Work in Progress

Member Group : Lincoln Institute

There has been a lot of buzz among politicos over Governor Tom Corbett’s low polling numbers. While the governor struggles among the general voting population, he fares better among the state’s job creators. Half of the business owners surveyed recently by the Lincoln Institute of Public Opinion Research give Corbett a positive job approval rating; that’s up ten percent since last September.

The governor’s political opponents have already gone on the attack claiming he is cutting public education while lavishing tax cuts on business. The first part of that attack is false: more state dollars than ever are flowing into K-12 education. As for tax cuts on business; the main cut in taxes has been to reduce the rate of the Capital Stock and Franchise Tax. This is an arcane tax that businesses pay in addition to their Corporate Net Income taxes. Pennsylvania is the only state in the nation that levies both. That costs the people of Pennsylvania jobs as businesses locate in other states to avoid double taxation.

What is actually happening is the Corbett Administration is seeking to redefine the playing field by adjusting tax and regulatory policies to make Pennsylvania more attractive to business. Unemployment in the state remains stubbornly high, and putting more Pennsylvanians back to work is a top priority. For that to happen, the state’s business climate must be made more competitive. We are not there yet as 35% of the business leaders surveyed said the economy in Penn’s Woods continues to get worse, while just 17% think it is getting better. In fact, nine percent of the businesses participating in the Lincoln Institute poll said over the past six months they have considered moving all or part of their operations to other states.

So it is clearly wrong to suggest that the Corbett Administrations has enriched business owners at the expense of school children – or anybody else for that matter. While business owners and CEOs report the state’s economy remains stagnant, they did voice strong support for the governor’s policies and his legislative agenda designed to get the economy back on track.

In particular, there is strong support for Governor Corbett’s approach to the state budget. While spending interests assail him for cuts or perceived cuts, the business community feels he could go further: 56% suggested state spending cuts should continue. Another 37% feel the current level of spending is appropriate, while just 4% think taxes and spending should be increased. Since the onset of the Great Recession in 2008 many businesses have had to cut spending, reduce the number of people they employ, delay expansion plans, and take other steps necessary to live within their means. They clearly expect state government to do the same.

As a side note, the so-called sequestration spending cuts at the federal level appear to have had virtually no effect on Pennsylvania businesses. Eighty percent say the cuts have had no impact on their operations, three percent report the cuts have actually had a positive effect on their business; just 12% said sequestration cuts have harmed their operations.

Support among the business owners and CEOs surveyed by the Lincoln Institute remains strong for other key components of the governor’s legislative agenda. Mirroring broad-based support in the general electorate, eighty-four percent approve of plans to privatize the state’s antiquated liquor store system. A majority also supports placing administrative operations of the Pennsylvania lottery into private hands.

A solid majority support lifting the cap on the Oil Company Franchise Tax to raise additional state revenue to improve roads and bridges, but that support virtually evaporates when the potential increase of 20 cents per gallon at the pump is factored into the discussion. Over 60% agree with Governor Corbett’s decision not to set up state-based Medicaid health care exchanges under provision of the Affordable Care Act, commonly known as Obamacare.

Results of the 2013 Keystone Business Climate Survey tell us that the Corbett Administration’s efforts at retooling the Pennsylvania economy remain a work very much in progress. National economic factors, such as concern over the growing national debt, continue to weigh heavily on business expansion thus retarding job creation. The business community understands – and generally supports – what the governor is trying to do to improve the state’s business climate.

What hasn’t happened is the retooling has yet to manifest itself in job growth so that the general voting public understands why these policies are aimed not at enriching a few powerful CEOs, but improving the economy so that small and mid-sized business can grow, hire more people, and improve the lives of millions of Pennsylvanians.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is [email protected].)

Complete numeric results of the poll can be found at [L][EL]

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