A First Quarter 2014 Update

“The only person who likes change is a wet baby.” – Mark Twain

Dear Colleague,

As you may know, I send a quarterly update to a small group of industry professionals offering an informal review of happenings over the most recent quarter and giving some highlights of what’s to come. If you or a colleague would like to be included in the quarterly email, send me a note to paulb@ppai.org and I will get you on the distribution list.

It’s About Protecting And Growing Our Industry
Next week, nearly 70 industry members and I will head to Washington, D.C., to advocate for the power of promotional products among end buyers (advertisers and marketers) and the general public. All of us will share our stories with members of Congress and their staffs during Legislative Education and Action Day (L.E.A.D.). These meetings—more than 250 in all—are designed to ensure that representatives for every U.S. state hear those stories.

Don’t feel left out that you are not making the trip—we have a simple way for you to participate without even leaving your desk. Please join us in reaching out to senators and representatives by participating in the L.E.A.D. virtual fly-in; send an email to your member of Congress in support of the industry–click here to connect with Capitol Hill.

During the week I will also be meeting with staff and counsel from the Direct Marketing Association, The Advertising Coalition, American Advertising Federation and the American Apparel & Footwear Association. We share common issues and opportunities with each of these organizations, ranging from import regulations to deductibility of advertising  dollars. Meetings with the advertising/marketing organizations will also focus on recognition of promotional products as a proven and cost effective advertising medium and to grow our share of advertising spend.

Promotional Products Work! Week
You can also advocate for your business and the industry on a local level by participating in Promotional Products Work! Week, April 21-25. This weeklong event is an invaluable opportunity to share what promotional products can do for local businesses, organizations, municipal agencies, schools and more. Your businesses are an integral part of your communities, so please participate in PPW!Week by hosting open houses and tours, speaking at group meetings and presenting to college classes. Check in with what companies have done in the past, and learn more about how you can be part of this great event, at http://www.promotionalproductswork.org/week.

Ever Been In The Right Place At The Wrong Time?
A key message delivered at The PPAI Expo 2014 was the date shift for The PPAI Expo 2015 to a Sunday-Thursday schedule. By now you’ve seen the clever ads and videos announcing the day shift of The PPAI Expo. If not, check them out here.

The shift from a Wednesday-Friday trade show to a Tuesday-Thursday pattern is one of cooperation and of strategy.  Our long-time partners at the Mandalay Bay Convention Center approached us about the shift based on some scheduling opportunities they saw on their end.  After researching it from both supplier and distributor perspectives, we found distributors were neutral to positive on the shift and that supplier exhibitors would largely benefit from the shift with at least 80 percent seeing a reduction in the costs of material handling and labor. Visit here for more information on the 2015 Expo.

We’ve tried to anticipate every potential opportunity and obstacle to make the date change as valuable as possible for exhibitors and attendees, but I encourage you to contact me directly if there’s anything about this change that might keep you from having the most successful show ever.

You Were Certainly At The Right Place At The Right Time
Looking back at this year’s show, it is evident that you, our biggest fans and most engaged members, made The PPAI Expo 2014 a success. Our numbers are confirmed and we had just shy of 1,400 exhibiting companies in roughly 3,250 booths on the show floor and more than 11,500 industry distributor attendees from around the country and abroad.

The Feedback page in the March and April issues of PPB features a few comments from satisfied supplier and distributor attendees. I was pleased to read the note from Josh Gerak, president of Adventure Trading, who wrote: “Thank you for hosting yet another great trade show in Las Vegas. We Found the PPAI Expo to be another awesome venue for my company to meet promotional distributors. We have exhibited at the Expo for the past six years and it seems to keep having tremendous impact for us.”

Thank you to Josh and to all that shared their thoughts and ideas. Not everyone had a perfect show, but I work with a team of trade-show professionals who work all year long to make The PPAI Expo the most valuable, respected and cost-effective business-building event in the industry. Expo is the crown jewel of the Association and if you have any ideas on how to make it even better let me know. 

