The importance of the CPA license within the business community should be well understood, but that is not the case. Recently, the CPA credential is among the licenses that have come under attack as part of a movement to deregulate professions whose jobs influence public safety. At the Sept. 19, 2019, PICPA Leadership Conference, CPA Conversations cohost Jim DeLuccia and I spoke with Skip Braziel, vice president of state regulation and legislation for the AICPA, and discussed this movement and what Pennsylvania CPAs can do to halt its momentum.

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By: Bill Hayes, Pennsylvania CPA Journal Managing Editor

Podcast Transcript

For accounting professionals, it may be easy to take the CPA designation for granted. However, in proposed legislation that has been introduced in states across the country, the CPA license has come under attack and is facing the threat of deregulation. To talk about why this prospect would be bad for the accounting industry and what is being done to protect the CPA profession, I joined my colleague, Jim DeLuccia, at the PICPA Leadership Conference to talk to Skip Braziel, vice president of state regulation and legislation for the AICPA.

[PICPA President Marty Levin] Our guest here is Skip Braziel. Skip is from the American Institute of CPAs. Actually, now we call ourselves something else, Skip, right?

[Braziel] The American Institute of CPAs, that's it.

[Levin] We still go by it?

[Braziel] Yeah, yeah.

[Levin] I always get confused, because with the merger with CGMA, things sort of got changed. But anyway, either way, we welcome Skip here today. He's AICPA's vice president of state regulatory and legislative affairs, responsible for building strong collaborative relationships with internal and external stakeholders for state legislative and regulatory issues. Cutting through all that, he's the guy that knows what's going on regulatory and statute wise. So again, please give a warm welcome to Skip, Bill, and Jim.

[Braziel] Thank you.

[CPA Conversations cohost Bill Hayes] Thank you so much, Marty. I wanted to thank you for that great introduction there. I also want to thank Meg back there for these wonderful chairs. They're very comfy and very imposing as well. I feel like I'm the mother of three fully grown dragons sitting in these chairs. They're wonderful chairs. But just again, thanks so much, Jim. We have our matching suits on. I hope you're doing well today and ready to go.

[CPA Conversations cohost Jim DeLuccia] Yeah, I am. We didn't even coordinate on this either.

[Hayes] Absolutely. It's a mind meld at this point that we do this sort of stuff. Skip, thanks so much for being here with us. It's a great topic, so we want to make sure that we get into it right away. We've got 30 minutes. And as we've said going into it, we know it’s just going to fly by.

[Braziel] All right. Well, thank you for having me. Appreciate it.

[Hayes] Absolutely. So in the lead up to our discussion today, we've promoted it as a talk about the CPA license and why it must be protected from deregulation. Can you give us a little bit of a background about the effort to deregulate professional licenses?

[Braziel] Yeah, thanks for your question. And again, it's great to be here. Good morning to everyone. In a lot of ways, it's historical that the issue speaks to who we are as a country, as Americans. It’s about the appropriate role of government and how the government is supposed to engage in our lives. It's also about how will they protect us, the health, safety, and welfare of the country.

And is licensing the most appropriate way to do that? So, the country ebbs and flows throughout the last several hundred years on where exactly we decide as a country that the government should fit. But for the most part, we landed in a consensus that for those professions that have high risk, high impact to the public, that's where we want to have the strongest regulatory scheme we have. Even so much so that the government can actually tell someone they can't do a particular job because they haven't proven themselves to be competent. What happened though over several decades is that idea of protecting the public by licensing expanded, right? Instead of just having lawyers and doctors and CPAs and architects and engineers licensed, you start having other occupations. Pick your favorite occupation.

To a point where now people are wondering is there too much regulation? Are there too many barriers to entry for people to get jobs? You start to see this push, particularly from the right side of the political spectrum, at least at the beginning, questioning the role of government. And we ended up getting to a point where now we actually have a discussion along the political spectrum questioning, again, is licensing necessary? When is it necessary? I think it's a thoughtful question to ask. I think it's important for all of us to be engaged in this conversation, to talk about why it's important perhaps for certain professions to be licensed. Maybe it's an open question as to whether or not other occupations need to be, but that's how we got to this place. Again, it's really about the appropriate role of government. What are we going to do and how much government are we going to allow into the lives, to make the sort of decisions, particularly around how we're going to work.

