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Bellwether: PA Again the Keystone State


If early polls are any indication, Pennsylvania is posed to be one of the major battleground states as Donald Trump and Hillary Clinton enter the final months of the 2016 presidential campaign. Some polls give Mrs. Clinton a one to three point edge; others place Mr. Trump in the lead by the same margin.  Both campaigned here pre-convention and voters likely will see a lot of the candidates and their running mates now that the general election phase of campaign is underway.

In political parlance Penn’s Woods can be viewed as one giant focus group.  We are, in many ways, a microcosm of America.  Philadelphia is a large eastern city; Pittsburgh is a mid-sized, mid-western city, with smaller cities like Erie, Harrisburg, Scranton and Allentown dotting the map.  We have thriving suburbs in the collar counties outside of Philadelphia and in places like Washington and Westmoreland counties near Pittsburgh. And, of course we have vast rural expanses.

Pennsylvania is economically diverse as well.  Manufacturing has struggled – as it has nationwide, but the commonwealth is home to high tech industries, pharmaceutical research, world-class medical centers, and thriving retail centers.  We have abundant natural resources, especially gas reserves and coal and fields overflowing with everything from apples to corn.

The diversity of our state’s economy has shielded it from the outer fringes of economic booms and busts, but for a variety of reasons having to do with both federal and state public policy our business climate remains stagnant with slow growth causing frustration across the economic spectrum.

A rare point of agreement is that the nation is sharply divided on how to proceed.  At times we can’t even agree on what the problems are, much less arrive at a consensus on solutions.  Against this backdrop, the Lincoln Institute of Public Opinion Research surveyed delegates and alternate delegates to the Republican and Democratic national conventions to determine how big of a divide separates the two parties.

The delegations begin with polar opposite views on the role of government itself.  When asked whether the federal government is an adversarial force when it comes to helping to solve problems, or is it a positive force in helping people 97% of the Republican delegation said government is an adversarial force.  Democrats were almost evenly split on the question, with 52% viewing government as a positive force, and 48% saying it is adversarial.

There is disagreement on an even more fundamental question: whether we as Americans have natural rights that are God-given, or are our rights granted to us by government.  Again, Republicans were nearly unanimous with 97% saying our rights come from God. A majority of Democrats – 61% – think our rights are granted to us by government; 39% say our rights are God-given.

Pennsylvania’s delegations to the Republican and Democratic national conventions have vastly different views as to which issues should top the national agenda with one exception: Supreme Court nominations.  Both delegations place the selection of nominees to the Supreme Court of the United States on their lists of top three important issues.  From there the delegations diverge.  Republicans place the protecting of constitutional rights and ISIS/terrorism in their top three; Democrats are concerned about income inequality and the development of alternate energy sources.

As could be expected, the delegations have sharply different views on the impact of the Obama Administration.  For example, 70% of the Democratic delegation believes the administration’s foreign policies have made America more secure; 99% of Republicans say they have made the nation less secure.  Ninety percent of Democrats say the Obama approach to ISIS/international terrorism is on the right track; 100% of the Republican delegation said it is on the wrong track.

Republican nominee Donald Trump has made illegal immigration a cornerstone of his campaign for the presidency.  Twenty-six percent of the Republican delegates/alternate delegates backed his call for banning all Muslims from entering the country; 64% support banning entry from countries that are hotbeds of terrorist activity.  Not a single member of the Democratic delegation backed banning all Muslims with 97% saying current laws are sufficient.

Do the two delegations agree on anything?  The closest they come to agreement is on the proposed Trans Pacific Partnership.  Here Democrats disagree with President Obama, who is the main proponent of the deal, with 69% opposing TPP.  Sixty-one percent of the Republican delegation also oppose the free trade agreement.

The deep ideological and policy divisions among the state’s delegations to their respective national conventions reflect the electorate at large.  The battle for Pennsylvania will be hard fought between two vastly different views of where the nation is today and of America’s future.

(Lowman S. Henry is Chairman/CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.)

Permission to reprint is granted provided author and affiliation are cited.

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Crash and Burn: Wolf Job Approval Rating Hits Record Low


There is an old Irish proverb that holds “There’s nothing so bad it couldn’t be worse.”  That applies to Governor Tom Wolf’s job approval rating with the owners and chief executive officers of businesses throughout Penn’s Woods.  It has now dropped to the lowest point ever recorded by a governor in the 21-year history of the Keystone Business Climate Survey. The poll is compiled each Spring and Fall by the Lincoln Institute of Public Opinion Research.

