FOR IMMEDIATE RELEASE
Contact: Amy Johnson
The Ohio Society of CPAs
800.686.2727, ext. 341 (office)
Municipal income tax and government regulation identified as key areas for reform
(COLUMBUS, January 16, 2012) - According to a new multi-state survey, CPAs in Ohio and surrounding states are slightly more optimistic about business growth in their respective states for 2012 than the nation as a whole. Those polled were most confident about their own industries and companies with more Ohio CPAs expecting marginal or substantial revenue growth than CPAs in neighboring states.
The Business Outlook Poll was conducted for The Ohio Society of CPAs (OSCPA) and state CPA organizations in Indiana, Michigan and Pennsylvania by The University of Toledo Urban Affairs Center in late in 2011. It polled nearly 13,000 CPAs who are partners or sole owners of public accounting firms or serve as CEOs, CFOs or presidents of companies in various industries. More than 2,100 CPAs completed the survey.
Information technology tops the list of capital investments planned in 2012. Survey respondents also anticipate some new hiring in the next 12 months. Health care costs continue to be a top concern of businesses along with government regulation and uncertainty in the tax laws.
“The poll shows businesses in Ohio and surrounding states are experiencing slow but consistent growth despite daunting economic and business challenges,” said James D. Gottfried, CPA, Chair of The Ohio Society of CPAs. “These include increasing costs for regulatory compliance, rising health care costs and a complicated tax structure in Ohio and nationally.”
Cautious optimism – jobs and spending
Only 6% of CPAs who responded predict robust growth in the U.S., but the numbers climb as they evaluated the growth outlook for their own state (9% overall), industry (20%), and organization (26%).
The CPAs surveyed did not report significant decreases in workforce or revenues since the financial crises took hold, and say they expect both areas to increase marginally in the next year. These CPA business leaders expect marginal (53%) or substantial (7%) revenue growth in the next year, with marginal (32%) and substantial (2%) growth in employment. Less than 10% of respondents expect a reduction in employment.
In Ohio, 62% of Ohio CPAs expect marginal (55%) or substantial (7%) revenue increases this year in their own organizations and marginal (33%) or substantial (2%) increases in employment.
When discussing their investment and spending plans over the next year, nearly 42% of Ohio CPAs plan marginal or substantial increases in capital spending this year, versus 40% in the four states combined. Information technology is a top priority, with 62% of CPAs in Ohio and 60% overall planning to spend marginally or substantially more in 2012. Product development and marketing/advertising will remain relatively flat with more than 50% of CPAs responding citing no change in either category.
Business and state concerns
CPAs and their clients listed the ability to obtain funding as a significant area of concern, with 78% in Ohio and 76% overall agreeing small businesses do not have access to adequate credit to grow or sustain their operations. The financial crisis and forecasts for slow growth have resulted in a tighter lending market that continues to affect small businesses.
CPAs also cite health care costs as a concern, with 98% of those surveyed responding affirmatively when asked if the cost of health care benefits was a worry for businesses in their state. Some are looking into this area for savings, with 94% agreeing that companies are reevaluating employee/benefit costs, while 63% of respondents acknowledge that companies are dropping or reducing employee health insurance coverage. Labor costs, workers’ compensation, and public pension funding were also seen as key concerns in all states, with public pension exposure taking the highest percentage among the three.
In Ohio, nearly 76% of CPAs agreed that state pension funding is problematic. It was identified in OSCPA’s 2009 Ohio Budget Advisory Task Force Report as an area for reform that could positively impact the state’s budget and continues to be an area of concern.
Taxes and government regulation
More than half of the respondents (61%) agreed that companies are taking advantage of available tax breaks, but few were using current low-interest rates as an opportunity to grow. Despite a general attitude that taxes, including specific taxes on business, and regulatory costs are a hindrance to businesses overall, CPAs overwhelmingly said those factors would not cause them to move their business/practice to another state.
But Ohio CPAs strongly believe there is room to improve the municipal income tax structure in Ohio. In all, 94% agreed either greater administrative uniformity, a more streamlined filing process, or both should be a goal in Ohio reform efforts.
Eighty five percent of Ohio CPAs were more concerned about overall government regulation than two years ago. In addition, 34% of Ohio respondents said state and local regulatory burden is a hindrance to attracting job creators to Ohio. When asked what other factors would help make Ohio more attractive to out-of-state job creators, CPAs listed better economic development packages than those offered by competing states (30%) and local government cooperation (26%) among their top choices.
An Executive Summary is available in The Ohio Society of CPAs’ online newsroom, along with hi-resolution graphs in the right sidebar.
About the survey
The Survey was conducted between Nov. 11 and Dec. 7, 2011 by The University of Toledo’s Urban Affairs Center for The Ohio Society of CPAs, the Indiana CPA Society, The Michigan Association of CPAs and The Pennsylvania Institute of CPAs. Combined, these organizations represent the professional interests of more than 70,000 CPAs.
The survey focused on current economic conditions and the effects it is having on businesses. The questions were selected to quantify what CPAs are seeing in their day-to-day operations, their clients’ organizations, and to gather opinions on how best to improve economic conditions in their respective states.
The Urban Affairs Center is an applied research unit of The University of Toledo. The Center has been serving the Northwest Ohio community for over 30 years and partners with local, regional and state governments, nonprofits and industries to analyze problems and identify solutions with the goal of promoting economic vitality and strengthening local communities.
The Ohio Society of CPAs, established in 1908, represents more than 22,000 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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