[Hayes] Just to be clear, this isn't something that's focused directly on the CPA itself, but other industries as well?

[Braziel] Yeah, we're not in the crosshairs. It's not about us specifically, but we get drawn into the discussion because a lot of the solutions are so broadly written that it brings in the license. That's how we got engaged. I think at first blush you hear about a solution that would allow anybody to perform any service, whether or not they're licensed or not, so long as the consumer allows that. You wouldn't think that, well, they certainly are not talking about CPAs or certainly not talking about engineers or architects. But when you read the proposal, it doesn't have any exemptions for these really highly technical professions that I just called out. If you're not out of the bill, you're in the bill. That's why we've had to engage.

[DeLuccia] Skip, you did a nice job of laying out a little bit of the timeline there of regulation in general. And I was hoping you could drill down to what you can tell us about the groups that are really driving this right now. I know you mentioned about barriers to entry, but what are some of the things that they are trying to accomplish here with this deregulation?

[Braziel] I think I'll go back to this idea that it's not a partisan issue anymore, which is really unusual for the days and times that we're living in. To think of an issue where folks on the political left and political right can agree. The example I always like to talk about is a few years ago there was an issue about hair braiding and they were passing a hair braider law. And it was 2016 in Illinois.

At that time, the governor was a Republican and the legislature was run by Democrats. They could not agree on a budget. Now obviously, it's constitutionally mandated to have a budget. Illinois is literally going down in flames. The ratings agencies are calling the governor's office, saying "Hey, you guys have to pass a budget. You haven't passed the budget in two years."

They couldn't. But they could pass this bill on occupational licensing. Both sides can come together. I think that speaks to the power of the issue, where you can have groups on the left, like the Brookings Institute or the National Employment Law Project, ally themselves with groups like the American Legislative Exchange Council or Americans for Prosperity. They talk about the issue differently. From the right and from the libertarian standpoint, you'll hear a lot of talk about individual freedom in markets. You hear a lot of that kind of economic theory talk. And from the left you hear more about barriers to entry. You hear a lot about underserved communities not being able to get jobs.

The point is they're all concerned and they all mesh at the same point and it becomes very powerful and it creates a powerful narrative. And I think one of the things that these groups have done extremely well is personalize the story. It's very difficult to tell a story about how licensing protects the public when we are always talking about it in such antiseptic terms.

What these groups have done is really personalize these stories. They have personal stories. They will pick a person, a middle-aged person, an African-American female working in the lower Delta in Mississippi and she's trying to climb up the economic ladder. She's trying to practice her craft of African hair braiding. They'll tell the story of how the state is going to try and make that person get a cosmetology license and it costs thousands of dollars. And then, the cosmetology license process doesn't even teach hair braiding. When you tell stories like that, it's very evocative and it's challenging. So, the challenge is on us to start telling our story in a better way, in a more evocative way, but it's always going to be difficult because at the end of the day, talking about arcane statutes and regs and laws, we probably will never get to a point where we have those kinds of personalized stories, but we're trying.

[DeLuccia] I know a little bit later in our conversation here, we're going to talk about how CPAs can get involved in this fight. And I was talking to a CPA Conversations guest recently about the power of stories and getting people to understand concepts. So, I definitely can appreciate that sentiment. Is this really a new push here? And if not, what's driving this momentum in the last few years?

[Braziel] As I mentioned, the history of the topic goes back literally to the founding of the country. But what really has given it this big momentum, this big push as you referred to it, is a Supreme Court case that came down a few years ago where we had a board quite frankly that was acting really badly. It was a dental board in North Carolina. They were trying to restrict non-dentists from performing teeth-whitening services. But teeth-whitening services were not in the practice act. But that didn't stop them from sending out cease-and-desist orders. So, they got sued. And instead of finding a graceful exit, they pushed it all the way to the Supreme Court and found out they didn't have the immunity they thought they would have. And so, that really did a couple things.