Eighty-nine percent of the business leaders surveyed said they have a negative view of Governor Tom Wolf’s job performance; just 5% give him a positive rating.  That eclipses the previous record disapproval recorded by Governor Ed Rendell in the Fall of 2009 when 86% offered a negative assessment of his job performance.  It is also a 20% drop in approval for Governor Wolf from one year ago.  In fact, the governor’s job approval rating has now sunk below that of President Barack Obama who tallied an 88% job disapproval rating.  It is the first time a Pennsylvania governor’s job approval has dipped lower than President Obama’s.

Business Climate

Driving the Governor’s record low job approval rating is a growing pessimism over the state’s economic climate.  In numbers not seen since the depths of the Great Recession in 2009, 54% of the business owners and CEOs say Pennsylvania’s business climate has gotten worse over the past six months.  That is up from 33% who experienced worsening economic conditions one year ago.  The number of respondents saying the state’s business climate has gotten better over the past six months stood at just 6%, down from 13% one year ago.  Looking ahead, 76% expect the state’s business climate to worsen over the coming six months, 8% look for conditions to improve.

In recent years, employment levels have held relative steady.  That has now changed as 22% said they employ fewer people than they did six months ago, 9% report an increase in employment.  In what passes for optimism in this poll, the same number (15%) predict employment levels at their business will rise or fall over the coming six months.

Another turn-around is in company sales.  After steady or moderate increases in sales, the Spring 2016 Keystone Business Climate Survey found sales had dropped at 39% of the companies responding, and increased at 18%.   But, 27% project a sales increase over the coming six months while 15% say they look for sales to decrease.

State Issues

About a third (30%) of the business leaders polled said their business had been harmed by the state budget impasse.  But, 85% think Governor Tom Wolf’s proposed state budget will harm Pennsylvania’s overall business climate; 65% say it will inflict significant harm. Seven percent see the Wolf budget as helping the state’s economy.

Governor Wolf claims the state has a “structural budget deficit” of over $1 billion dollars.  Assuming that is correct, 77% of the CEOs/owners said the state should cut spending to match revenue.  Eighteen percent support a combination of spending cuts and tax hikes to balance the budget.  About 1% suggested maintaining current spending levels and raising taxes to cover the deficit.  Just 1% support Governor Wolf’s approach which is to increase spending and increase taxes to cover both the deficit and higher spending.

As part of his budget proposal, Governor Wolf has included an 11% increase in the state income tax for all individuals and businesses.  Ninety-four percent oppose that proposal; 5% are in agreement.  Another Wolf initiative is to raise the state’s 6% sales tax to help balance the budget.  That idea was turned thumbs down by 73% of the poll respondents, but earned the support of 25%.  Opposition was especially strong to the idea of increasing the state’s Corporate Net Income (CNI) tax.  Ninety percent oppose the idea with 76% expressing strong opposition.  Six percent support raising the CNI.

In the absence of a state budget, Governor Tom Wolf has continued to spend money on those items he deems appropriate.  When asked if they think it is constitutional for the governor to spend state tax dollars on line items that have not yet been approved by the legislature, 87% said it is not; 5% think it passes constitutional muster.

The business owners and CEOs participating in the Spring 2016 Keystone Business Climate Survey do not want a state budget adopted at any costs.  When asked if they agree or disagree with this statement: A new state budget should be adopted immediately even if it means significant increase in my taxes, 89% disagreed – 80% strongly disagreed.  Nine percent agreed and said a state budget should be adopted regardless even if it means higher taxes.

On other issues, the Pennsylvania State House of Representatives is considering impeachment proceedings against Attorney General Kathleen Kane. Kane is under indictment for allegedly leaking Grand Jury information and has announced she will not seek re-election in November.  Fifty percent of the business leaders said the House should drop impeachment proceedings; 41% think impeachment proceedings should continue.

The Pennsylvania General Assembly is considering the legalization of medical marijuana.  Sixty-three percent support the legalization of medical marijuana; 31% oppose legalization.

By executive order Governor Tom Wolf has raised the minimum wage for state employees to $10.15 per hour.  Eighty-one percent of the CEOs/business owners said they oppose raising the minimum wage for the private sector to that level; 17% would support such an increase in the minimum wage.

