Taking a break from CPA exam stats because we're all sick of them at this point, let's talk about one of the biggest accounting events of the year: the Maryland Association of CPAs' annual CPA Day.
I had the pleasure of attending my first CPA Day last year just a few months after I moved to the DC metro. Though I cursed life as I stumbled out to my car in the pre-dawn darkness for the 45 minute drive to Annapolis, I quickly forgot how exhausted I was as soon as Tom Hood started speaking. You might think I'm a complete nerd for this (and that's fine) but this is the kind of event that you walk out of feeling like you could change the entire world just with the wave of your hand. I'm not being overdramatic.
This year's CPA Day started out like they all do… CPAs from all around Maryland (yes, even Garrett County) start shuffling into the historic Governor Calvert House at 7:30am for breakfast and a primer by MACPA leadership on this year's issues. This year boasted 200 attendees, far surpassing last year's record-breaking attendance. Some have been attending CPA Day for years while others are there for the first time. Sorted into districts, attendees are given informational packets elaborating on the MACPA position to give their legislators and caught up on how the previous year's efforts turned out (MACPA was 5 for 5 on their top issues). Maryland Delegate Brian Feldman – a CPA who started his career at PwC DC – joined the group for a quick chat on major legislative issues impacting professionals in the state and performed a pretty amazing role play with Al that was not all that much different from the conversation I saw them have last year (except probably a bit funnier). And then, after a quick picture in front of the State House, the CPAs were unleashed on Maryland legislators.
There were only two key issues this year, which either means MACPA is doing its job really well or legislators aren't doing theirs well enough:
Sales tax on services This one is big. It's failed miserably in both Florida and Michigan and would be a disaster in an area like Maryland where many CPAs and other professionals are licensed in several states. Taxing services in Maryland is not only nearly impossible to enforce but hostile toward business in the state, and will only serve to drive more good, hard-working, tax-paying businesses to Virginia. This is the last thing Maryland needs right now, as it can already be considered "business-hostile" due to unfriendly tax policies (that's the polite way to say it) and unclear rules on starting and running a business in the state. As a person who counts on a Maryland business I work for to pay my bills when I'm not trolling on this website, this is the last thing I want to see even considered.
Tort reform This one is also big as it could come with disastrous consequences in the form of higher insurance premimums and liability for those only tangentially liable in a lawsuit. Tom Hood explained it best in the morning when he told the story of the idiot who got McDonald's coffee from the drive thru, put it between her legs, burned herself horribly and sued McDonald's to the tune of $1 million. Potentially under proposed changes to current law, that same idiot could sue the crap out of not only McDonald's but the cup maker, the coffee bean picker… you get it. The issue with this is that many CPAs carry large liability policies due to the nature of their business, so if 10 people up the chain are sued for something that is hardly their fault but in which they were involved, whose insurance company is going to be hit with the big payout?
The majority of our time with legislators was spent with Delegate Cathy Vitale, a spunky Republican out of Anne Arundel County. She was immediately receptive and accommodated 9 or so Maryland CPAs and their annoying blogger companion in her tiny office facing the busy Annapolis circle. One MACPA member in our group expressed his concern with the sales tax on services issue, stating many of his clients are serving our country in Afghanistan, making the taxation of the service all that much more complicated. Vitale agreed wholeheartedly with the MACPA position, saying an idea like sales tax on services set the state up for non-compliance by its very nature. When asked what CPAs could do for her, Vitale asked them to keep their ear to the ground, proving once again how important these connections are both for the legislators and the participants. It's more than just trolling the State House with packets and pre-prepared notes, it's about putting a name to a face and forging a genuine connection with this person who Maryland voters have entrusted with their law-making.
Back at the Calvert House, we were joined by Maryland Comptroller Peter Franchot. Now, I know the guy is gunning for governor so maybe he thought the CPAs would get behind him but I have to say, he made a lot of sense for what could be classified as a pretty far left politician in this overwhelmingly democratic state. Cathy Vitale actually told a story earlier in the day of a conversation she'd had with Franchot about Maryland's budget where he said "if we'd just take the time to collect what we're owed on the books, we'd be fine." Now this may seem crazy to some of you rabid liberals out there but what it suggests is that raising taxes is NOT the best way for Maryland to make money. I know, wild idea. Franchot spoke about the budget, wasteful spending (like 30 new Steinway pianos for Bowie State University – "why not get 2 Steinways and 28 Yahamas?" he asked) and about making Maryland the kind of place business owners and millionaires want to call home. As is, the state has a long way to go before that happens and that's a big part of the reason why 200 CPAs showed up to Annapolis at the crack of dawn to have their voices heard by those who make the rules.
Just about the time that I was wishing I hadn't had so much to drink the night before so I could come up with a question, one MACPA member asked him about Maryland's AAA rating and whether that was in jeopardy. Franchot didn't skip a beat when he stated "well, we've shown we have an insatiable desire to raise revenues," meaning Maryland will never run out of money. But as he previously pointed out, you can only tax people so much before they get fed up and take off for greener pastures. I know this because it's a huge reason why I left California (9.5% sales tax). "I don't anticipate our AAA bond rating being downgraded," he said. And he should know, he's practically collecting the taxes himself by visiting hundreds of business owners around the state to check in and gather their thoughts on the state's economy.
Making sure I maximized my time, I spent lunch with Sharon Gubinsky of Rockville's Santos, Postal & Co. When legislators arrived to join the group for lunch, we noticed Sharon's district was missing a delegate who they'd invited to lunch. No sooner did I tell her she'd been dissed than freshman Delegate Sam Arora showed up to chat us up on the Maryland economy and, more importantly, the Maryland budget that had been released that day which looked like two huge phonebooks (visualize Sam making actual phonebook size motions with his hands here). And he was right, I saw the beast. Imagine four FAR textbooks hot-glued together.
I left with the sense that MACPA had been given a new mission by both Delegate Feldman and Comptroller Franchot: they've done a lot up until this point but maybe it's time to do more. Delegate Arora expressed that he would love to get state CPAs' thoughts on the new budget, specifically line items that could be eliminated, and was sure that many of his fellow delegates would feel the same. The great part about CPAs doing this is that they are trustworthy, impartial and knowledgeable. Of course MACPA initiatives protect the interests of CPAs in the state but CPAs' interests are almost always directly in line with those of their clients and the communities they serve.
The momentum is building and now is the time to act. Maryland legislators need impartial input to create effective legislation and CPAs in the state need to know they have the support of their legislators. It's definitely a win-win, and if you're a Maryland Association of CPAs member who hasn't yet come out for CPA Day, this non-CPA, former-Marylander highly recommends trying it just once. You might find you actually like it and you couldn't hang out with a better bunch of professionals.