First, it put everyone who volunteers their time on state boards on notice. Be careful, be aware, be afraid maybe, because you could find yourself in a lawsuit for antitrust violations. But it also gave the side that had been talking about challenging the idea of licensing the space to inject all this work that you've been doing, literally for decades. And they found this opportunity to use this as a leverage point to say, "See states, we told you that these boards don't care about public interest; they care about their private interests. We need to talk about how do we get them out of our lives." And all of a sudden you could almost like ... when I talk about this subject and I have slides, I go from 2016 to the present, and you can see how the map changes colors where more and more states introducing more and more of these solutions to get rid of licensing. Or if not get rid of licensing, to take away authority from the boards. So, I pinpoint that particular case as the leverage point where it really gave a lot of oxygen to the idea.

[Hayes] I wish I had some reading glasses right now because I'm going to read the card a little bit here and the reading glasses would make me look a little bit smarter. But in 2019 anti-regulatory bills have been filed in West Virginia, Arizona, California, Colorado, Indiana, Michigan, and a bunch of other states straight down the line there. So, there's about 13 states there that have these anti-regulatory bills. Nothing's come up in Pennsylvania so far. Should Pennsylvania CPAs expect that it will anytime soon?

[Braziel] So for Pennsylvania, you did have a bill, a reciprocity bill. Make it easier for people to get a reciprocal license. And I think this actually is a good point to talk about the legislative strategy for the anti-licensing crowd. They actually sought to try to, if you're familiar with basketball, fill the zone. They have lots of different approaches, lots of different bills. Some are worse than others, but they all get at eroding or eliminating either board authority or licensing altogether. So, what we've tried to do is try to establish some discipline around how we review these bills because there's so many, you can't attack all of them. We really have tried to learn to prioritize those bills that go immediately and directly after licensing. Again, referencing the consumer choice bill I did a little earlier, those are the kinds of bills that we're going to have to oppose, full stop.

There's no way to make those bills better. The reciprocity bill's a little different. I think we can talk conceptually about reciprocity. I think, actually, CPA's have the best story to tell because we have such a great mobility scheme built on substantial equivalency and the uniformity that goes along with that. I think there's a lot of space for us to engage policymakers and have a really thoughtful debate about that. I'm not as concerned about those types of bills. But Pennsylvania had one and passed it and a Democratic governor signed it, back to my bipartisan angle on this. But I think the important thing to keep in mind is the strategy is twofold. It's not simply to pass the bills, but it's a marketing strategy as well because a lot of the bills will be entitled, like, the Right to Work Act or the Freedom in America Act or something. Something very American like that.

Just by doing that, just by introducing these bills, they're changing the narrative and they're changing the environment in which we're all working in. It's very difficult to go into a policymaker's office and say I don't want to be for the American Right to Work Act. It's a really difficult position to be in, because you have to start explaining that reality before you even get into some of the nuances of the bill. And if you're explaining, you're probably losing the argument, right? That's sort of where we are in terms of 2019.

In Pennsylvania, you had that one bill. I wouldn't be surprised to see other bills follow it. Since that bill was successful, they may try something a little more extreme the next time.

So it’s dependent on Mike and Peter to keep their eyes on the prize and keep us aware of what's happening. But I fully anticipate more of these reciprocity bills across the country since it was successful here in Pennsylvania and successful in Arizona and South Dakota. I fully believe that we will probably see 10 or 12 if not more states, particularly going into an election year. Because again, this is sort of an economic development argument that a governor can make and they're always looking for those good arguments to make.

[Hayes] You mentioned there the need to oppose these bills and it takes us to the idea of what CPAs need to do to stop these bills. And if CPAs don't take action on this, what can happen? What's the worst-case scenario that we're looking at?

[Braziel] Well, again, the worst-case scenario, I'll go back to this bill. I know people have a difficult time trying to grasp this concept, but there was a bill. It was introduced in West Virginia, Indiana, and Missouri, where it literally ... someone could perform test services without a license, as long as the person you're performing the services gave you the okay to do that. That's what the bill said. That's about as threatening and as dangerous as it gets.

So, I would say what we're trying to get CPAs to do is tell their story. Talk about the work you do, talk about the institutions you support with your work. Engage with your state societies. I mean, you're all here now because you're leaders in the state society. Continue that leadership, bring others with you. We are here to help, but the best advocate for your story is you. So, I would encourage all of you to talk with Mike and talk with Peter. When they need help and they call out for help, answer that call.

