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PAC protecting CPAs' interests in Maryland

By Bill Sheridan
MACPA Electronic Communications Manager

Imagine a world in which frivolous lawsuits are the norm. Imagine plaintiffs recovering money from defendants even though the plaintiffs may have contributed to their own injuries. Imagine CPAs spending nearly as much time defending themselves in court as they do conducting business.

Now imagine skyrocketing insurance premiums and anguished clients. These clients don't pay the court costs for CPAs but must shoulder the financial burden anyway, since CPAs are forced to counter their legal bills by raising prices on the services they provide.

And while we're imagining things, let's throw in sales and use taxes on those services.

It's not pretty, is it?

But that's what life as a Maryland CPA might be like without the CPA Committee on Political Action.

Now in its 22nd year, the influential committee is an integral part of the MACPA's political process. Contributions to the political action committee enable the profession to support Maryland legislators who share CPAs' views. In turn, those legislators help protect the profession's interests in Annapolis.

"The PAC enables us to gain access in Annapolis. With access, we get the ability to present our arguments," said Larry Kamanitz, head of the AICPA's Political Leadership Cabinet and a former MACPA president. "Even if you think (a legislator) might be opposed to your legislation on the surface, if you're dealing with an honest and intelligent person with an open mind, you may find that you can get a positive response."

Legislative success

The process works. With the help of its members, the PAC and a team of dedicated lobbyists, the MACPA has been able to defeat an almost annual effort by the state's trial lawyers to replace Maryland's system of determining a defendant's liability — called contributory negligence — with a comparative fault plan that would bring more lawsuits, clog the courts and increase the chances that an innocent party will be sued.

That effort died a quiet death this year, but lawyers are expected to revisit the issue with renewed vigor in 2003. The MACPA and its PAC undoubtedly will be ready to meet the challenge.

"I think our most significant accomplishments are not related to legislation that has passed, but rather to legislation that has not passed," said Dawson Grove, a former MACPA president and chair of the association's State Legislation Committee. "The trial lawyers give a tremendous amount of money in the legislature, and they feel very strongly that the comparative negligence rules will open up the state to more business for them.

"What we're saying is that it would mean a higher cost of doing business. The impact on the businesspeople of Maryland would be extremely negative."

And so the fight goes on. In addition to their opposition to comparative fault, the MACPA and its PAC have helped the profession earn a number of important legislative victories. Among them are:

• successful opposition to sales and use taxes on services;
• support for a bill that allows Maryland CPA firms to have non-CPAs as business partners, thus putting small firms on equal footing with larger firms that already allow non-CPA ownership;
• support for a bill that allows licensing boards to impose civil penalties for violations as a means of taking action against unlicensed accountants who perform services reserved only for licensed CPAs;
• an instrumental role in passing a bill that makes it easier for CPAs from other states to become licensed in Maryland. The bill changed the reciprocal license requirements from five years of full-time practice as a CPA to four years of practical work experience after passing the CPA Exam within the last 10 years.

Getting involved

One of the biggest factors in these victories has been the involvement of the MACPA's members, which comes as no surprise to David Rehr. During a CPA Day speech in January, the president of the small but powerful National Beer Wholesalers Association said the MACPA "could run the United States of America" if each of its 10,000 members became involved in the political process.

The association hasn't quite reached that point, but members who are involved — known as "key persons" — have a staggering impact in Annapolis. Thanks to the personal relationships they have cultivated with legislators, the MACPA's key persons are being personally consulted by lawmakers on issues that relate to the CPA profession. As a result, they have a direct impact on state legislation.

For many key persons, reaching that level of influence starts simply — with a contribution to the PAC.

"Contributing to the PAC is the first step, and it gives you the ability to go to the next step - establishing a relationship, so that you are the person a legislator contacts when he or she has a question about a bill or needs information about an industry," Kamanitz said. "Once you take that first step, it starts becoming a two-way relationship, and that's when great things happen."

The challenge now is convincing more people to take that first step. The price of protecting the profession is rising, and the PAC needs to the funds to keep pace.

"It seems like yesterday you could buy two tickets to a fund-raiser for $50 or $60. Now, the same two tickets will cost between $200 and $300," Grove said. "Our CPA members have to realize the importance of influencing the political process and be willing to contribute to our PAC beyond the dues check-off so we can meet the demands that we're seeing in Annapolis."

Without their help, that vision of life without the PAC might inch closer to reality.

"Without the PAC, I think our profession would risk losing prominence in the state," said Carol Kirwan, the MACPA's director of technical services and regulatory affairs. "I think we would lose our standing among members of the legislature who know who we are and how we feel on the issues. And because we would lose that, we would lose our ability to affect legislation here in Maryland."

And that's a frightening thought, indeed.

You can become an important part of the MACPA's legislative process simply by supporting the efforts of our political action committee. Send your contributions to:

CPA Committee on Political Action
P.O. Box 155
Lutherville, MD 21094

Due to Maryland campaign laws, we ask for individual contributions rather than firm checks. For more information on how you can become involved, contact Carol Kirwan, the MACPA's director of technical services and regulatory affairs, at (800) 782-2036 or carol@macpa.org.