Malaise: Business Owners Turn Deeply Negative
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.
One year ago, for the first time since the Fall of 2004, more of the business owners/CEO 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.
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/CEO 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 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.
Look 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.
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.
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 [L=lincolninstitute.org/article.php?id=9204]www.lincolninstitute.org[EL].