Dave Cain: Welcome to unsuitable on Rea Radio, the award-winning financial services and business advisory podcast that challenges your old school business practices and their traditional business suit culture. Our guests are industry professionals and experts who will challenge you to think beyond the suit and tie, while offering you meaningful and modern solutions to help enhance your company’s growth.
I’m your Host, Dave Cain. Here at Rea, we believe it’s our responsibility to be an advocate for our state’s small to mid-size businesses. To that end, one of the most important relationship our team members and Rea have invested in over the years is with the Ohio Society of CPAs. Working with this spectacular organization not only gives us access to a litany of valuable resources, which help to keep our team at the top of its game, we are given the chance to be an advocate in favor of our clients with regard to current and future legislation.
Today we are fortunate enough to have Scott Wiley, President and CEO of the Ohio Society of CPAs back on our podcast to discuss the current legislative and regulatory agenda and climate, while gaining some insight into some upcoming efforts. Welcome back to unsuitable, Scott.
Scott Wiley: Thanks for having me, Dave. It’s great to be back.
Dave: Appreciate it. One of the things I just want to kind of start out, talk about the profession, the CPA profession, and accounting. This time of year, we always get questions from graduates, “How’s the job market in the CPA business?”
Scott: So it’s a hot market right now. What we find here in Ohio, is that the accounting degree, but specifically the CPA credential is in demand. We expect it will be for some time. It’s nationally the eighth highest in demand program right now. What we hear from CPA firms, CPA leaders, corporate officers working in the industry is, they can’t find enough great talent fast enough to meet their demands and meet their needs. So it’s an ideal time. At the same time, the challenges associated with that are employers are working to make sure they can keep the talent they have.
But also, how do we identify the talent we’re going to need given the future of where our firm, our company is going, and more importantly, where we think our clients’ future is going to be? And that’s causing firm leaders to have to really grapple with, “How do we invest today with a focus on the future?” So it’s an interesting time right now. What we see happening right now in the profession is, it’s an ideal time to be considering this profession for a career. It’s a message we’re taking, not just to colleges, universities, but increasingly in the high school around the state.
Dave: So the honor society can be a valuable resource for all businesses, no matter whether you’re in the public accounting, government, industry, the Ohio Society can help maybe match up some resumes.
Scott: Yeah, we do that. So we have almost 10,000 students that we’re in contact with through our student membership on an annual basis. Just about 7,500 of those are college students, and we have just under 2,000 of those in high schools around the state. So to give you some example, we’ve already had six events in high schools this year, where we’ve reached 1,200 students, talking to them about what it means to be a CPA today. We’ve got to make sure we’re changing the narrative out there. If there’s an accounting course, and that’s a big if, inside of a high school in Ohio today, chances are it’s taught by one of two people. The PE teacher or the Home Ec teacher.
While the PE teacher and Home Ec teacher have a lot to share, they’re probably not giving you the most global perspective about what a CPA does today. And too often, guidance counselors really, when they think of a CPA, they think of, “Oh, they do my taxes.” So particularly this time of year, we’re in the midst of tax season. They may have interacted with their CPA. And not that taxes are wrong or right, but there’s a more global perspective.
We want to talk about the full scale of what an auditor does, what the opportunities there are. How is technology transforming the work that firms and CPAs are doing? We want folks to understand where those opportunities will be. And more importantly, why this profession has such a robust opportunity is because it truly helps advance business. Accounting is the language of business. But what we like to say is, “CPAs are really advancing the state of business.”
Both how business moves and how it works is a little less, but here in Ohio, it’s the biggest. The capital, the state of business. So a lot is happening right now. Particularly, here in the Columbus Metro area, but all around our state. It’s a great time for students to be considering this as a career.
Dave: I’ve heard you speak many times across the state, and it’s very encouraging to me, as a long-term member of the Ohio Society, that you particular carry the banner, and the Ohio Society recognizes that talent is one of the biggest issues in the profession today. And you guys are making it happen.
Scott: Well, what we find is we did a survey at the end of last year. In 2017, CPAs both in firms and companies, identified attracting and retaining top talent as their second biggest challenge. That’s up from the number four spot, just three years earlier. So this issue isn’t going away. What we also find, a lot of times, folks think we’re talking about just college students. And particularly, when I think about our public accounting market here in Ohio, what we’re hearing is that manager level spot. That four to eight year’s worth of experience, that’s really hot right now.