[DeLuccia] Skip, you gave what seems like a little bit of a harrowing example there of what could happen if this actually passes for the profession, but what could this possibly look like for the public? How could that possibly affect them and how can that be worked into the CPA narrative as well as they get their voices heard on this issue?

[Braziel] Excellent point. I think we have to continually remind people that we're here not only for ourselves, but to provide a public service. A lot of the concerns that we have or some of the unintended consequences for some of these bills, a lot of the emphasis and a lot of the attention that this discussion has is around how do we get more people into the workplace? How do we get more people into the job market? And that's great. I can certainly understand that desire. What they don't seem to focus on as much is, what happens after they get the job? How do you ensure that the people are not just competent at the front end but remain competent?

My concern is, if there is so much attention about lowering barriers and possibly lowering standards, what impact does that have downstream? Because oftentimes, you will erode not only capital resources but human resources. There's fewer people, less money, paying attention to the jobs where it's most needed, to ensure people are doing their continuing education or they're holding out their CPA in the right way. Some of the more mundane but important activities that a board does, it could easily fall in the gap because we're so focused on what's happening at that beginning of a person's career.

[DeLuccia] I learned recently that the AICPA and the National Association of State Boards of Accountancy, or NASBA, as I'm sure we all are more familiar with referencing them, they just created an Alliance for Responsible Professional Licensing. Which I guess they're known from an acronym as ARPL. What can you tell me about that group? What are their goals?

[Braziel] So ARPL, as we refer to it, I didn't come up with the name so don't shoot me, but we are a coalition of eight national organizations representing five highly technical professions: CPAs, architects, landscape architects, engineers, and surveyors. The idea, again, is we see an environment where, in these proposals, we're all getting tarred with the same brush. All the solutions are one size fits all. And we're trying to tell our story that, while we appreciate the fact that legislators have finite time to review infinite bills, it's important to get this right.

When you're thinking about us, you think about the professions that we represent. We are building and designing and maintaining the places and spaces where we all kind of eat, meet, and greet one another. The professionals that we represent are not only responsible for the physical integrity of these buildings, but also the fiscal integrity of these building. So, we can sit in this room and not worry about the ceiling caving in. That's what we're talking about.

So, when they're looking at solutions that would erode the oversight that's necessary to ensure that the public remains safe, that they need to think about that. And so, what we're trying to do with ARPL is create better storytellers, create better stories, engage with our state partners, and provide them the tools that they need when they're having this heavy lift. What ARPL is not is a lobbying organization. We are not going to be flying into states and going into state capitals uninvited. But what we are going to do is work very closely with our state partners.

All the national groups represented have either affiliates or partners on the ground. And one of the things I failed to mention that's unique about the coalition is that half the members represent associations and the other half represents the state boards. So, we were able to go and talk not only from a perspective from the association, but also from a real public service, real public protection perspective as well. And we're really excited about it. We rolled out in July.

We have a three-phase rollout, started with perhaps you saw the website that came out in July and some of the trade press around that. We're now moving into a phase where we're going and talking to policymakers directly. It's the conference season. So, I've been doing the conference circuit a little bit. Then eventually, you'll start seeing with some of the data that we'll have produced hopefully by the end of the fall, some mentions in state and national media. The idea, again, is that we need to be better storytellers and we need you guys to help us with that. Part of our strategy is to actually engage the professionals that are in these professions, so they can tell their own stories and then we can help amplify that message.

[DeLuccia] That's good.

[Hayes] We've actually gotten the a high sign from Meg back there, which I think means that we've got an extra half-hour to go. You gave us an extra half-hour. All right, so we'll keep ... no, it means five minutes left here. If anybody has any questions from the audience, we'd love to take them. Right now we've got a mic in the middle of the room here. Whoever can run to it first wins and gets to ask the first question. So, feel free. If we don't have a question, we actually have a few more that we could ask ourselves and that would allow me to take a bite out of the ARPL. Part of ARPL's mandate is to ...

[Braziel] That's pretty good. I've never heard that.

[Hayes] I just learned of ARPL here, so I'm going to take credit for that. Part of ARPL’s mandate is to inject its perspective into media coverage as you said. How can that be accomplished? What are we looking at doing there?

