Firm leaders chime in on legislative priorities, economic outlook
Managing partners at Maryland’s CPA firms remain largely in sync with the MACPA’s legislative agenda and seem generally optimistic about the economic direction of both the state and the nation.
Those messages highlighted the latest of the MACPA’s managing partner updates, held quarterly to keep partners apprised of the issues that are impacting the profession and gather their opinions on some of those issues.
A significant portion of the most recent update centered on the MACPA’s legislative agenda for the 2017 General Assembly session. MACPA Executive Director Tom Hood outlined the issues the association has been following recently, then asked the managing partners which of those issues worry them the most.
Among the issues the association is monitoring, partners say the top priority in Maryland should be to block any attempts to implement a sales tax on professional services.
With good reason, it turns out: A number of states are considering such a tax as a way to increase revenue, and “once that happens, other states tend to follow suit,” Hood said.
The MACPA would oppose any attempt in Annapolis to put such a tax in place.
Rounding out the managing partners’ top five legislative priorities are:
- Opposing attempts to block non-disclosure / non-compete bills: Legislation that would have made certain non-compete and non-disclosure clauses null and void have been introduced in years past, only to die in committee. The MACPA believes eliminating such clauses would put Maryland businesses at a disadvantage to competitors in surrounding states, and the association will continue to oppose such legislation.
- Supporting efforts to enact CPA firm licensing mobility: The MACPA supports efforts to amend Maryland’s accountancy law to allow CPA firms to operate across state lines without unnecessary paperwork or complicated compliance costs that don’t serve the public interest. Seventeen other states already have passed such legislation, and the momentum is building.
- Stopping efforts to implement a “comparative fault" structure for determining liability: Trial lawyers frequently try to replace Maryland’s current “contributory negligence” system of determining a defendant’s liability with a system that makes recovery against a defendant easier – even when the person bringing the lawsuit substantially contributed to his own injuries. That “would increase liability as well as the number of lawsuits if it’s passed,” Hood said. “We want to stop that.”
- Monitoring legislation to enact mandatory paid sick leave: While admirable in their good intentions, past efforts to enact mandatory paid sick leave would have resulted in burdensome compliance costs and other unintended consequences for Maryland businesses. The MACPA will continue to monitor such legislation to make sure it doesn’t place undue hardship and administrative burdens on small and mid-size employers.
Among other issues on the MACPA’s legislative radar screen, the association will continue to try to convince lawmakers to change Maryland’s appeal bond law to add a $5 million cap on such bonds for small businesses. In 2015 the MACPA helped pass a $100 million cap on appeal bonds for large businesses, but the small-business cap was stripped from the final version of that bill.
The MACPA’s legislative work is more important than ever because, as futurist Daniel Burrus predicted, regulation and legislation are increasingly impacting the profession in alarming ways. Take 2016 as an example: Maryland legislators introduced 2,832 bills during the most recent General Assembly session, a 26 percent increase from the previous year. Of those:
- 373 were business-related bills, an increase of 116 percent;
- 37 were bills that directly impacted CPAs, an increase of 50 percent; and
- 14 were tort-liability bills, an increase of 20 percent.
Next year’s General Assembly session should be no different, so CPAs should plan to join the MACPA at the 2017 edition of CPA in Annapolis. The more CPAs who are there, the louder our profession’s legislative voice becomes.
Economic optimism Managing partners also say they are largely optimistic about the economy in Maryland and across the United States. A large majority of those polled said they are either “somewhat optimistic” or “very optimistic” about the prospects for growth, and on a scale of 1 to 5 (with 1 being “very pessimistic” and 5 being “very optimistic,”) the group scored a cumulative 3.63.
The partners also expressed some concern over the expanding role technology is playing in the profession. Automation, artificial intelligence, and KPMG’s use of IBM Watson’s cognitive-learning technology are shots across the bow of the profession’s core transactional services.
The partners agreed, however, that technological advances also offer significant opportunities — particularly for firms that focus on recruiting the right talent, helping their employees develop marketable skills, and finding ways to move beyond the core by offering their clients more value-added insights.
In fact, that’s exactly what today’s top young accounting minds want. Hood summarized the findings from this year’s AICPA E.D.G.E. Conference, where young professionals identified the 10 things they want most from their leaders. Among them:
- More focus on career development.
- Engage us in your vision and purpose.
- More leadership development.
- More collaboration.
- Greater focus on the future.
In other words, said Hood, “all the things that make firms more sustainable and create a brighter future for the firms.”
Read Hood’s complete recap from AICPA E.D.G.E. here.