Counterpoint: Neither you nor accountants should fall for an anti-licensing agenda

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Things are about to get a lot harder for Minnesota CPAs and everyone who depends on them. Here’s why, and here’s why you should care.

Under the premise of attracting talent, Minnesota lawmakers are proposing to lower Minnesota’s CPA education standards. This would create a second-tier licensing standard that would make the Minnesota license the most opportunity-restrictive in the nation and potentially worsen its talent pipeline problems.

It’s not easy to become a licensed CPA, with good reason. CPAs underpin reliability and public trust in financial systems, safeguard our 401(k)s and pensions, and guide individuals and businesses through complex tax issues. This level of complexity and impact requires rigorous standards.

Those standards were thoughtfully developed by 55 states and territories, including Minnesota, to ensure requirements are substantially equivalent across the United States. This consistency safeguards the public and enables CPAs to practice in any state or territory with just one CPA license. Unfortunately, under this proposal, many Minnesota CPAs will no longer be equivalent to CPAs licensed in other states, costing them their ability to practice nationwide.

Minnesota CPAs and firms could face new compliance barriers, like having to petition each state for permission to practice and needing to secure multiple state licenses. This will cost time and money, limiting CPAs’ ability to serve clients and work on behalf of the public outside of Minnesota. Smaller firms will be hit particularly hard, as they often lack the staff and resources to manage these compliance burdens.

In a good-faith effort, the Minnesota Society of CPAs has proposed this legislation that attempts to help the profession address the pipeline shortage. The same cannot be said for the group’s opportunistic allies, who seize every chance to advance an extreme anti-licensing agenda (“Minnesota accountants stare down the guardians of their industry,” Opinion Exchange, March 9).

The Institute for Justice views the situation in Minnesota as an opportunity to land a blow on professional licensing, even if it means exposing the public to risks. In the institute’s absolutist free-market view, evident in its model legislation, a visit to a barber shop or beauty salon should be treated the same as a government audit.

Groups like the Institute for Justice have been working for years to tear down professional licensing and the consumer protection it affords, no matter the harm. Their core philosophy: All regulation is a burden and the solution should be no regulation at all.

Ironically, the anti-regulatory Institute for Justice is now championing a proposal that will add more bureaucracy, limit career growth and create new hurdles for CPAs. If this proposal succeeds, 54 other state and territorial boards would each decide if Minnesota CPAs are permitted to work in their state or territory, all because Minnesota will be out of line with the substantial equivalency model that was created through collaboration between the AICPA, state CPA societies, state licensing boards and NASBA (the organization that represents those boards nationally) — a model designed to prevent this exact problem.

What the Institute for Justice knowingly won’t accept is that the national CPA mobility system works. This is in sharp contrast to the Institute for Justice’s “universal licensing” efforts, which have universally failed. These efforts have created an unworkable mess of conflicting standards and arbitrary requirements, such as minimum residency rules.

State lawmakers should protect a licensing system that has long benefited and protected Minnesota residents and businesses who rely on CPAs. And they should reject an effort that would make our CPA talent pipeline issues worse, and erode the public trust, all in service of an extreme anti-regulation agenda.