Posts Tagged success

Business Climate Optimism Evaporates


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.

General Trends

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.

Methodology

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.

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Why is the Party of Free Enterprise Afraid of Competition?


An early, but unofficial, entry into the 2016 Presidential race by former Florida Governor Jeb Bush jump started the fight for the Republican presidential nomination.  National party leaders are working hard to see that it also ends early. This in the mistaken belief that a battle lasting deep into the primary season harmed Mitt Romney in 2012 and would likewise handicap the party’s 2016 nominee.

The theory is hold the intra-party skirmishing to a minimum, identify the nominee early, give the new standard bearer more time to organize and prepare for the General Election campaign.   The problem with that reasoning is that it cuts voters in most states out of the candidate selection process depriving the ultimate nominee of a solid base of support.  It also puts an early bullseye on the nominee giving Democrats more time to attack – which is precisely what Barack Obama did in the spring and early summer of 2012.

Those unwilling to admit the party nominated a deeply flawed candidate in 2012 point to the supposed “lengthy” primary battle as a reason for his defeat.  The fact is Mitt Romney essentially wrapped up the nomination by mid-April before primary voters in some of the more populous states, including Pennsylvania and California, went to the polls.  Four years earlier, John McCain closed the door on Romney and a large field of candidates by mid-February.  Despite the early end to that primary season McCain also went down to defeat.

There is an argument to be made that contests lasting deep into the primary season better prepares the candidate for the fall campaign.  In 2008 it was June before Hillary Clinton conceded defeat to Barack Obama.  Obama, of course, beat McCain who had the luxury of having wrapped up his nomination months earlier.  In 1980, Ronald Reagan and George H.W. Bush battled until late May before Bush ended his quest for the nomination.  In fact, Reagan lost many early primaries that year before finding his footing, emerging victorious and eventually defeating incumbent President Jimmy Carter in November.

The real reason the establishment wants to truncate the nomination race is so that it can exert more control over the ultimate nominee.  A shorter primary and caucus season makes it more difficult for a grassroots candidate to emerge and plays to the advantage of those with the party machinery behind them.  This, of course, makes it far less likely a candidate from the conservative wing of the party claims the nomination.

To push for such a scenario ignores the central lesson of the 2012 nomination process.  Voters four years ago made it abundantly clear they did not want Mitt Romney as their nominee.  Romney was not a front-runner until very late in the process.  As alternatives to Romney emerged his campaign destroyed them one by one in an electoral version of whack-a-mole.  Tim Pawlenty, Michelle Bachman, Herman Cain, Newt Gingrich, Rick Santorum, each surged to the top of the polls only to be destroyed by Romney.  Even after all of that, the movement of just a few thousand voters in the Michigan and Ohio primaries would have given the nomination to Santorum.

Voters wanted anybody but Romney, but the establishment prevailed, ended the contest halfway through the primary calendar and anointed a candidate who went on lose an eminently winnable general election.  The GOP lost the presidency in 2012 not because the primary season went on too long; it lost because it ignored the message being sent by voters.

Headed into 2016 the national GOP hopes to arrive at a nominee early in the year.  With a large field of highly qualified candidates that would be yet another big mistake.  It is important that voters all across America get the opportunity to participate in the process.  The goal should be to nominate a candidate who can win, not to nominate a candidate quickly.

(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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Why the Recovery Remains Sluggish


The last time more Pennsylvania business leaders felt the state’s economy was headed in the right direction George W. Bush was just weeks away from being elected to his second term of office.  The economy had largely recovered from the devastation of the September 11, 2001 terrorist attacks and the resulting economic slowdown.

It has been a downhill roller coaster ride ever since with employer confidence in the business climate hitting bottom in the spring of 2009 during the depths of the Great Recession.  Despite the happy talk coming from both Washington and Harrisburg, those who actually run businesses say the economy is still getting worse, not better.

Every spring and fall for the past 18 years the Lincoln Institute of Public Opinion Research has conducted the Keystone Business Climate Survey.  It has served as an accurate barometer of economic activity in the state.  The survey depends not on government statistics – which are often subject to “revisions” – but rather directly asks the owners and chief executive officers who run businesses of all sizes about the economic climate they are actually experiencing.

