If the federal budget deficit is the most pressing problem facing the United States, as indicated in an Arthur Anderson & Co. survey of small business, what is the best way to reduce the deficit?
Some 69 percent of Utah small business chief executive officers surveyed believe the best way is to reduce government spending while 30 percent believe it should be reduced by a combination of less government spending and tax increases. Only a miniscule number believe the best way is by increased taxes alone.These facts were presented by company officials Tuesday to the Board of Governors of the Salt Lake Area Chamber of Commerce.
Porter J. Hall, director of Arthur Anderson's Utah Enterprise Group, which serves emerging and owner-managed business, said, "The views of these owner-managers warrant attention and should help shape a small business agenda for the President-elect Bush and Gov. Norm Bangerter administrations and the direction of their economic policies."
But Hall had some bad news for Lt. Gov. W. Val Oveson, who attended the meeting and along with Bangerter narrowly won re-election Nov. 8, when he said 88 percent of those small business owners surveyed in Utah believe state government doesn't provide enough support for small business.
In a short report to the board, Oveson said the main emphasis of Bangerter's second term will be job creation and small business development, education, natural resources and water development.
Kent M. Bowman, Utah small business coordinator for Arthur Anderson, said the company received 430 replies from small businesses in Utah, which were among the 21,000 replies received nationally. He said small business is a important segment of the national economy and especially important in Utah because 80 percent of the state's work force is employed in small business.
Higher corporate taxes are likely, the survey shows, under the new administration (Bush)," said Hall. "Emerging and owner-managed businesses appear to see taxes as both a concern and a reality. To reduce our deficit, most small businesses prefer a reduction in spending by cutting defense spending, welfare and foreign aid, " he said.
While the majority of Utah's small business owners listed the budget deficit as the most pressing problem facing the United States, Hall said some consider tax rates, domestic programs, foreign policy and defense spending as the most crucial issues.
One section of the survey dealt with how the small business owners perceive the economic outlook for 1989 and how things went in 1988 for their companies. "Contrary to some analysts' predictions that the current economic expansion may come to a close, small business expects an optimistic future," said Hall.
He said the previous surveys have proved to be amazingly accurate because of the number of responses received.
Hall said 60 percent of the Utah companies responding said they increased sales in 1988, but that figure was below the 71 percent nationwide. Some 66 percent of the companies met or exceeded 1987's profitability (71 percent nationally) and 70 percent expect to increase their sales in 1989.
Some 39 percent of the Utah companies in the survey increased the number of employees this year, 21 percent decreased their staffs and the remainder kept their employment level steady, Hall said.
In the employment outlook for 1989, Hall said 47 percent expect to increase the number of employees and only 9 percent expect a decrease. During 1988, employee compensation increased in 71 percent of the companies surveyed, and 75 percent expect increases next year.