We know that firms are being pretty aggressive in terms of how they attract that talent. What they’re doing to keep it, but also, how they’re looking in the market for it. So this is not just a kid’s going to college, kid’s going to high school right now. That’s important that we have that conversation, but it’s increasingly at the talent level, something that inside of firms, and I know Rea & Associates is doing this. We’re putting more of a focus on what are we doing to develop and acquire talent? And how are we trying to make sure we’re investing in succession? Not just at the leadership level, but at the future leadership level.
Dave: One of the things that as I listen to you speak, and look at your points for today, the Ohio Society is an advocate for good business within the State of Ohio. It’s just not the CPA business, but what your organization, our organization does is help to create a positive business climate. Everything you guys do, and I know you’re working on several items, legislative items. What’s hot on the press now?
Scott: Well, Dave, we like to say at OSCPA, “We exist to advance the state of business.” And I talked about the littlest and the biggest. But there’s a lot happening in our state right now. Let me give you and your listeners an update on some of the critical items we’re working on. Yeah, certainly the one that’s getting the most attention right now given timing, is what’s happening related to municipal tax reform. Certainly this is an area where we have been focused over the last decade, if not more. And we recently saw some major wins for the business community.
Especially in the most recent legislative year related to the option that was created for centralized filing of net profit taxes. Again, I use the word option. Not a mandate, but an option that was created to allow businesses to choose that as a form of filing their net profit taxes. We worked very closely with the Department of Taxation, at the behalf of our members to enact and implement what we think are really important changes.
But many people know, saw the news, read in the paper, that a number of Ohio cities, more than a 130 to be exact, recently sued to the state to try to overturn the municipal tax reforms. And many of these are the reforms we actually were working on when I first came to Ohio five years ago, and actually had signed into law in December of 2014, in House Bill Five. Now those changes went into effect January 1 of ’16, more than two years ago. Then we had some additional improvements that were passed in the most recent budget year, House Bill 49 on June 30th of 2017.
The nexus of this lawsuit, cities were trying to get both a temporary and a permanent stay to have this legislation thrown out. So we’re pleased to report that the Franklin County Court of Common Pleas upheld the law changes, and actually threw the case out altogether. Saying, “That the legislature, what they did was clearly Constitutional.” I’m more pleased to share, back in October when this lawsuit was filed, and certainly your team here will know this. The deadline for folks to opt-in was March 1.
Around that time, there was about a 100 or fewer businesses that had actually signed into the business gateway. Through an effort we did, outreach to our members, a marketing PR campaign, by the March 1 deadline, we had nearly 2,500 Ohio businesses, who choose to opt-in in this pilot year. And so while there’s clearly room to grow that, we think that’s a great first step. And certainly the uncertainty that the lawsuit was creating, and I will tell you, that was by design. That that was intended to try to disrupt the business community from moving with this option. But we feel really positive about that.
When you look at the totality of this, this has the impact of saving business in Ohio. It’s projected nearly a billion dollars, by choosing that option if they so choose. So that’s a billion dollars, that those primarily small businesses and medium-sized businesses could reinvest back in their company. Could increase their employees’ wages. Could choose to grow and expand their business, versus spending it on what we identify is increasingly burdensome administrative fees.
Dave: Right.
Scott: And you know this. And often, I will hear from legislators, and the sidelines, “Scott, I can’t believe that CPAs are actually advocating for this. Aren’t they going to lose money?” And what I tell them every time is, “You have to understand, our people have a reputation as being trusted for a reason. We want to help our clients. We want to help the companies we work with be successful. And if we can do that, then there’s going to be opportunities to work with them in new ways, so don’t worry that it’s going to hurt firm’s bottom lines, or CPA’s bottom line. It’s worry about how we’re going to grow and advance business in our state, because that’s what CPAs do and care about every day.”
Dave: You bring up a good point. We’re all on the same team. And the goal is, we want Ohio to be very, very competitive when it comes time to expansion, and firms coming to the state, we want a very fair taxing system. I know the Ohio Society has led the charge behind that, to go through the municipal tax reform.
Scott: Yeah, and one of the things I saw just earlier this week. Site Selection magazine just came out with their rankings. Texas beat out Ohio again, but we’re identified as number two place for business to look and grow, and develop their business. We’ve clearly made some significant strides if you look, quite frankly, over the last five to eight years. But one of the things we consistently hear on this community tax piece is, this is the thing that many people, and count me as one of them, move here, and get surprised with.