Be Prepared To Be At The Right Place With New Opportunities At A Different Time
As you’ve likely heard, changes are also in store for Expo East, which in 2015 will co-locate with the Imprinted Sportswear Show (ISS) at the Atlantic City Convention Center. The show also will shift calendar dates, moving from May to March 12-15, 2015.

This co-location with ISS will allow our attendees to take advantage of the same quality education and trade-show floor they have come to expect from Expo East and experience the best the decorated apparel industry has to offer in one convenient trade show. We expect the co-location of ISS Atlantic City and Expo East to be the beginning of what will be the show to attend in the Northeast for all companies in the decorated apparel and promotional products industries. In fact, if Expo East and ISS each deliver an attendance on par with past shows, Expo East will immediately become the second largest event in the promotional products industry – second only to The PPAI Expo in Las Vegas.  

Building Bridges And Strong Relationships
In addition to helping maintain strong ties with regional associations across the United States and North America, developing and strengthening our ties with promotional products organizations across the globe continues to be a priority for the Association. To that end, fellow PPAI staff members and I have met with several international counterparts since the start of 2014.

We kicked off the year with visits to the Trade Only Show in the U.K. and the PSI Show in Germany. More recently we participated in The Promotional Products Professionals of Canada convention in Toronto, and the AMPPRO Show in Mexico City. In every case, these events have given us the opportunity to meet and collaborate with the host show organizers as well as the international organizations visiting the shows from the region. For example, at PSI we met with the European Promotional Products Association (EPPA) an umbrella organization which represents European promotional products associations in 11 European countries.

These visits are a valuable opportunity to share knowledge and information, and to cooperatively ensure that promotional products companies throughout the world are leading the charge in areas of product safety, fair labor conditions, technology and industry advocacy.

The relationships we’ve built during these trips have also allowed PPAI to serve as a resource for companies needing partners abroad. For instance, I’ve had a number of distributors looking for partners to help facilitate a local customer with an international event. I’ve successfully connected PPAI members with my association peers – in countries throughout the world. 

A Focus On Technology
When you hear the word “technology,” what’s the first thing that pops into your head? For most of us it implies geeky IT staff trying to help us remove the malware downloaded from some of our more adventurous “shopping” sites. Okay, maybe that’s just me…

Seriously, in an industry strongly rooted in relationships and tradition, technology and innovation are often usually placed on the backburner. But at the same time, we are all aware that technology has the ability to streamline and transform the way many of us do business. 

Dale Denham, MAS+, and the PPAI Technology Committee understand the challenges and opportunities facing our industry and have helped us launch the inaugural PPAI Technology Summit during Expo East in Atlantic City, May 21-22.
The Technology Summit will bring technology leaders from across the promotional products industry together to tackle these challenges and opportunities. The two-day summit is designed specifically for individuals in IT leadership positions with additional topics of discussion ranging from cloud computing to open source collaboration.

I encourage every company interested in understanding how technology can grow their business to join the technology conversation by participating in this inaugural event. Registration can be accessed here

Product Safety Awareness Program
In the decade or so I have been with PPAI, I can count on one hand the number of times we’ve ‘required’ a member company do to something above and beyond the normal association membership criteria in order to engage with PPAI or gain access to the marketplace. That recently changed when the Association took a strong stand in an effort to protect and grow the industry. 

At this year’s Expo we introduced the Product Safety Awareness Program (PSAP), an initiative requiring every member company wanting to gain access to the PPAI marketplace (trade-show exhibit space, sponsorships, advertising, etc.) – regardless of membership category – to complete a minimum of four hours of product safety education no later than the start of Expo East 2015 in Atlantic City.

It has been a little less than three months since the announcement and I am happy with the progress to date. Out of the 1,400 supplier, distributor, business services and multi-line representative member companies required to meet the education requirement more than 225 companies have already become PSAP Early Adopters. Those companies have fulfilled all the requirements of the program.  Another 100 companies have confirmed their participation in the program and nearly 400 companies have identified Product Safety Ambassadors, another requirement of the program. Progress.

