Archive for category Research
‘Tis the season when many Americans donate to their favorite charity. While leaders in the nonprofit sector remain firm in their conviction that they are best suited to deal with Pennsylvania’s social and economic challenges they are concerned that public trust in charities is not as high as it should be. Those are among the findings of the 2016 Pennsylvania Charitable Organizations Survey conducted during the month of November by the Lincoln Institute of Public Opinion Research, Inc. in cooperation with the Pennsylvania Association of Nonprofit Organizations (PANO).
Among the participating nonprofits just ten percent said that public trust in charities is “high,” while 77% rated public trust as “medium.” Nine percent felt public trust in charities currently is “low.” Twenty-two percent of the nonprofit executives said the level of public trust in charities has gotten better over the past few years, but 31% said it has gotten worse.
Having said that, the nonprofit leaders feel their sector is best positioned to address Pennsylvania’s social and economic challenges. Forty-five percent identified their own sector as best suited to address those needs; 22% think state government is most effective; while 6% cite the for-profit sector. Just three percent said the federal or municipal governments can best handle those challenges.
“Public trust,” said Anne Gingerich, Executive Director of PANO, “is critical to the sustainability of any business – nonprofit, for-profit or government. When one nonprofit fails to live up to the highest standards it can damage the reputation of all.” She continued: “Unfortunately these stories overshadow the hundreds of nonprofits who give selflessly to ensure that lives are changed, not just during the holidays, but all year long.”
Like their counterparts in the for-profit world, leaders in Pennsylvania’s nonprofit sector say business conditions in the state have gotten worse over the past year rather than better. Concerns over potential new federal regulations and the growing likelihood of another extended state budget stalemate feed concerns that the commonwealth’s business climate will continue to deteriorate during the year ahead.
The survey found 15% of the nonprofit executives view business conditions in Penn’s Woods over the past year as having improved, 22% say business conditions have gotten worse. The majority – 63% – say the state’s economy has remained about the same. But “about the same” is not good as business confidence, whether for-profit or nonprofit, has been low for the past two years.
By comparison, a September 2016 survey of owners/chief executive officers of for-profit businesses found only five percent saying the state’s economy has improved in recent months while 50% said it had gotten worse.
Looking ahead, a third of the nonprofit leaders expect the state’s business climate to get worse while 22% predict it will get better. Forty-four percent say the Pennsylvania business climate will remain about the same during 2017.
Despite their overall pessimism about the direction of the commonwealth’s economy, employment was up at a quarter of the nonprofits, and down at 16%. That could be explained in part by some nonprofits stepping up hiring after having cut back staff during the budget stalemate of two years ago. However, looking ahead 22% say they expect to add employees while 14% predict staffing cuts.
Hanging over all sectors of the economy including nonprofits are U.S. Department of Labor (DOL) regulations that would increase the minimum salary requirements for “white collar” workers from $23,600 to $47,476 per year. The effect would be a significant increase in overtime costs. This is perhaps more significant for the nonprofit sector in that employees at many smaller nonprofits view their jobs as being community service as much as employment and often put in hours well in excess of those for which there are paid.
The 2016 Pennsylvania Charitable Organizations Survey found that the new regulations would increase payroll costs at 43% of the responding organizations as well as increase the amount of time spent tracking employee hours. The regulations are now on hold due to a federal court ruling, but should they go into effect 30% of the nonprofits surveyed said they would have to cut staff to pay for the increased costs of complying with the regulations; 11% would have to cut services and another 16% would respond by seeking additional volunteer help.
Pennsylvania’s nonprofit organizations were among those most significantly impacted by the lengthy state budget stalemate of two years ago. In light of that experience, 68% would support putting into place legislation that would incentivize lawmakers to adopt a state budget in a timely manner. Sixty-eight percent (some with board approval) said they would support legislation that would progressively penalize state lawmakers for missing the state budget deadline, with penalties increasing for each day past the June 30th deadline.
PANO’s Gingerich said nonprofit support of legislation penalizing lawmakers for budget stalemates is not surprising. “Not only clients suffer as a result of the impasse, but nonprofits themselves had to lay off staff and borrow money to continue operations. As partners with state government in providing mandated services, nonprofits should ask to be at the budget negotiation table.”
Unlike executives in the for-profit sector, nonprofit leaders are open to supporting a wide range of tax hikes. Thirty-seven percent said they would support an increase in the state’s Personal Income Tax (PIT), while 22% said they would not. Another 41% offer no opinion on the question. Likewise 43% would support imposing a new natural gas drilling tax of up to 6.5% specifically to support human services. Thirteen percent would oppose such a tax, and 43% offered no opinion. Similar support levels were voiced for the imposition of a new public health tax (ie: sugar tax, soda tax) of 1.5 cents per ounce dedicated to human services. The highest level of support – 50% – is for dedicating a portion of taxes generated by Pennsylvania’s gaming industry to support human services.