Job Approval Ratings

President Barack Obama continues to receive strongly negative job performance reviews from survey participants.  Eighty-eight percent disapprove of the job the President is doing; 9% approve.  Janet Yellen, Chairman of the Federal Reserve Board also received negative marks: 44% negative to 18% positive as did U.S. Treasury Secretary Jack Lew with 39% disapproving of his job performance and 5% offering their approval.

The only official tested with a net positive job approval rating was U.S. Senator Pat Toomey.  The state’s junior senator was given a positive rating by 48% of the business leaders against a 24% negative rating.  U.S. Senator Robert P. Casey, Jr. scored a 14% positive, 56% negative rating.

As noted, Governor Tom Wolf received a record high disapproval rating at 89%.  That was worse than the negative rating given to Attorney General Kane.  The indicted top law enforcement official received a 75% negative rating and a 10% positive rating.  Two-thirds or more offered no opinion on the two statewide fiscal officers.  Auditor General Eugene DePasquale got positive marks from 15%, with 17% offering a negative view.  State Treasurer Tim Reese had a 17% negative rating against an 8% positive rating.

Participants in the survey offered a strong negative view of the job being done by the United States Senate: 77% hold a negative view of the institution’s job performance with 12% having a positive view.  The U.S. House of Representatives fared a bit better with 72% offering a negative assessment and 18% a positive view.  Fifty-one percent of the respondents give the Pennsylvania State Senate negative marks, 37% think the state senate is doing a good job.  Fifty-one percent have a negative view of the job being done by the Pennsylvania House of Representatives; 39% say the lower chamber is doing a good job.

Methodology

The Spring 2016 Keystone Business Climate Survey was conducted electronically from March 14, 2016 thru April 1, 2016.  A total of 367 individuals responded of which 84% are the owner of their business; 13% are the CEO/COO/CFO and 2% are a state or a local manager. Complete numeric results can be viewed at http://www.lincolninstitute.org.

For interviews on this survey please contact Lowman S. Henry at717 671-0776 or lhenry@lincolninstitute.org.

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Governor Wolf Posts 82% Disapproval Rating


Malaise: Business Owners Turn Deeply Negative

Governor Wolf posts 82% disapproval rating

Governor Tom Wolf, who owned and operated a mid-sized business before running for office, has become enormously unpopular with his former peers posting the second highest negative rating for a governor in the 20-year history of the Keystone Business Climate Survey.  The September poll of business owners and chief executive officers found 82% hold a negative view of the governor’s job performance while 12% say he is doing a good job.

The governor’s budget proposals lie at the heart of the business community’s disapproval. Eight-one percent say the Wolf tax and spending plans would harm Pennsylvania’s business climate, 64% say they would do significant harm.  Further, Wolf gets the lion’s share of the blame for the budget impasse.  Fifty-eight percent say the budget stalemate is the governor’s fault, just 6% blame legislative Republicans.  Another 32% say both the governor and the legislature are to blame for the lack of a state budget.

Business Climate

One year ago, for the first time since the Fall of 2004, more of the business owners/CEOs participating in the survey said that business conditions in Pennsylvania had gotten better (20%) during the preceding six months that felt it had gotten worse (19%).  By last Spring those number had slipped significantly into negative territory with 13% saying business conditions had improved and 33% saying the state’s business climate had gotten worse.  In the current (September 2015) survey, 42% say the business climate in Penn’s Woods got worse over the past six months, 6% say it has improved.

Optimism for improvement of the state’s business climate in the coming six months has faded since last Spring.  Only 6% expect business conditions to improve headed into the new year, down from the 12% who expressed optimism last Spring.  Those who expect the business climate to get worse rose from 44% in March to 49% in the September survey.

Employment levels are also slipping.  Fifteen percent of the owners/CEOs said they have increased the number of employees in their business over the past six months, 21% said they now employ fewer people.  Looking ahead, 14% plan to add employees in the coming six months, 16% expect to have fewer employees.

Sales are also down.  Twenty-eight percent of the businesses participating in the survey say their sales have decreased over the past six months, 27% say sales are up.  There is a bit of optimism for the future, however, as 25% project an increase in sale over the upcoming six months while 18% are bracing for a decrease.

State Issues

The ongoing state budget impasse remains a top issue. Governor Wolf has put the biggest proposed tax hike in the nation on the table, the Republican-controlled legislature refuses to go along. Owners/CEOs participating in the Fall 2015 Keystone Business Climate Survey are not willing to see a resolution of the budget stalemate at any cost. Ninety percent said they do not want a new state budget if it will result in a significant increase in their taxes.  Nine percent say they are willing to pay significantly higher taxes if it would result in an immediate budget resolution.

