as those licenses are
limited by quota and have been “sold 76. Phoenix, Arizona, Zoning Code §
out.” According to one web site 608(C)(9)(h).
(www.therestaurantbrokers.com/pages/i
nform/liquor.htm) one Internet broker 77. Phoenix, Arizona, Zoning Code §
was selling a license in Tucson for 608(C)(9)(i).
$7,000 and one in Phoenix for $12,000.
A transfer fee must also be paid to the 78. Phoenix, Arizona, Zoning Code §
Arizona Department of Liquor License 608(C)(9)(f ).
and Control.
79. http://www.ci.tucson.az.us/oed/Sit
66. Maricopa County Health Code, e_Map/Business_Resources/City_of_Tu
Chapter VIII, § 1(2). cson_SBC/city_of_tucson_sbc.html.
39
GOLDWATER INSTITUTE I policy report
94. Tucson, Arizona, Code § 7-64. 106. Tucson, Arizona, Land Use Code
§ 3(5)(7)(2).
95. Tucson, Arizona, Code § 7-134.
107. http://www.ci.tucson.az.us/planni
96. Tucson, Arizona, Code § 7-134. ng/homeocc.pdf.
97. Tucson, Arizona, Code § 19- 108. Nena Baker, “Taxi Industry In
28(109). State Unchecked, Uninsured,” Arizona
Republic, December 16, 2002.
98. Tucson, Arizona, Code § 7-202.1.
109. Ibid.
99. http://www.pimahealth.org/chfs/di
y_plan_review.pdf. 110. Ibid.
40
December 8, 2003
112. See Phoenix City Code § 4-82. natural gas was $31,140, while the same
Ford Crown Victoria originally
113. Ariz. Rev. Stat. §§ 28-5433, 28- manufactured to run on regular gasoline
5492. would cost $24,345, http://autos.
yahoo.com.
114. Ariz. Rev. Stat. § 28-4033.
123. Ibid., 4.
115. Ariz. Rev. Stat. §§ 28-2003, 28-
3002. 124. Ibid., E-3.
117. This is not to suggest that Phoenix 126. Phoenix, Arizona, Code § 4-70.
has an inadequate taxi market; given its
low population density, the supply of 127. Ibid.
taxis in Phoenix may be adequate to
meet consumer demand. 128. Phoenix, Arizona, Code § 4-78.
41
GOLDWATER INSTITUTE I policy report
rentals, land leases, fuel sales, airline 151. Phoenix, Arizona, Code § 31-30.
landing fees, and concessions.
152. Phoenix, Arizona, Code § 31-32.
139. http://www.tucsonairport.org/htm
l/tia_ground_taxi.html. 153. Phoenix, Arizona, Code § 31-24.
42
December 8, 2003
165. Phoenix, Arizona, Code § 31-25. 174. Ernesto Portillo Jr., “Ice Cream
Traffic Heats Up; Truck Owners,
166. Phoenix, Arizona, Code § 31-27. Walkers Vie for Business,” Arizona Daily
Star, August 10, 2002, B1.
167. Phoenix, Arizona, Code § 31-27.
175. Tucson, Arizona, Code § 21-4(b).
168. Phoenix, Arizona, Code §§ 31-26,
31-29. 176. Tucson, Arizona, Code § 21-4(c).
169. Phoenix, Arizona, Code §§ 31-26, 177. Tucson, Arizona, Code § 16-31(i).
31-29, 31-30.
178. Ariz. Rev. Stat. § 32-501.
170. City of Phoenix Parks and
Recreation Board, “Request for 179. See for example, http://www.univ
Proposals, Paddleboat and Canoe Rental ersities.com/Schools/A/Arizona_Acade
Concession, Encanto Park,” March 26, my_Of_Beauty.asp; http://www.universi
1999. ties.com/Schools/C/Carsten_Institute_
Of_Hair_And_Beauty.asp; and http://
171. The city should repeal affirmative www.universities.com/Schools/A/Allure
action requirements, which do little to _Career_College_Of_Beauty_Scottsdale
help those outside of the economic .asp.
mainstream while tending to bestow
entitlements on those with the greatest 180. Arizona Administrative Code § R4-
skill and resources. See Clint Bolick, The 10-304 (2002).
Affirmative Action Fraud (Washington:
Cato Institute, 1996) 4-5, 133 (Only 181. The author spoke with Essence
“the removal of barriers to opportunity Farmer on October 14, 2003.
that prevent individuals from
controlling their destinies” will achieve 182. MD Code, Business Occupations
the goals of affirmative action). For a & Professions, § 5-101(k)(2)(iii).
broader discussion of the principles of
empowerment as it relates to economic 183. The National Accrediting
liberty, see Clint Bolick, Transformation: Commission of Cosmetology Arts and
The Promise and Politics of Empowerment Sciences (www.naccas.org) is a nonprofit
(Institute for Contemporary Studies, corporation recognized by the U.S.