Despite their overall negative assessment of the direction of Pennsylvania’s business climate, more of the nonprofits participating in the 2016 Pennsylvania Charitable Organizations Survey said funding for this calendar year has increased than have seen decreases. A third of the nonprofits said funding is up, a quarter reporting funding has dropped and 43% said their funding levels have remained about the same. Looking ahead to 2017 about half of the nonprofits predict funding levels at their organization will remain static; 30% say they expect funding to increase; 20% are braced for funding to decrease.
By a two-to-one margin nonprofits have seen state funding levels decrease over the past five years. Twenty-one percent said funding from the state had dropped during that period of time while ten percent saw an increase in state funding. The other half of the organizations said funding from state government has remained about the same. Likewise there has been a slight drop in federal funding. Sixteen percent said their organization’s funding from the federal government has dropped over the past five years, 12% said federal funds have increased. Federal funding remained about the same at the remaining 45% of organizations surveyed.
Property tax exemption challenges remain a concern at some nonprofit organizations. Seven percent report having had their property tax exemption challenged over the past two years and 13% are concerned their municipal or county government may challenge their exemption next year.
Nonprofit organizations are not participating in lobbying activities in a major way. Just six percent say they have someone from their organization registered as a lobbyist under the Pennsylvania Lobbying Disclosure Act. Twenty-two percent have lobbied on a public policy issue at some level of government over the past year. Twenty-seven percent expect to lobby government at some level during the coming year. Gingerich urged nonprofits to engage in more lobbying activities. “Nonprofits must understand that not only can they lobby, but they are not doing their jobs if they do not. Together, the collective voice of the nonprofit sector has powerful, yet untapped power.”
The 2016 Pennsylvania Charitable Organizations Survey was electronically conducted during the month of November 2016. A total of 177 nonprofit organizations responded to the survey invitation. Complete numeric results are available at http://www.lincolninstitute.org.
Wolf Budget Proposals Deeply Unpopular Among Business Owners/CEOs
After nudging into positive territory last October for the first time since 2004, the outlook of Pennsylvania business owners and Chief Executive Officers has turned sharply negative in the wake of Governor Tom Wolf’s budget proposals. Every component of the governor’s proposed budget “reforms” received a sharply negative response from the state’s job creators in the Lincoln Institute’s Spring 2015 Keystone Business Climate Survey.
Four years of business friendly policies implemented by the administration of former Governor Tom Corbett created a positive outlook from business owners and CEOs for the first time since George W. Bush was still in his first term. Albeit slight, in October 2014, 19% of the business leaders said the state’s economic conditions had improved during the preceding six months, while 18% felt they had gotten worse. Six months later, the picture has taken a dramatic turn for the worse. The Spring 2015 survey found 33% of the owners/CEOs responding that business conditions have gotten worse over the past six months, only 13% say business conditions have improved. Pessimism for the future has deepened, as 44% say they expect the state’s business climate to get worse over the coming six months while just 12% expect the Pennsylvania economy to improve.
Driving the dour mood among the people who actually run businesses – big and small – is a general disapproval of Governor Tom Wolfe’s budget proposals. A total of 78% disapprove of his proposed budget, with 60% saying they strongly disapprove. Just 17% gave the governor a thumbs-up; and only 6% strongly approve of his proposed fiscal policies. Overall, 80% say the governor’s proposed state budget will harm Pennsylvania’s business climate – 56% say it will do significant harm – while 14% think his proposals will improve the state’s business climate.
The state’s job creators are bracing themselves for higher taxes. As a side note, Pennsylvania’s high tax rates and stringent regulatory policies are viewed by the owners/CEOs as the biggest impediments to conducting business in Pennsylvania. They now fear that situation is about to get worse. Seventy-two percent say the proposed Wolf Administration changes to the state’s tax structure will result in them paying higher taxes, 36% say they expect to pay significantly higher taxes. Only 3% expect their taxes to drop if the Wolf agenda is enacted, while 13% say they expect to pay about the same amount in taxes. Another 11% don’t yet have enough information to render an opinion.
Cutting the state’s onerous Corporate Net Income Tax (CNI) and eliminating the double taxation brought on by the Capital Stock & Franchise Tax have long been goals of business advocacy groups in Pennsylvania, but the Wolf Administration plan of coupling those cuts with other tax law changes creating a net increase in business taxes has business owners/CEOs opposing the entire proposed package. Sixty-two percent disapprove of the governor’s proposed business tax plan, 25% voiced approval.