That is not to say that the program has not been without its critics. Some companies believe four hours isn’t enough to make a difference. Others feel their product line or current processes should allow them to ‘opt-out’ of the program. Others just don’t like being told how to run their businesses. Each of those arguments has merit and many companies have programs and expertise in place that goes far beyond the new requirements. However, the PPAI Board feels that the issue of product safety and regulatory awareness is so compelling and important to the industry that only the strongest statement supported by complete compliance to the program can suffice. And I wholeheartedly agree.

Earlier this year, a high-ranking staff member at the Consumer Product Safety Commission sent me a personal note congratulating PPAI on the development and implementation of the Product Safety Awareness Program. He wrote, “I can’t tell you how often I hold out PPAI as an example to many groups that call me. Thank you (again) for your industry’s proactive approach and your willingness to be a resource.” Our leadership is being noticed.

Companies have until Expo East in March of 2015 to meet the PSAP requirements. I’d personally like to see us achieve 100% compliance by Expo in January 2015 so we’re making it as easy as possible for companies to quickly and conveniently and achieve the Product Safety Aware status.

Over the coming months, PPAI and our regional association partners will offer dozens of opportunities to achieve the PSAP designation through live and on-line learning platforms.  We’ve revamped the PPAI website to include step-by-step directions on achieving Product Safety Aware status, and the FAQs have been updated with answers to the questions we’ve received over the past 90 days. We’re even developing separate FAQ’s focusing on specific industry categories and segments.

I think you know by now that I put my money and time where my mouth is. I commit that we will do everything possible to help you and your colleagues meet the deadline. Want me to sit through the four hours of education with you? Just ask. It may be on-demand webinars from 11 pm – 3 am or over a weekend, but you have my commitment. It is that important to the association and to me.

I know that this small email group represents the proverbial choir so while I know you understand what I am saying maybe you can help me preach this message to the thousands of other companies that need to hear the message.

A Request For Information 
Thanks for taking the time to read this far into this update. I have one more favor to ask before you go.

Providing useable, statistical information to our industry is a top priority for PPAI. I thank you for helping me fulfill my commitment to gather and share relevant, reliable research. We have launched the 2014 Q1 Sales Barometer, and invitations to participate will hit supplier and distributor inboxes this week. In order to ensure a strong response, which will generate a more accurate snapshot of the industry, I’m asking you to help me spread the word.

I’ve posted the links to the Distributor and Supplier barometer below. Please forward it to your industry contacts and ask each of them to join you in participating. 

DISTRIBUTORS – Click Here

SUPPLIERS – Click Here

Now About The Baby With The Wet Diaper
Finally, I want to leave you all with some words on change. In a quarter where we’ve see announcements about a world power snapping up beachfront property from a neighboring country, a huge passenger jet going missing and even a supplier company buying a distributor, it is obvious that change is inevitable and largely uncontrollable. How we respond to the change is within our control and what will determine how the industry evolves.

We here at PPAI are experiencing change as well, in many areas.

Bob McLean, our executive vice president, and Gary Slavonic, our director of business development, continue the process of integrating our sales processes so that PPAI products and services are sold by internal sales representatives and key-account managers who can build stronger relationships with members.

Anne Lardner-Stone, PPAI’s director of public affairs, and the Product Responsibility Action Group, are going full-throttle on implementing the Product Safety Awareness Program and working with members to help them see the benefit of a ‘required’ education program to help protect and grow our industry.

PPB
Editor Tina Berres Filipski and her team just mailed the first redesigned issue of PPB magazine and are driving downloads of the new PPAI Media app. You can download the app here.

Darel Cook, director of expositions, and the Expo staff finalized what we expect to be a successful co-location negotiation and agreement with ISS.

And, a small group of board members just completed interviews with three candidates for our new outside counsel.

At PPAI we have other large and small initiatives under way that will change the way we develop and deliver products, services and value to our members. Some of these initiatives are in response to a changing business environment. Others are more forward reaching and strategic, and focused on keeping us ahead of the curve. Some of the changes will be visible to members and others will remain largely unseen.

Regardless, as an organization we’ve become more and more comfortable recognizing the need for and embracing change. I am confident that you are undergoing similar dynamics in your own businesses. If you’re not I suspect you will be soon – like it or not.

