“Bail Out the Dead … Bail Out the Dead”
The funeral home industry has long been one of the most heavily licensed and regulated occupations in every state, and Missouri is no exception. This is one of the reasons that we here at the Show-Me Institute have not focused much on the Jeff City debate surrounding prepaid funeral plans. Because Missouri has fewer licensing regulations than other states, I instead prefer efforts to prevent new rent-seeking laws from being enacted. In states that have much more licensing than Missouri, it’s much more of a priority to overturn bad laws. But, anyway, the prepaid funeral debate made it seem as though an already heavily regulated industry would become a little more regulated — but an attempt by some funeral home directors to gain even more power over their own industry might be killing (and embalming) the golden goose.
Today’s Post-Dispatch has a very detailed story about the movements of the bill in question, Senate Bill 1 (sponsored by Sen. Delbert Scott). The bill is in trouble because of an amendment that has been pushed by the funeral home industry that would alter the current mortician board to have it filled by nine funeral home directors and one person not affiliated with the industry. That’s right, a nine-to-one ratio weighted toward an industry group getting to decide who is allowed to enter the occupation, which restrictions might be retained or initiated in order to benefit current businesses, etc. This is every bit as much of an effort to restrict competition as it sounds like.
In a shocking revelation that absolutely floored me, the funeral homes pushing this amendment are primarily the ones who lost the most when a national prepaid funeral seller went out of business last year. Now they are hoping to add new fees to help make up their loses:
Sen. Scott said Lindley’s group has floated the idea of a surcharge on death certificates or a surcharge on prepaid funeral plans to help offset the rest of the NPS contract costs. Scott said those ideas won’t fly.
The proposed changes to the board that is supposed to overseee the industry would make it easier for proposals like this one to be enacted by the industry. The entire story is a textbook example of the economic harm that is done when an industry becomes actively involved in its own regulation. Such regulations are quickly bent to help current practitioners, but not future competitors or current customers.
At least one current funeral home owner sees the proposed change for what it is:
Sue Heckart, who owns Heckart Funeral Home in Sedalia, Mo., served on the state regulatory board from 1987 to 1993. She said those seeking the amendment “made a bad business decision, so they’re trying to make the rest of us pay for their mistake. And ultimately, it’s going to affect the consumer.”
I commend Sen. Scott for his opposition, and this is one amendment that I hope to see die on the floor of the legislature. (Get it — funeral homes, die …)