Ohio CPAs push back U.S. recovery prediction; urge stronger budget management measures for Ohio moving forward
(COLUMBUS, Ohio, December 9, 2009) – Ohio’s top CPAs responding to the seventh annual Ohio Business Poll have pushed back their earlier prediction by one year for when a sustainable U.S. economic recovery will begin.
About a third (36%) of respondents to the poll, conducted by The Ohio Society of CPAs (OSCPA), predict a sustainable recovery to start in the second half of 2010, while 26% put the turnaround in the first half of 2011. In the 2008 poll, the overwhelming majority of poll participants forecast a sustainable recovery coming in the last half of 2009 or the first half of 2010 (62%).
In addition, 65% of CPAs responding this year felt Ohio unemployment rates have not yet peaked. Nearly half (48%) believe it could take up to four years for the state to return to pre-recession unemployment levels of 5.8% recorded in December 2007.
Respondents were ambivalent concerning the effectiveness of the national stimulus packages at creating and retaining jobs in Ohio, with 26% saying the stimulus packages were neither effective nor ineffective and 23% responding that they were somewhat effective.
With regard to plans in their own organizations for staffing over the next 12 months, 70% said they will maintain current staffing levels and only hire to refill vacancies. Only 9% expect to add new jobs and18% will reduce the number of positions.
Ohio budget concerns
The state’s budget crisis concerns Ohio CPAs. When asked to rate their preferences for how to fix an anticipated $5 billion to $7 billion hole in Ohio’s next biennial budget, CPAs overwhelmingly (62%) favored conducting performance audits at all levels of government to identify efficiencies and cost savings; other preferred fixes included raising taxes on sin and luxury products (34%) and freezing the personal income tax rate at 2008 levels for two more years (32%).
These ideas were part of a larger set of financial strategies outlined by OSCPA’s Ohio Budget Advisory Task Force and presented to Governor Ted Strickland on Nov. 6. The Task Force, comprised of leading CPAs in the state, was formed in response to the Ohio Supreme Court’s decision on video lottery terminals at the racetracks, the subsequent loss of $851 million in budgeted revenue and the need for both short- and long- term state budget planning. The Task Force recommendations are quickly gaining support from many Republican and Democratic legislators.
“Ohio CPAs are very concerned about keeping Ohio a good state in which to live and conduct business,” said J. Matthew Yuskewich, CPA, Chair of OSCPA and the Ohio Budget Advisory Task Force. “In addition to solving the current budget shortfall, it’s imperative that the state implement long-term planning to reduce costs and find new, sustainable revenue sources.”
A copy of the Ohio Budget Advisory Task Force report is available for download on OSCPA’s Web site at www.ohioscpa.com.
The credit crunch
CPAs ranked health care costs (49%) and lending environment/sources of capital (42%) as the top two financial problems experienced by Ohio businesses right now.
In fact, 78% of CPAs said Ohio small businesses do not have access to adequate credit to sustain and grow their businesses. Seventy percent said they or their clients have been unable to borrow from an existing bank in the past year and 42% said their bank is no longer lending in their company’s industry sector.
Health care costs
Rising health care costs is another area CPAs identified as a top challenge for Ohio businesses. Shifting some of the burden of health care costs is a popular strategy. More than half (52%) will increase the premium portion paid by employees; 44% plan to shop for different health care plans; 35% will push greater management costs to employees through health savings accounts.
About the Ohio Business Poll
OSCPA conducts the Ohio Business Poll annually to gauge CPAs’ opinions about topics ranging from the national and state economy, business climate, state policies, tax structure and employee benefits. Respondents include managing partners, firm owners, corporate financial executives and others advising Ohio’s top business principals.
More than 500 OSCPA members responded to the November survey; 72% work in public accounting and the remainder are employed in the corporate sector.
The Ohio Society of CPAs, established in 1908, represents more than 23,000 CPAs in business, education, government and public accounting. The Ohio Society’s members not only meet statutory and regulatory requirements as CPAs, but also embrace the highest standards of professional and ethical performance. This is achieved through ongoing professional education, comprehensive quality review and compliance with a strict Code of Professional Conduct.
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LAST UPDATED 12/9/2009