That’s kind of embarrassing to admit. I’m coming to work for the Ohio Society of CPAs, and the first time we move into our house, we’re six months in and we get this letter from … So, of course, I remember going to the board at the time, wondering what the heck this was. But it’s problematic and I think we’ve made some great strides. But there’s clearly further room for improvement. And then I think about the other issues we’re working on and it’s really exciting right now.
Dave: Sure. Let’s talk a little bit about change of leadership within the State of Ohio and at the government level. Obviously, we’re in for a very interesting few months with upcoming elections for new governor. What does the … I know the Ohio Society doesn’t really take a position on certain issues. But how does the Society respond in an election year?
Scott: Yeah, so it’s important for me to articulate, and it’s very cliché, but we have to be at the table as a profession, as a business community, talking about the things that matter to us. Explaining why they matter. And more importantly, talking about the impact it can have here in Ohio, for citizens, for companies, for growth, for opportunity, for the economy. If we’re not at the table doing that, then there’s a high likelihood we will be on the menu.
Case in point, we have been at the table three of the last four years talking about a proposed sales tax on professional services. Now we have been able to help dissuade that idea and explain why. It’s not just that it’s bad for our business, it’s bad for taxing, tax preparation, and management consulting, and financial planning, and a whole range of other services. But this is the impact it’s going to have on businesses in our state. This is what it’s going to mean for part of our population that is talented, but also high wage earners, that contribute back to their communities when that work gets moved to a bordering state, we don’t want that. So it’s important we’re at the table.
But as it relates to what we see happening here in 2018, the political environment. It’s clearly a hot one. If we look just at the state level for a moment, the Ohio Society of CPAs has for some time been very active in this environment. Not only do we advocate on issues, and not only do we go up and build relationships, and one of the traditional things that many associations do have a political action committee, and provide funding to candidates who are running for reelection or seeking office, that align with our policies. But one of the things we do, we’re actually the only professional accounting association in the entire country of any state, all across the country, who actually endorse candidates for office.
Now we won’t start that at the statewide level until the primaries are over. We may actually get involved in some of the primaries for the state legislative races, based on your track record, if we’ve endorsed you in the past four years. But as I look particularly at the gubernatorial race right now. So we won’t get involved in that until the primaries are over in May.
On the Republican side, obviously, we’ve got the Attorney General, Mike DeWine, and he has formed a ticket with the Secretary of State, John Husted. Both of whom we’ve endorsed in their most recent races, have incredible relationship with. They’re perceived by the media, by polling data, as really far out front in terms of fundraising and in terms of where they are in the polls.
Mary Taylor, who’s the Lieutenant Governor currently, is a CPA and a member of our organization. She and her running mate, Nathan Estrich, they’re pulling behind right now. But I think it’s important for folks to remember as they look at this, right now these candidates are running to win a primary. They are not running to win a general election. And while those of us read in the paper might think, “Well, gosh. Why are they doing this? How are they going to win the general?”
Right now, they’ve got to get to the first race, and the first race is, in this example, the Republican primary. And the Republican primary traditionally skews towards a more conservative voter. What we see right now happening is some of the conversation is really skewing towards that. The same can be said on the Democratic side. Right now you see Richard Cordray, who just left his role at the Consumer Financial Protection Board, former statewide office holder here in Ohio, who we have a great relationship with when he was here, running with Betty Sutton on a ticket.
Many people believe that’s where most of the, a lot of the, not most. But a lot of the energy is right now. So to say they’re the front runners on the D side would be a fair statement. Then you also have a couple other candidates. Former Congressman Dennis Kucinich is in the race, and then the Senate Minority Leader, Joe Schiavoni from the Northeast Ohio area. So a lot of activity right now. It will be interesting to see where the conversation plays. What I suspect will happen is the field will … . We will start to see some of the nationalization of this race.
We’ve got a U S Senate race with Sherrod Brown and Congressman Jim Renacci is the lead Republican, also a member of our organization. And then there’s other candidates in the mix. We’ll start to see that. Traditionally, two years after a presidential election, many believe that that race favors the party not in the White House, just historically. So that would suggest that that could help the Democrats at the federal level. Well, we’ve got other statewide races, so what that means for Democratic turnout in Ohio remains to be seen.
