Results of the fifth annual CPA Poll, a joint effort between the Pennsylvania Institute of CPAs (PICPA) and New Jersey Society of CPAs (NJSCPA), show that CPAs in Pennsylvania are not wearing rose-colored glasses. Poll respondents also have some suggestions to resolve the state budget impasse.

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“As key business advisors and tax professionals, CPAs are uniquely positioned to offer tangible evidence on real economic and business conditions,” says Michael D. Colgan, PICPA’s executive director and CEO. “CPAs have their pulse on how businesses and individuals are performing and can offer their insight into the realities of the economic and financial climates in Pennsylvania and in the country.”

Nearly all polled Pennsylvania CPAs believe national economic growth in the past year has been negatively influenced by government gridlock (89 percent) and federal regulations (91 percent). On a more local level, two-thirds of Pennsylvania CPAs (67 percent) polled believe the state’s business climate hinders economic growth, a large increase from 51 percent in 2014. Additionally, two in five CPAs (39 percent) polled believe the economic conditions in Pennsylvania are worse than they were a year ago, a huge shift in results from 2014 when 49 percent of respondents felt that economic conditions would remain unchanged. Two in five Pennsylvania CPAs polled (39 percent) also expect the economic climate to continue to worsen over the next year. Polled CPAs cited pension funding for public employees, rising health care costs, and high taxes as issues that will hinder future growth in the state. However, the news was not all negative. Fifty-one percent of respondents expect increases in business revenue over the next 12 months, and 57 percent expect increases in salaries for their clients. Nearly half of Pennsylvania CPAs expect no change in 2016 with respect to investments (48 percent) or workforces (61 percent).

Surprisingly, 43 percent of polled CPAs were in favor of raising the personal income tax on Pennsylvania taxpayers—if the funds from the increase were earmarked for specific projects. The majority of CPAs in favor of the PIT increase would like to see it used for infrastructure (83 percent) and property tax relief (61 percent). To help balance the state’s sizable budget, CPAs are in favor of privatizing liquor stores (66 percent) and imposing a severance tax on Marcellus Shale drillers (57 percent). CPAs polled felt that reforming state government pensions and benefits (73 percent), reducing the corporate net income tax rate (49 percent), and reducing state spending (40 percent) were the three most important factors that would result in greater economic expansion and job growth potential in Pennsylvania.

Polled Pennsylvania CPAs also have recommendations to improve and streamline the state budget process. The top recommendations include estimated future period costs of proposed programs and laws (47 percent), future period costs of existing programs (44 percent), and listing sources and total costs of funding programs (41 percent). Other suggestions include listing performance of agencies against key economic indicators (41 percent) and clearly outlining assumptions of budget items.

For more information about the CPA Poll from PICPA and NJSCPA, or to read the full report, visit www.picpa.org/cpapoll.

The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premiere statewide association of more than 22,000 members working in public accounting, industry, government, and education. Founded in 1897, the PICPA is the second-oldest and fourth-largest state CPA organization in the United States. To learn more about the PICPA visit www.picpa.org.