Education spending is one of the sticking points in the budget.  Governor Wolf is demanding significantly higher spending.  But the poll found business owners disagree with the need to spend more on K-12 public education.  Forty-four percent say the state already spends too much on public education and another 30% feel current spending levels are about right.  Twenty-two percent agree with the governor that too little money is spent on education.

There is strong agreement with the Republican legislative position that the public education pension system must be reformed before any increase in spending is approved. Eighty-seven percent see pension reform as a prerequisite to spending more on education, 10% disagree.

Looking at the budget generally, 69% agree that any resolution to the state budget impasse must include a plan to privatize Pennsylvania’s state-run liquor store system.  Twenty-two percent do not link liquor privatization to a budget resolution.

Asked which statement most closely describes Governor Tom Wolf’s budget proposal 45% said it is a significant increase in spending, 21% identified it as the biggest spending increase in state history and 15% correctly identified it as a tax and spending increase greater than that proposed by all 49 other states combined.  Two percent termed the budget a “modest increase” in state spending.

By some estimates Pennsylvania spends about $700 million a year on individual grants or tax breaks to certain companies or industries. Such grants are viewed by some as “economic development,” by others as “corporate welfare.”  Thirty-two percent of the business owners/CEOs said such grants should be eliminated entirely and taxes reduced on all businesses.  Eleven percent favor the elimination of such grants with the savings used to balance the state budget.  Forty percent would reduce, but not eliminate economic development grants, and 4% think more money should be spent on such projects.

Job Approval Ratings

Eighty-two percent disapprove of the job being done by Governor Wolf, up from the 70% who held a negative view of the governor in the March 2015 poll.  That number is the second highest disapproval rating for a governor in the 20-year history of the Keystone Business Climate Survey surpassed only by the 86% negative rating received by Governor Ed Rendell in September of 2009. The only elected official with a lower job approval rating that Governor Wolf is President Barack Obama. Eighty-eight percent of those participating have a negative view of the President’s job performance, 10% view him in a positive light.  U.S. Senator Pat Toomey received a 47% positive job approval against a 28% negative rating.  U.S. Senator Robert P. Casey, Jr. didn’t fare as well, 64% disapprove of the job the senior senator from Pennsylvania is doing, 15% approve.  The business leaders are also not pleased with the job being done by federal fiscal officials.  Forty-four percent disapprove of the job being done by Federal Reserve Board Chairman Janet Yellen, 21% approve.  U.S. Treasury Secretary Jack Lew is viewed negatively by 42%, while 11% approve of his job performance.

Pennsylvania Attorney General Kathleen Kane is under indictment for allegedly leaking secret grand jury information.  Sixty-eight percent disapprove of her performance in office, 8% approve.  However, 43% say she should not resign from office and is innocent until proven guilty.  Forty percent think she should resign and 10% want her to be impeached.

Legislative chambers continue to be viewed negatively by the business owners/CEOs.  Only ten percent have a positive opinion of the job being done by the United States Senate, 15% approve of the job being done by the U.S. House of Representatives.  The state legislature fared better: 31% approve of the job being done by the Pennsylvania Senate, the Pennsylvania House of Representatives earned a 34% job approval rating.

Presidential Race

Business community support for presidential candidates closely mirrored current nationwide polls. Donald Trump leads the pack at 26% followed by Dr. Ben Carson at 23%.  Carly Fiorina registered 7% followed by Ted Cruz at 7% and Scott Walker (who has since exited the race) at 6%.  The rest of the field, including all of the Democratic candidates, scored at 5% or less.

Methodology

The Fall 2015 Keystone Business Climate Survey was conducted electronically between September 14, 2015 and September 21, 2015.  A total of 324 business leaders responded.  Of those 80% are the owner of a business; 14% are the CEO/COO/CFO; 2% a local manager and 1% a state manager.   Twenty-nine percent of the respondents have businesses based in southeastern Pennsylvania, 21% in southcentral Pennsylvania, 17% in southwestern Pennsylvania, 9% in northwestern Pennsylvania, 7% in northeastern Pennsylvania, 5% in the Lehigh Valley, and 5% each in north central Pennsylvania and the Johnstown/Altoona area.  Complete numeric results of the poll are available at www.lincolninstitute.org.

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