But either way, what I want our members to know and what I want business leaders around the state to know is, the issues we care about are not really of a Republican or a Democratic bend. They’re of a good public policy. OSCPA, we care about, “How do we make sound public policy, that ensures we have a more efficient government, that we ensure we’re not creating burdensome regulation that holds business back from being able to invest in itself?”
We’re really focused on uniformity. “How are we making sure we’ve got laws on the books, and regulations, that are allowing businesses, particularly small and medium-sized to be able to deploy their resources the best way possible, and not have to worry about I’ve got to do this in this municipality, this in that municipality, and then I’ve got to go over here at the state and do 17 different things?” We often hear from members and business leaders, calling us with, “Hey, did you know this is going on? Can you help with this?” We’re more than happy to do that. We’re probably are on the phone to ODT two or three times a week.
A great example of that, we actually heard from CPAs who work with PEOs. There was an issue that the Department of Taxation was saying in the middle of 2017, they wouldn’t allow PEOs, Professional Employer Organizations, to qualify to use the BID, the Business Income Tax Deduction, that had been enacted into law. So we were able to get that fixed. And the impact on business owners last year was $2 million.
The broader issue was, they were trying to make that a retroactive … .The bigger savings was about $10 million. Now we heard about that from one of our firms, who work with PEOs, so this isn’t much about, “How can we help firms work with their clients,” but also, “How can we do something that’s smart for the business community?”
Dave: So, really again, it’s just several examples of being a voice, a strong voice for good business. Let’s really dig deep into this legislative, one of the legislative issues. What is the Ohio Society doing to save the crew?
Scott: You know, I’ve got two kids, and this is very important to them because they both play soccer. We’re not involved in the save the crew movement. But I would tell you, one of the things I observe, getting more involved here in the Columbus Metro area, is that it just adds to the vibrancy of our community, right.
I think it’s important for us as both certainly here in the Columbus Metro area, but now increasingly our state. We’ve now put the owner of the team, PCV, on notice that we have a law on the books. I think they call it the Model Act, it was put in place in 1996. Certainly, all those Browns fans listening in today know it all too well.
Dave: I’m one of them.
Scott: Yeah, so-
Dave: I hate to admit that, but I’m there.
Scott: Well, we’re not actively engaged. One of the things I think that’s important is, this is another place where you see state government trying to make sure it’s doing its part to protect taxpayers. My own personal opinion on that is, it will be interesting to see what happens and what unholy alliances come out of the woodworks, because I’ve got to think that professional sports leagues en mass are going to take a look at this.
Because clearly, the perception that they’ve been able to work over one city, by using another city as leverage, has played into this. If Ohio is successful here, I think that will probably encourage other state legislatures to take a look at this. So I would expect that major sports leagues are probably having some back channel conversations right now.
Dave: Sure, sure. Our guest today has been Scott Wiley, President and CEO of the Ohio Society of CPAs. Thanks again for joining us on unsuitable today, Scott.
Scott: It’s great to be here.
Dave: You’ve proven the fact that the Ohio Society is a powerful, and I mean powerful ally to businesses in the State of Ohio. So to our listeners, if you have an issue that you need addressed, here’s another roadmap to get information. Contact your CPA, contact the Ohio Society directly, and there will be information forthcoming. Rea & Associates has worked with the Ohio Society for many years, and I can attest that they are very, very business-friendly, and can reach out and help with the cause. So appreciate that again, Scott. We are proud to be part of your organization. Thank you for everything you do for our profession, and to help to advance the state of business, here in Ohio.
Listeners, we hope you enjoyed today’s episode. If you want to learn more about the Ohio Society of CPAs, they have a great website at OhioCPA.com. And speaking of websites, be sure to check out ours at ReaCPA.com. On it, you’ll find blogs, articles, past podcasts, even one with Scott, financial tools, and more, all designed to help you maximize your organization’s growth.
We’re also on YouTube, just in case listening to our sultry voices isn’t enough, and you need to get a closer look at what goes on behind the mic each week, take a look. Thanks for listening. Until next time, I’m Dave Cain, encouraging you to loosen up your tie and think outside the box.
Disclaimer: The views expressed on unsuitable on Rea Radio are our own, and do not necessarily reflect the views of Rea & Associates. The podcast is for informational and educational purposes only, and is not intended to replace the professional advice you would receive elsewhere. Consult with a trusted advisor about your unique situation, so they can expertly guide you to the best solution for your specific circumstance.