And that was the high point for the governor. Other proposed changes drew even stronger opposition from the business community. His proposal to increase the state’s sales tax from 6% to 6.6% and to apply the sales tax to a wide array of products and services not currently subject to sales tax drew opposition from three-quarters (75%) of the respondents with 61% expressing strong disapproval. Twenty-four percent agreed with the proposed sale tax hike.
Raise the personal income tax rate from 3.07% to 3.7%? Eighty-three percent of respondents to theSpring 2015 Keystone Business Climate Survey said they disapprove, 70% voiced strong disapproval. Sixteen percent approve of hiking the personal income tax (PIT) rate.
There is also deep suspicion over the governor’s plan to have the state pay a larger share of public education costs (with revenue from a higher and broader sales tax) and allow local school districts to decrease property taxes. Seventy percent say any drop in property taxes will be temporary, and then property taxes will rise again. Less than 2% say they expect a significant property tax cut as a result of that proposal while 13% say they might realize a slight reduction in property taxes. That is offset by the 14% who expect to pay higher property taxes.
Respondents to the survey also now oppose adding a tax on companies drilling in the Marcellus Shale region. In the Fall 2014 Keystone Business Climate Survey 51% approved of an extraction tax. Support for that tax dropped to 45% in the current poll, while opposition rose from 44% last Fall to 50% in the current survey.
Overall, Governor Tom Wolf has proposed a state budget that would add $4.6 billion in increased spending to the state’s current $29.4 billion budget. By a wide margin, business owners/CEOs say that is too much. Eighty-four percent say his spending increases are too high; 11% think they are about right; and just 1% think they are too low.
Government regulation is cited as the biggest barrier to job creation by 64% of the business owners/CEOs participating in the Lincoln Institute’s survey. That factor is driving the negative mood of job creators in that two of the most aggressive regulators in recent state history now serve as Governor Tom Wolf’s chief of staff and top policy advisor. Thirty-six percent cited corporate taxation as a barrier to job creation while, 43% blame national economic factors.
Employment levels remained stable over the past six months. Eighteen percent of the owners/CEOs said they employ fewer people, while 16% said they have increased employment. Sixty-three percent reported employing the same number of individuals. Looking ahead six months, 18% say they plan to add employees, 13% expect to employ fewer people. Sales decreased at 32% of the companies participating in the survey, but increased at 28%. Looking ahead 35% forecast rising sales, 18% are projecting a drop.
Job Approval Ratings
Governor Tom Wolf received a strongly negative job approval rating in his first appearance in theKeystone Business Climate Survey. Sixty-nine percent disapprove of the job the governor is doing, while 14% approve. Only President Barack Obama fared worse among the business owners/CEOs, 87% disapprove of the Presidential job performance with 10% voicing approval.
U.S. Senator Robert P. Casey, Jr. likewise finds himself deep in negative territory as 64% disapprove of his performance in office while 14% approve. U.S. Senator Patrick J. Toomey fared better, with a 51% job approval rating against a 23% negative rating. Toomey was the only federal official in positive territory. The owners/CEOs also approve of the job being done by new Federal Reserve Board Chairman Janet Yellen, 41% approve to 26% disapprove. And U.S. Treasury Secretary Jack Lew drew an 8% approve against 44% who disapprove of the job he is doing.
The legal problems and controversies surrounding Attorney General Kathleen Kane have taken a toll on her standing among the state’s business leaders. Her negative rating jumped from 49% in the Fall 2014 survey to 62% in the current poll. Conversely, her positive rating dropped from 16% six months ago to just 7% in the current survey. Even state Auditor General Eugene Depasquale, the only statewide constitutional officer to avoid scandal, finds himself in negative territory – as 21% disapprove of his performance in office, while 13% approve. But, 65% offered no opinion.
Legislative bodies at both the state and federal levels continue to be unpopular. Just 11% approve of the job being done by the U.S. Senate, 79% disapprove. The U.S. House of Representatives earned a 20% approval rating with 71% voicing disapproval. The Pennsylvania Senate is viewed positively by 26% of respondents, and 56% disapprove. The Pennsylvania House of Representatives fared best among the legislative chambers, with a 28% approval rating against a 55% disapproval number.
The Spring 2015 Pennsylvania Business Climate Survey was conducted electronically by the Lincoln Institute of Public Opinion Research, Inc. between April 1 and April 28, 2015. A total of 351 responses were collected. Of those, 83% were from the owner of a business, 14% from the CEO/COO/CFO. Less than 2% were from a state or local manager of a business.
Geographically, 27% of the respondents were from southeastern Pennsylvania; 18% from southwestern Pennsylvania; 19% from south central Pennsylvania; 11% from northeastern Pennsylvania; 9% from the northwestern portion of the state; 9% from north central Pennsylvania; 4% from Altoona/Johnstown and 4% from the Lehigh Valley.
Complete numeric results of the poll are available at www.lincolninstitute.org.