In the fall of 2004, 28% felt the business climate was improving, while 21% said it had gotten worse.  Fast forward to the spring of 2009 – the nadir of the Great Recession – and 76% said economic conditions had gotten worse in the preceding six months as opposed to just 4% who felt it had improved.  The latest survey, conducted in September, found just 15% of the business owners/CEOs saying Pennsylvania’s business climate had improved, with 41% saying it is has gotten worse.  Another 55% felt business conditions had remained about the same, but – since the barometer was already at a historic low point that is faint praise.

The “recovery” from the Great Recession has been going on for nearly five years making it one of the longest recoveries in history.  Why is it taking so long?  The simple answer is that a wide range of government economic policies and regulations make it nearly impossible to do so.  Nothing discourages business development and expansion more than uncertainty.  From health care to tax rates to rapidly expanding regulation, Washington has served up more uncertainty than the economy can digest.

Obamacare is the biggest culprit.  Seventy-eight percent of the CEO’s surveyed said they expect their health care costs to increase under provisions of the Affordable Care Act.  Obamacare is so solidly opposed by the business community that three-quarters said the law should be repealed. Prior to the start of the recent partial government shutdown 69% said congress should defund the Affordable Care Act even if a shutdown ensued, which it did.  Republicans, of course, caved in leaving Obamacare intact.  This survey was taken before the Obamacare enrollment period opened and the roll-out melted down under the weight of technical glitches.

Let’s not blame just the federal government for the dour mood of Pennsylvania’s employers and job creators.  State government comes in for its share of the blame.  The survey was taken just as legislators returned from a lengthy summer break having failed to take action on key agenda items including liquor privatization, transportation funding and dealing with the state’s pension crisis.

The Keystone Business Climate Survey last spring revealed 85% of the CEO’s supported privatizing the state’s liquor stores.  Sixty-nine percent opposed removing the oil franchise tax cap as advocated by Governor Tom Corbett and the Republican majority in the state senate.  The September poll found 59% would rather take money from other parts of the budget to fund transportation infrastructure improvements than raises taxes or fees.  There is also strong support among the business leaders for the state to move employees from a defined benefit to a defined contributions pension system.

Thus owners/CEOs find state government either not acting on key legislative items – such as liquor privatization and pensions – or acting in ways they don’t support as transportation funding.  Business leaders are also confronted with a Republican-controlled General Assembly and a Republican Governor who have failed to enact any labor power reforms.  This leaves the labor playing field heavily tilted against job creators.

Looking ahead, by a two-to-one margin those engaged in actually running a business in Penn’s Woods say they expect the state’s business climate to continue getting worse over the coming six months.  Given the inability of the national government to come to grips with debt and spending and the gridlock in Harrisburg there is ample reason to believe they are correct in their assessment.

(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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Conservatives Should Join Forces with ‘Big Labor’


By Jennifer Stefano

Right now, I really want to say “I told you so.” As a woman and a mother, I do feel it is my prerogative to, on occasion, wag my finger in the direction of a wayward soul and repeat that grating phrase with impunity.  But today I am going to harness my inner bossy pants and hope you will too. Instead, let us offer a hand of gracious solidarity to the Union Bosses.

Conservatives everywhere should unite and stand shoulder to shoulder with the stalwart champions of Barack Obama and the leftist Democratic machine. Those who not only gave millions to get Obama and the “D’s” elected and re-elected in 2008 and 2012 respectively, but parroted their every talking point when they were shoving Obamacare down the nation’s throat in 2010 – are now gagging on the not-so-affordable healthcare law and calling for a complete reform and full repeal of the disastrous law.

The United Food and Commercial Workers International Union, the Teamsters and the United Union of Roofers, Waterproofers and Allied Workers, the Hotel Workers Union, UNITE HERE as well as prominent Democrats like House Minority Whip Steny Hoyer and Montana Senator Max Baucus are all joining with us “crazy” Tea Party types to call for an end to Obamacare.

My obnoxious finger wagging aside, let’s take a moment to applaud these folks. The unions never break ranks – never. Not even during the 2012 election, when Barack Obama’s policies were and still are bankrupting the coal industry, would the miners union break from their endorsement of him as President. And yet, the unions are finally seeing what the rest of us saw all along – Obamacare is a bad deal for everyone.