Gary shared the following column from Inc. magazine with his team recently, and I think it was worth sharing with you too. There’s nothing in this list that we don’t already know but it certainly is good to reminder that change is inevitable and that we must evolve to meet new challenges.

Enjoy the read.

Thank You
I want you to know I appreciate your time and your support as well as your willingness to be an advocate for the association and the industry. Have a terrific second quarter… and let me know if there’s anything I can do to help you grow your business.

Demand For #SXSW Promotional Products Captures Event Headlines; Positive Proof Promotional Products Work!

South by Southwest (SXSW) Conferences and Festivals offer a variety of events for anyone interested in music, film and interactive technologies. Year after year, this huge trendsetting event serves as a launching pad for new creative content. New media presentations, music showcases and film screenings providing buzz-generating exposure for creators and compelling entertainment for audiences. Conference panel discussions present a forum for learning; business activity thrives at the trade shows and global networking opportunities abound.

Austin’s relaxed atmosphere serves as the perfect backdrop for SXSW. Intellectual and creative intermingling among industry leaders sparks new ideas and carves the path for the future of each ever-evolving field, long after the events’ conclusion.

So, you can see why promotional products are the perfect marketing tool for SXSW creators and marketers to share strategically crafted branded products with this highly sought-after target audience.

I wanted take this opportunity to share with you our thoughts on the news and goings on at Austin’s SXSW event this week.

~~~~~~~~~~~

Promotional Products Association International has issued a statement from President and CEO Paul Bellantone, CAE, regarding screened luggage at the Austin-Bergstrom International Airport during SXSW and his rebuttal of the claim by a Palo Alto tech firm that “most of the (SXSW) freebies end up in the attic, if not the trash.

“It turns out the news reports of delays at the Austin-Bergstrom International Airport were due to the fact that SXSW event goers were actually taking their promotional products home and not trashing them.

The TSA has since issued this travel tip recommending that airline passengers leaving SXSW with lots of freebies should take them in their carry-on luggage so they can get through security faster.

Regarding the Palo Alto tech firm’s claim that ‘most of the SXSW freebies end up in the attic or trash,’ Promotional Products Association International (PPAI) and the promotional products industry wholly support the donation of unused promotional products to help those in need, and are glad the Austin-based Foundation for the Homeless is the beneficiary of the generosity and compassion of South by Southwest (#SXSW) attendees and its marketers.

Working with promotional products professionals, savvy marketers design and produce strategically branded promotional campaigns to reach and appeal to a highly targeted audience in a tangible, long-lasting and memorable manner. Promotional products are used to educate, support worthy causes, recognize and reward employee achievements, support legislation and inspire action. In cases where promotional products are not needed, consumers report a pass-along rate of 36 percent—a lucrative benefit for marketers.

Promotional Products Fact Sheet

Promotional Products Fact Sheet

PPAI’s more than 40 years of industry research supports the fact that promotional products are one of, if not the most valued of all advertising media. In fact, eight in 10 consumers own promotional products, keeping them for more than a year in their kitchen (91%), workspace (74%), bedroom (55%) and in pockets or purses (24%) because they are useful. For marketers, the efficacy of promotional products provides the best ROI in the business, delivering an 88-percent brand recall and driving 85 percent of recipients to do business with the brand after receiving a branded product.

Whether through research or anecdotal evidence, it is clear promotional products have value to everyone, otherwise, they would not be distributed to both their intended audiences and to unintended, but equally valued, audiences—audiences who will find their original purpose to be just as useful and for which they are equally appreciative.

This appreciation of the function, form and fit of promotional products is why we, as an industry, strive to ensure unused products make their way into the hands of those who can use them most—teacher resource centers, animal shelters, community outreach organizations and, yes, homeless shelters.

The promotional products industry donates, contributes and volunteers in support of the communities it serves every day with literally thousands of products, millions of dollars and hundreds of volunteer hours supporting worthy causes, schools and organizations, such as the Kids In Need Foundation, Merced Rescue Mission, Community Health Charities Minnesota, Richmond State School for Success and many more.”

