Business leaders in Pennsylvania overwhelming say the state’s economy is on the wrong track and most place the blame solidly on the policies of Governor Tom Wolf and his administration. That is the top line take away from the Fall 2020 Keystone Business Climate Survey conducted by the Lincoln Institute of Public Opinion Research, Inc.
The semi-annual Keystone Business Climate Survey seeks the opinion of business owners, Chief Executive Officers, and top managers on issues impacting the state’s business climate. The Lincoln Institute has been conducting the survey since 1994 and it has become a reliable barometer of the health of the state’s economy.
Two-thirds of the respondents said Pennsylvania’s economy is on the wrong track, 26% said it is on the right track. Sixty-four percent said the state’s business climate has gotten worse during the past six months, 19% said it has gotten better over the past six months.
Putting that into context six months ago the economy was largely shut-down during the height of the COVID-19 crisis. The Spring 2020 Keystone Business Climate Survey found only 2% had seen improving business conditions while a record 85% said the state’s economy had gotten worse in the preceding six months.
Optimism for the future is mixed, with 32% saying business conditions are likely to improve over the coming six months and 23% expect them to get worse. Twenty-two percent of the companies say they expect to see sales increase in the coming six months, 19% expect sales to decrease, and 53% expect sales to remain about the same.
The survey reflects significant dissatisfaction with the pace of the Wolf Administration’s re-opening of the state’s economy. Seventy-three percent said the pace has been “too slow,” 21% said it has been “about right,” and four percent said the governor has gone “too fast.”
In line with that there is significant support for the passage of a state constitutional amendment that would give the General Assembly the clear power to place limits on any emergency declaration issued by the governor. Seventy-three percent of the respondents to the Fall 2020 Keystone Business Climate Survey say they support such an amendment, with 52% indicating strong support; 23% oppose the measure.
The COVID-19 shut-down of so-called “non-essential” businesses resulted in a historic spike in the state’s unemployment rate. Thirty-four percent of those companies participating in the survey said they laid-off at least part of their work force, 12% laid-off all of their employees. Forty-nine percent reported having no lay-offs.
The additional weekly unemployment compensation benefits paid to those laid-off during the COVID-19 pandemic have had a varied impact on businesses. Thirty-six percent of the respondents said the payments hurt their business by making it harder to hire or re-hire employees. Thirteen percent said the payments helped their business by putting more money into customers’ pockets; and a third said the payments neither helped nor hurt their business.
A plurality, 44%, of the business owners/CEOs said the federal CARES Act and subsequent “stimulus” bills provided “about the right” amount of support, 27% thought there was not enough spending, and 21% said the federal government has spent too much. Fifty-five percent of the respondents received federal assistance to help them through the pandemic shut-down, six percent received state support, while another six percent received both federal and state support.
COVID-19 related lawsuits are a concern for 51% of the businesses with 48% indicating they have no such concerns. Eighty-four percent, however, voiced support for legislation that would specifically hold harmless businesses from COVID-19 related lawsuits.
Overall, those responding to the Fall 2020 Keystone Business Climate Survey give much higher marks to the federal government than they give to the state government for their handling of the COVID-19 pandemic. Seventy-six percent have a favorable view of President Trump’s handling of the crisis. Conversely, 77% hold an unfavorable view of Governor Tom Wolf’s job performance; 65% have a “very unfavorable” view.
The favorable view of the Trump Administration’s COVID-19 response carried through to Vice President Mike Pence with a 75% job approval rating; 60% hold a favorable view of the National Coronavirus Task Force. Congressional action or inaction related to the pandemic received a 71% negative rating.
At the state level, Health Secretary Dr. Rachel Levine was given a negative rating by 72% of the respondents. Of those holding a negative view of her job performance 61% expressed a “very unfavorable” view. Opinion on the job being done by the state legislature was mixed, with 47% offering a positive assessment and 47% disapproving.
Adding to concerns over the future of the state’s economy is the proposed Regional Greenhouse Gas Initiative (RGGI) which is essentially a carbon tax that the Wolf Administration is attempting to implement by regulatory fiat. By a 59-22% margin the business owners and CEOs said they oppose the implementation of RGGI. Opposition to a carbon tax in general increased to 68% of the respondents.
The Pennsylvania General Assembly in June passed a partial state budget and must now enact a budget for the balance of the fiscal year, December 2020 thru June 2021. Current budget figures project a multi-billion dollar deficit as revenue has taken a hit from the COVID-19 pandemic. Sixty-eight percent of the business owners/CEO say they want the budget to be balanced only through spending cuts, 3% favor tax hikes, and 25% support a combination of spending cuts and tax hikes.
With the November General Election rapidly approaching survey respondents have an unusually low level of confidence that the election process will proceed smoothly and free of fraud. Sixty-three percent said their confidence in the process is low, 25% have a medium level of confidence, and 11% have a high level of confidence.
Driving those numbers is strong opposition to the Pennsylvania Supreme Court’s ruling allowing the acceptance of mail-in ballots up to three days after Election Day. Seventy-Four percent disagree with that decision with 68% saying they strongly disagree. Twenty-six percent agree with the high court’s ruling.
Job Performance Ratings
Looking at the overall job performance of key national and state officials President Donald Trump received a 73% job approval rating from respondents to the Fall 2020 Keystone Business Climate Survey with 24% offering a negative assessment.
U.S. Senator Pat Toomey received a 43% positive rating, with 27% holding a negative view of his job performance. Sixty-three percent gave U.S. Senator Robert P. Casey, Jr. a negative rating with 13% holding a positive view. U.S. Treasury Secretary Steven Mnuchin received a 48% positive/18% negative rating while Federal Reserve Chairman Jerome Powell was viewed favorably by 44% of the respondents, negatively by 15%.
At the state level 75% hold a negative view of the overall job performance of Governor Tom Wolf with 20% having a favorable opinion. Attorney General Josh Shapiro posted a 16% positive/40% negative rating. Auditor General Eugene DePasquale was viewed favorably by 13% of the respondents, negatively by 34%. State Treasurer Joe Torsella received a 9% positive/30% negative rating.
For the first time the Fall 2020 Keystone Business Climate Survey included a job performance question on the Supreme Court of the United States and the Pennsylvania Supreme Court. The Pennsylvania Supreme Court is viewed negatively by 49% of the respondents, in a positive light by 20%. Conversely, the Supreme Court of the United States was given a 57% positive job approval rating, with 22% holding a negative view of the court.
The United States Senate scored the highest job approval rating among legislative bodies with a 51% positive/ 39% negative rating. Across the rotunda the United States House of Representatives received the highest negative rating at 77%; 14% hold a positive view of the House. At the state level, 39% hold a positive view of the job being done by the state Senate, 27% a negative view. The Pennsylvania House of Representatives received a 42% positive/ 35% negative rating.
The Fall 2020 Keystone Business Climate Survey was conducted electronically by the Lincoln Institute of Public Opinion Research, Inc. from October 6 through October 12, 2020. A total of 207 survey responses were completed. Of those surveyed, 74% are the owner of the business, 7% the CEO/COO/CFO, the balance are state and local managers.
Geographically survey responses were completed in all regions of the commonwealth. Twenty-four percent of the respondents are in southeastern Pennsylvania, 21% south-central Pennsylvania, 16% southwestern Pennsylvania, 11% from northeastern Pennsylvania, 10% hail from the northwest section of the state, 8% from north-central Pennsylvania, 6% from the Lehigh Valley and 6% from the Altoona-Johnstown region.