There’s no question that Big Labor is often seen by freedom lovers everywhere as the mortal opposition of working families and taxpayers and often times of their own members. They are a big time special interest group who make backroom deals to benefit themselves and the politicians who bend to their will over the will of the taxpayers. And there is no doubt in my mind if the Big Labor bosses could fix Obamacare to help themselves and no one else, they would. However, that should not stop us liberty lovers from joining with the unions in total solidarity on Obamacare and welcoming them into our fold.

I understand the unions are not likely to be with us 98% of the time. But we must not lose this opportunity to join forces with them to get this law repealed. It is unlikely the unions will get a fix for themselves on Obamacare and leave the rest of us behind.

First, the 2700 page law is so expansive and so intrusive – remember it not only accounts for 1/6 of our economy but actually restructures the very relationship of the American Government and “we the people” there really is almost no way for any American to escape from it.

Second, the Democrats are on the ropes and under fire in a way that far outweighs Obamacare. The IRS, Benghazi, The AP scandals are all being tagged to Barack Obama and everything associated with him is turning toxic. Americans are fed up with special interests and cronies getting a leg up and with the new scandals and more outrageous abuses coming to light in each instance, Democrats can’t be seen helping one group of people, like Union Bosses, over the rest of America. Especially since unions compromise only about 10 percent of the electorate.

We need to come out swinging for the unions. They are absolutely right in their basic assessment: that Barack Obama’s promise that every American can “keep their healthcare” is not going to come true. One of the union bosses said the President’s statement is an “untruth.” In my world, we call that “a lie” but then again, I’m from Philadelphia and we generally believe subtly is for sissies.

So let’s stand in solidarity with the unions. They have an inside track to the Democrats and their leadership that conservative types do not. When conservatives say they want Obamacare repealed or there will be repercussions in 2014, the Democrats shrug. When the Union Bosses start saying it, publicly and loudly like they are now, the Democrats, shudder – and listen.

So tamp down your inner “told you so” and hold your nose if you must and hold your hand out in solidarity. The opposition of my opposition can be a very good friend.
The United Food and Commercial Workers International Union (UFCW) – a 1.3 million-member labor group that twice endorsed Obama for president – is very worried about how the reform law will affect its members’ healthcare plans.

Last month, the president of the United Union of Roofers, Waterproofers and Allied Workers released a statement calling “for repeal or complete reform of the Affordable Care Act.”

UNITE HERE, a prominent hotel workers’ union, and the International Brotherhood of Teamsters are also pushing for changes.

In a new op-ed published in The Hill, UFCW President Joe Hansen homed in on the president’s speech at the 2009 AFL-CIO convention. Obama at the time said union members could keep their insurance under the law, but Hansen writes “that the president’s statement to labor in 2009 is simply not true for millions of workers.”

Have you heard or read about the newest opponents to ObamaCare? If not, you might be surprised to learn that the latest folks to begin complaining about this massive, expensive and unnecessary take-over of our health care system is ….. drum roll please…BIG LABOR.

That’s right!

Persistent pals with the President and dutiful Democrat supporters like the United Food and Commercial Workers International Union, UNITE HERE, the Teamsters and the United Union of Roofers, Waterproofers and Allied Workers are suddenly not big fans of ObamaCare.

Let’s take a moment to applaud these folks for having the thoughtfulness to read the law, realize how they and our entire country will be negatively impacted by it in the form of increased taxes, increased health care costs and increased government and speak out.

Now it appears the Union bosses are hurting and it’s nothing Obamacare can cure. In fact, Obamacare is the cause. In a stunning break in the monolithic solidarity Obama and the Democrats have enjoyed from the unions, the rank and file are breaking from their Dear Leader and calling for the full repeal of Obamacare.

The only unfortunate part of this is their comments come 3 years too late!

You can learn more by following Jennifer on twitter @stefanospeaks or check out my organization at americansforproperity.org. Hear Jennifer’s commentaries on

Lincoln Radio Journal at www.lincolnradiojournal.com.

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

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