Spread the word, promotional products work!

Paul

***This Is Not A Test*** Take Action NOW!

Earlier today, Chairman Dave Camp (R-MI) of the House Ways and Means Committee released his proposal for tax reform. Among many items that address corporate and personal taxes is one section that would directly affect the promotional products industry.

Camp has proposed a plan for amortization of advertising expenses, a move that follows former Sen. Max Baucus’ who released a discussion draft late last year that would allow businesses to expense only half of their advertising costs in a given year and amortize the remaining half over time.

In a press conference earlier today, Camp said that in order for corporate tax rates to be lowered, the amortization for advertising expenses must be one trade-off. Camp’s plan would create an amortization schedule over a 10-year period; 80 percent of advertising would be deductible in the first year, then 70 percent and on, down to the 50 percent number. Until now, businesses have been allowed to deduct 100 percent of their advertising costs in the year they are incurred.

This is a harmful plan for anyone in the advertising business. We as advertising industry professionals need to take action to help educate Congress about why the advertising deduction is necessary and why it must not be changed.

You can add your voice to ours and tell Congress this is not an acceptable “trade-off” and the deductibility of advertising must remain as it is today.

TAKE ACTION NOW!

Delivering Confidence & Meeting Customer Expectations

A Special Message to PPAI Exhibitors, Advertisers, Sponsors

At The PPAI Expo 2014, held January 13-17, we introduced the Product Safety Awareness Program. Developed by the Product Responsibility Advisory Group (PRAG), the program is designed to foster an industry-wide commitment and a culture where companies like yours are not only aware of product safety but are also engaged in the discussion—a discussion we believe will lead to confidence across every level in our channel.

Over the past several years, PPAI has become a respected leader in the product safety arena. We began this journey by providing hundreds of industry companies with timely and relevant product safety education courses through our professional development programs. We’ve established relationships with product safety agencies. And, we’ve made it a priority. While we are proud of our efforts, we feel we’ve only taken the initial steps in tackling this complex issue. Now we are upping the ante.

The program requires every member company wanting to gain access to the PPAI marketplace (exhibiting at a PPAI event, advertising in a PPAI publication, and/or sponsoring PPAI in any way) – regardless of membership category – to designate a Product Safety Ambassador who must complete a minimum of 4 hours of product safety education no later than the start of Expo East 2015 in Atlantic City. It’s that simple.

For PPAI, this initiative is one important part of a larger Pathway to Confidence initiative that also focuses on creating awareness and promoting the PPAI Product Safety Awareness Programeffectiveness of promotional products. But most important, we want to help you by giving promotional products buyers confidence not only in the power of the medium but in its safety. You’ve heard our mantra before, Visibility, Viability, Credibility and Community. This is the next step – Commitment, Culture and Confidence. We cannot have one without the other. Our customers say so.

Obviously a topic of this magnitude has more detail, so I invite you to take a look at the Product Safety Aware Program FAQs. For more information, visit www.ppai.org. I strongly believe this program will make a strong and bold statement both to and on behalf of our membership and the industry.

Please contact me directly with questions or concerns at PaulB@ppai.org or call 972-258-3050.

I look forward to your continued support and participation.

Paul

When Worlds Collide

Based on keynote speaker, Tony Hsieh’s “collision model” this year The PPAI Expo not only created community and co-learning, but an astounding 800,000+ collisions.

The PPAI Expo 2014 Marks 5-Year High  in Attendee and Exhibitor Numbers

The PPAI Expo 2014 Marks 5-Year High in Attendee and Exhibitor Numbers

For one week the promotional products industry comes together to launch their year, and this year they came out in force to gather industry insights and trends and set the stage for the year to come. Whether it is The PPAI Expo’s sheer size and quality or professional development and business-building opportunities, no other industry event provides this level of engagement and access to the promotional products market, its leaders, brands, new products, services and solutions.

