One-in-five certified public accountants (CPAs) across Ohio are predicting a significant number of Ohio employers will eliminate health-care benefits for their employees in 2006. Sixty-seven percent of participants responding to The Ohio Society of CPAs 2005 Statewide Ohio Business Poll estimate that health insurance costs would rise between 10 and 20 percent in 2006 causing employers to explore new ways of controlling health-care costs.
“Ohio CPAs have a keen insight into the financial issues facing Ohioans today,” Ohio Society Executive Board Chair, Janice L. Culver, CPA, of KeyBank and McDonald Financial Group of Cleveland, Ohio, said in a statement announcing the results. “As trusted advisers, CPAs interact with many business owners and other professionals every day, so we are in an ideal position to feel the pulse of our marketplace and economy.”
Along with the growing health-care crisis, Ohio’s economy and business climate continue to be top concerns among the state’s CPAs. The economy was a top concern for more than half of those surveyed. This is down 10 percent from the previous year, when 61 percent of respondent’s listed the economy as their top concern. Twenty-six percent of Ohio CPAs expect the economy to improve in 2006. Another 26 percent expect the economy to weaken. Forty-seven percent expect the economy to maintain the current status quo.
According to participants the top deterrents to Ohio’s economic growth are:
- Rising fuel prices (73 percent)
- Health-care costs (72 percent)
- Government regulations (58 percent)
- Outsourcing (50 percent)
- Undereducated workforce (49 percent)
“In today’s information age, people are demanding an immediate and accurate flow of information on what shapes their lives, such as the business climate and the economy,” Culver said. “By conducting the Statewide Business Poll, the Ohio Society of CPAs is responding to this need for where Ohio’s economy is heading in 2006.”
Although 62 percent of those surveyed labeled Ohio’s current business climate as fair, 47 percent also said the business climate was declining. Seventeen percent felt the existing business climate was poor. Fifteen percent of participants felt the business climate was improving, however, 39 percent felt it was staying the same. Although 28 percent of CPAs think less will be spent on capital investments in 2006, 56 percent believe the level of investment will remain the same. Only 16 percent predict capital expenditures will increase next year.
When it comes to jobs, half the CPAs surveyed predict little change in job expansion. Thirty percent expect there to be fewer jobs in 2006, while 21 percent predict more jobs. Three-fourths of those responding predict small pay increases, between 1 and 3 percent, for Ohio workers. One-in-five estimate the raises will range between 4 and 6 percent.
Compliance with Section 404 of the Sarbanes-Oxley Act (SOX) is one of the most critical issues affecting public companies today, according to the survey results. Three-fourths of Ohio CPAs responding believe SOX is inhibiting private companies from going public and 28 percent reported that a “significant number” of Ohio companies were affected. For public companies, 72 percent of participants report the costs outweigh the benefits of Section 404 compliance. This is true to a “great extent” according to 29 percent of those surveyed.