[Braziel] So, a lot of this relationship building, as with any relationship, we have to go out and meet folks where they are. And that's social. That's traditional media. Again, right now our idea was let's talk to our friends and family first. So, that's why we went to the trade press of each individual profession. Get ourselves out there. But I think the real value that ARPL can bring is really getting that message amplified in the state papers and in the national papers. One of the things I talk about is I'm a great admirer of the work from a tactician’s point of view of what the anti-licensing coalitions have been able to do. If you look at their legislative strategy, how it's tied to their media strategy, how it's tied to their coalition strategy.

What we're doing at ARPL, we're not reinventing the wheel. We're trying to do what they've done. And one of the ways that you can tell their level of success is you can go to almost any state and open up the predominant newspaper in that state and see a story about anti-licensing or see a story about how somebody was deprived of an opportunity because of licensing. We need to be able to get our story or at least our side of the story injected into those same media outlets. That's what we're trying to do. It's a heavy lift, but we have to do it. We cannot continue in this environment that's so one-sided without bringing some balance to the store.

[Question from audience] I know we're talking about the anti-licensing at the state level, but what are regulators saying, like the SEC and the stock market regulators?

[Braziel] To the extent they're aware of it, not much. I think, again, because it's not solely focused on the CPA community, it hasn't been a focus of their attention. The few times that I have talked to some federal regulators about it, they’re like, "Oh, that's an interesting idea, but we prefer that you not do that." And like, well, I'm glad. Can we count on your support? Probably not, but they liked the fact that CPAs are licensed.

I will say though, in the current administration, and this is bipartisan, so it was in the previous administration as well, there is support for this idea of lowering barriers and lowering regulatory oversight. It's a challenge to get support from the federal level when you have individuals at very senior levels, like the former secretary of Department of Labor himself and his staff, pushing a bill that would have created temporary licenses in five Western states, which by an initial blush, like what's the big deal?

Well, for us, because of our scheme and mobility, we were very concerned about how they plan on implementing that solution. We were concerned about it eroding the substantial equivalency that we built across all 50 states. We can't depend on the federal regulators to support us or help us in this cause. And, quite frankly, we are a state-licensed profession. I think we want to remain a state-licensed profession. So, the real effort needs to remain at the state level.

[Levin] Skip, first, thanks for making the trip here. Really appreciate your time. When I first saw ARPL and the component associations and organizations that were a part of it, I was wondering where's the medical profession in all this? Where's the legal profession? Those are pretty loud voices we don't seem to be hearing from and this really impacts those folks, so I'm not quite understanding where they're at in the middle of all of this.

[Braziel] I just got this question yesterday. There has not been a time that I've presented on this issue that I have not gotten this very question. There's some substantive reasons why they're not and some political reasons. I'll start with the substantive reasons first.

Oftentimes, the bills that we see only engage state boards that report up through the executive branch of government. At least for our fellow professionals in the legal community, they get their license through the judicial branch, so they're just naturally carved out. So from a political standpoint, in those rare instances where policymakers start out wanting to carve people out, they typically carve the doctors out first.

They don't see the risk in the same way. So, not every bill is that way. There are a lot of bills. Again, that Consumer Choice bill I started with, everybody was in until they started carving out a few people and of course the first ones they carved out were the doctors. And then, the other political element you need to keep in mind is that most ... probably the largest profession represented in state legislatures are attorneys. They're never going to do anything that's going to jeopardize their license. They just don't see the risk in the same way that we do. While we are currently comprised of five professions, I could certainly see invitations going out to those other professions that they would like to join us. But that hasn't been the case thus far.

[Question from audience] Just in terms of a takeaway in terms of for CPAs. So, I think maybe it’s in the tax space where this can be most relevant. Certain states, California and Oregon for example, have had state-level regulation limiting who can prepare tax returns and the arguments of, like, “We don't want people being defrauded” go into this. And what do you think Pennsylvania, as CPAs, what we should be doing in terms of whether we should be advocating for more restrictions around those types of services and how we can get involved?

[Braziel] Wow, tough question. Let me say this: generally speaking now is not the time to look for more restrictions around jobs. I think that's going to be a very tough ... regardless of the merits of that particular issue, I just think politically it's going to be a very difficult lift, that the momentum is going in the other direction. I would focus whatever limited political capital you have on preserving your license. That would be where my emphasis would be.