Lowman S. Henry
Chairman

Robert W. Keibler
Vice Chairman

Jane R. Gordon
Secretary/Treasurer

Board Members

Jerry Bowyer
Allegheny Institute

James Canova
Canova Electric

LeGree S. Daniels
U.S. Postal Governor

Joseph Geiger
PA Assoc. of Non
Profit Organizations

Hilary Holste
PPG Industries

Charles L. Huston, III
Huston Foundation

Doris O'Donnell
Allegheny Foundation

Albert Paschall
King of Prussia
Chamber of Commerce

James Trammell
Sun Company, Inc.

__________

Survey Consultant
Albert E. Sindlinger
Sindlinger & Company

Focus Group Moderator
Charles L. Kennedy
Penn State University
__________

FOR RELEASE
WEDNESDAY  May 3, 2000
FOR MORE INFORMATION
CONTACT: LOWMAN HENRY

LHENRY@LINCOLNINSTITUTE.ORG


PA Business Leaders Favor State Spending Cuts

But, Overall They Support Ridge Budget Priorities

     Harrisburg (PA) – A strong economy has left Pennsylvania’s state treasury overflowing with tax dollars.  But, the Lincoln Institute’s Spring 2000 Keystone Business Climate Survey found that the state’s major employers agree with a group of conservative lawmakers who say the time has come to put the brakes on spending.

     The Commonwealth Caucus, a group of House members and one Senator, have called upon the Ridge Administration to curtail spending and pass a no spending increase budget for the 2000 – 2001 fiscal year.  While top corporate executives participating in the Lincoln Institute survey have a generally positive view (55%) of Governor Ridge’s proposed budget, they also feel the time has come to get spending under control.

     Fifty-eight percent of the chief executive officers surveyed said they think is very important for the Commonwealth of Pennsylvania to begin cutting spending.  Another 35% said spending cuts are a somewhat important step that needs to be taken.  Only 7% of those responding felt cutting spending was an unimportant policy option at this time.

     Overall, corporate leaders are highly supportive of Governor Ridge’s proposed budget priorities. In particular, 60% felt a continuation of the manufacturer’s exemption to the Capital Stock and Franchise Tax was vitally important.  Another 24% felt continuation of the exemption was somewhat important.  Just 5% rated continuation of the manufacturer’s exemption to be an unimportant policy consideration while 11% offered no opinion.

     Corporate leaders also feel the proposed phase-out of the Capital Stock and Franchise Tax over a ten-year period is too long.  Eighty percent hold that view while 15% think ten years is about the right amount of time. Two percent think the phase out should take longer.

     Eighty-two percent of the business chieftains surveyed said there should be further reductions in Pennsylvania’s Corporate Net Income (CNI) tax.  Another 14% thought the tax currently is set at about the right rate.


Business Climate Attitudes Holding Steady

     Pennsylvania’s major employers continued to report solid sales growth, while their views on the health of the state’s business climate remain about the same as they were during last fall’s Keystone Business Climate Survey.

     Twenty-six percent say they think business conditions in Pennsylvania are better than they were six months ago, while 68% say business conditions have remained relatively the same.  Only 5% said they thought business conditions had worsened during the past six months.

     Looking ahead, corporate leaders are predicting more of the same.  Sixty-one percent say they expect business conditions to remain relatively the same as they are now, 17% say they expect business conditions to get better. But, an unusually high 20% say they expect business conditions to be worse six months from now than they are currently.

     Employment levels at Pennsylvania’s biggest employers have largely remained the same (47%) or improved (39%) over the past six months.  Fourteen percent reported employment levels have dropped since last September.  CEOs predict they will keep employment levels relatively the same (53%) over the coming six months.  Thirty-eight percent plan to add to their payrolls, while 9% expect their employee compliment to drop.

     A majority of Pennsylvania big businesses, 54%, say their sales increased over the past six months.  An additional 30% said sale levels remained constant, while 14% reported lower sales.  Looking ahead six months, 58% predict increased sales, 36% say they expect their sales to remain the same, 6% are forecasting a decrease in sales.   

Popularity Ratings

      Federal Reserve Board Chairman Alan Greenspan and Governor Tom Ridge continue to be the most popular public officials among the ranks of Pennsylvania’s big business leaders.  Greenspan’s positive job approval rating stood at 86% in the Spring 2000 survey, down from 94% last Fall.  Governor Ridge was given a positive approval rating by 84% of the CEOs, down just 1% from the Fall 1999 survey.

     U.S. Senator Rick Santorum received a 63% positive job approval rating from the corporate leaders.  His counterpart, U.S. Senator Arlen Specter received only a 35% positive rating, less than the 39% who said they have a negative view of his job performance.  Another 26% offered no opinion on Senator Specter.

     Once again, President Bill Clinton received the lowest approval rating.  Only 19% said they have a positive view of the job being done by the President.  Still, that is up from the 10% who gave him a positive rating last Fall.  Seventy-five percent said they disapprove of the President’s job performance.

     Among legislative bodies, the Pennsylvania House of Representatives received the highest positive rating.  Forty-seven percent of the CEOs said the Pennsylvania House is doing a good job compared to the 39% who hold a negative view of that chamber.  Forty-five percent say the Pennsylvania Senate is doing a good job, while 32% hold a negative view of the Senate’s performance.

    
Neither of the two federal chambers received positive ratings higher than their negative ratings.  Thirty-seven percent said the U.S. Senate is doing a good job, but 47% hold a negative view of that chamber.  The U.S. House of Representatives got a positive rating from 37% of the CEOs, while 47% said the lower chamber is not doing a good job. 

Methodology

     The Lincoln Institute’s Spring 2000 Keystone Business Climate Survey was mailed on March 10, 2000 to a random sample of 4,000 Pennsylvania businesses employing 100 or more individuals within the Commonwealth.  A total of 203 responses were received by the March 31, 2000 reply deadline.  Complete numeric results of the survey can be found on the Lincoln Institutes web site at www.lincolninstitute.org.  The Lincoln Institute is a Harrisburg-based non-profit educational foundation.



     The Lincoln Institute Of Public Opinion Research is a non-profit educational foundation with offices in Harrisburg and Valley Forge Pennsylvania.

 

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