Respondents cite health care, pensions, and union influence as hindrances to economic growth
PICPA partnered with the New Jersey Society of CPAs and the New York State Society of CPAs to identify the economic, business, and political trends affecting the tri-state region and national economies. The CPA Poll is part of the PICPA’s image enhancement campaign to position CPAs as thought leaders. Here are some of the most compelling results.
The majority of respondents predict that business revenues will go up marginally in the coming year. About half of respondents, however, do not believe job growth (55 percent) or salaries (47 percent) will change.
When evaluating overall U.S. economic conditions, most CPAs agree that the economy is about the same this year when compared with last and will remain the same in 2014. High unemployment, the Affordable Care Act (ACA), and entitlement spending were identified as the top three hindrances to economic growth.
Even though poll numbers show that CPAs characterize U.S. economic conditions to be stagnant, their opinions on some conditions in Pennsylvania are slightly more optimistic. In 2013, more Pennsylvania CPAs say state economic conditions are better compared to last year (28 percent) than said so in 2012 (21 percent). Forty seven percent surveyed said that revenue this year marginally increased and fifty two percent predict that revenue will marginally increase next year.
Reforming state and government pensions and benefits topped the list of recommendations for what would provide greater economic expansion and job growth potential in Pennsylvania. Second in line was the increased investment in repairs and upgrades to infrastructure such as roads and transportation systems. The PICPA’s Fiscal Responsibility Task Force has highlighted the state’s ongoing pension reform problems and infrastructure funding in both their 2011 and 2013 reports to legislature. The Task Force report included a number of policy options contained in House Bill 1060, a measure funding transportation initiatives, which was approved in mid-November.
Among the three states, Pennsylvania CPAs thought the ACA was affecting company decisions (56 percent). Only 44 percent of New Jersey and New York CPAs responded likewise. The survey also found that fifty four percent of Pennsylvania CPA businesses are re-evaluating their current insurance, one in three (31 percent) are postponing hiring decisions, and increasing part-time employees (30 percent) due to the Affordable Care Act.
Pennsylvania respondents fall between New York and New Jersey when reporting that red tape was worse than ever.
This year’s poll also asked CPAs about personal financial planning issues. Pennsylvania CPAs report that 56 percent of their employees are postponing retirement. When asked what the deciding factor was for delaying retirement, 72 percent cited the economy.
When asked what state regulation has the most negative impact on Pennsylvania businesses, PICPA members surveyed felt the influence of unions in pricing and contractor selection was number one (46 percent) with the complexity of the state tax code for businesses (21 percent) and restrictions on which contractors can be chosen for state and municipal projects (12 percent) coming in second and third.
Tri-State Responses and Comparisons
CPAs in New Jersey and New York blame high unemployment (N.J. 54 percent, N.Y. 49 percent) and entitlement spending (N.J. 40 percent, N.Y. 38 percent) for the lack of economic growth in the United States. Forty-three percent of CPAs in Pennsylvania cite the Affordable Care Act as their top reason for negative effect on U.S. economic growth.
One striking difference from New Jersey and New York was CPA opinion on the state’s tax structure. When asked whether Pennsylvania’s tax structure is better or worse than most other states, 81 percent of both New Jersey and New York CPAs rated it as worse. In comparison, only 44 percent of Pennsylvania CPAs rated state tax structure as worse.
More than 1,900 CPAs serving as CEOs, CFOs, accounting firm partners, and other industry leaders in Pennsylvania, New Jersey, and New York responded to the survey. The data for the survey was gathered during September and October 2013 by the Franklin & Marshall College Center for Opinion Research. Download the full report on the PICPA’s website.
Are these poll results consistent with what you are finding with your clients or in your industry? Did you find it surprising the high marks for Pennsylvania’s tax structure, compared to the responses in New York and New Jersey?