1998) 68-93. Department of Education as a national
accrediting agency for cosmetology
172. Yvonne Wingett, “Phoenix schools. The accreditation process
Targeting Illegal Vendors,” Arizona includes site visits and curriculum
Republic, July 28, 2003. reviews to ensure compliance with the
commission’s adopted standards.
173. Ibid. Schools are re-evaluated at least once
43
GOLDWATER INSTITUTE I policy report
191. Unregulated providers may have 201. Pursuant to Ariz. Rev. Stat. § 36-
two of their own children in the home 897.01(K), (L) an applicant must not
for a maximum of six children. Arizona have been arrested for or charged with
Department of Economic Security, an offense listed in A.R.S. section 41-
“Arizona Child Care Resource and 1758.03(B) or (F). Offenses listed in
Referral,” http://arizonachildcare.org/a section 41-1758.03(B) and (F) include:
law.htm. sexual abuse of a minor or a vulnerable
adult, incest, first or second degree
192. For more information about the murder, kidnapping, sexual assault,
program, visit http://arizonachild sexual exploitation of a minor or a
44
December 8, 2003
208. Arizona Administrative Code § R9- 223. Ariz. Rev. Stat. § 36-882(F).
5-802(A).
224. Ariz. Rev. Stat. § 36-882(G).
209. Ariz. Rev. Stat. § 36-883.02(C)(1).
225. Pursuant to Ariz. Rev. Stat. § 36-
210. Arizona Administrative Code § R9- 883.02(A), (C)(1), child care facility
5-802(B)(1). applicants must not have been arrested
for or charged with an offense listed in
211. Arizona Administrative Code § R9- Ariz. Rev. Stat. § 41-1758.03(B) or (F).
5-802(B)(2), (6).
45
GOLDWATER INSTITUTE I policy report
226. Ariz. Rev. Stat. § 36-884. 237. Arizona Administrative Code § R9-
5-401(5).
227. Ariz. Rev. Stat. § 36-884(4).
238. Arizona Administrative Code § R9-
228. Arizona Administrative Code § R9- 5-404(A).
5-201(A)(1), (5).
239. Arizona Administrative Code §§
229. Arizona Administrative Code § R9- R9-5-502 - R9-5-518.
5-201(A)(5). Applicants must not be
awaiting trial or have been convicted of 240. Arizona Administrative Code § R9-
a crime described in Ariz. Rev. Stat. § 5-601.
41-1758.03(B) or (F).
241. Arizona Administrative Code § R9-
230. Arizona Administrative Code § R9- 5-603(A), (B) (When computing indoor
5-301. space, the following are to be excluded:
room space occupied by teacher/
231. Arizona Administrative Code § R9- caregivers’ desks, file cabinets, storage
5-401(A)(1)(a)-(e). cabinets, hand-washing sinks for use by
staff, rooms used to isolate one child
232. Arizona Administrative Code § R9- from the other children, storage rooms,
5-301(A). stairs, entryways, hallways, kitchens and
bathrooms.)
233. Arizona Administrative Code § R9-
5-401(2). 242. Arizona Administrative Code § R9-
5-603(C).
234. STRIVE stands for Students
Together Rising in Vocational Edu- 243. Mary K. Reinhart, “Day Care
cation. The State Board of Education is Roulette: Lax Oversight at Facilities Puts
authorized to execute the powers and Kids at Risk,” East Valley Tribune,
duties of vocational education pursuant September 29, 2002.
to Ariz. Rev. Stat. § 15-203(A)(24).
244. Ibid.
235. Arizona Administrative Code § R9-
5-401(3). 245. Ibid.
46
The Goldwater Institute was established in 1988 as an independent, nonpartisan research and educational
organization dedicated to the study of public policy in Arizona. Through research papers, commentaries, policy
briefings and events, Goldwater scholars advance public policies based on the principles championed by the late
Senator Barry Goldwater during his years of public service – limited government, economic freedom and
individual responsibility. Consistent with a belief in limited government, the Goldwater Institute neither seeks
nor accepts government funds and relies on voluntary contributions to fund its work.
500 East Coronado Rd., Phoenix, AZ 85004 I Phone (602) 462-5000 I Fax (602) 256-7045 I email info@goldwaterinstitute.org