This year, The PPAI Expo ranked 53rd among all U.S. trade shows on the Trade Show Executive Gold 100, but it is clear The PPAI Expo is the number one trade show in our industry and 2014 was personally my favorite so far.

The PPAI Expo 2014 generated growth in both attendee and exhibitor participation. At more than a million square feet of exhibition and education space, The PPAI Expo is the largest single gathering of suppliers, decorators, technology providers and distributors in the industry dedicated to showcasing new, green and Made in America products, decorating technology, motivational strategies, professional development and leadership and global access to the promotional products marketplace.

I am pleased to report The PPAI Expo 2014 attracted a five-year high of more than 11,500 attendees from all 50 states, Washington, D.C., Puerto Rico, the U.S. Virgin Islands and 34 countries, representing our fourth consecutive year of growth. Professional development and education session attendance also experienced significant increases. In fact, Zappos.com CEO, Tony Hsieh’s general session had one of the largest crowds ever measured with an overflow attendance of more than double the previous year.

This year, significant growth was generated through an increase in promotional products suppliers, decorators and distributors, as well as the co-location of the Recognition Professionals International conference with PPAI’s brand. pavilion. With the additional growth, exhibit and education space totaled more than 1,100,000 square feet, with more than 1,400 exhibiting companies in more than 3,250 booths.

We hosted more than 120 professional development and certification sessions drawing standing-room-only attendance to education tracks highlighting business management, product responsibility, marketing, sales and service and technology.

With guidance from the Association’s Product Responsibility Advisory Group, industry committees and advisory groups, PPAI launched ‘Product Safety Aware’, a program designed to enhance an industry-wide commitment and culture where companies are not only aware of product safety but are leading the discussion at every level in the promotional products channel.

The general session and keynote line-up included remarks from Zappos.com CEO, Tony Hsieh, The Mark of a Leader’s CEO & Chief Storyteller Doug Keeley;  Valorie Burton discussed how to be better, not bitter; and our industry’s own, Mark Graham of RIGHTSLEEVE and Bobby Lehew of Robyn Promotions who walked the audience through the three important models to consider in business and how to market a business to not merely survive turbulent times but to stay alive and thrive.

We recognized more than 160 companies and individuals with Suppliers Achievement, Pyramid, Image, Technology and Supplier Star awards and during the PPAI Chairman’s Leadership Dinner we gave special honors to Don Lafferre as the 2014 PPAI Hall of Fame inductee, Mike Schenker, MAS, as the recipient of the 2014 PPAI Distinguished Service Award and Peter Geiger as the recipient of the 2014 H. Ted Olson Humanitarian Award.

For the last two years I have talked to anyone that would listen about PPAI’s goal of delivering industry Visibility, Viability, Credibility and Community—we now add Commitment, Culture and Confidence to our pledge of industry advocacy. This philosophy was exemplified through Tony Hsieh’s inspirational keynote address where he explained the Zappos model of creating community, co-learning and collisions. Attendees were excited to hear how Zappos.com builds business by accelerating collisions between co-workers and their communities through organic growth generated as a result of strategic design, location and traffic flow—promoting interaction, collaboration and commerce.

Based on the Zappos.com model, The PPAI Expo week generated more than 800,000 collisions in over a million square feet at the Mandalay Bay Convention Center in Las Vegas!

Looking Forward To This Year And The Next

Next year, The PPAI Expo 2015 will be held Sunday through Thursday, January 11-15, 2015, at the Mandalay Bay Convention Center in Las Vegas; the SAGE Show will take place, April 23-25, 2014, in Fort Worth, Texas and Expo East will be held May 19-21, 2014, in Atlantic City, New Jersey. For more information, visit The PPAI Expo, SAGE Show and EXPO East.

I hope to see you at one or all of the upcoming events!

Paul

CSPC’s Neal Cohen To Present At The Expo

PPAI is pleased to announce that Neal Cohen, the Small Business Ombudsman of the U.S. Consumer Product Safety Commission (CPSC), will be speaking at the The PPAI Expo 2014. The presentation will be an overview of CPSC product safety requirements, including third-party testing requirements for children’s products and the requirements for periodic testing and material change testing. The presentation will also discuss best practices for dealing with the CPSC.

As Small Business Ombudsman, Neal provides guidance on product safety regulations specifically tailored to small businesses. He stays informed on the impact of CPSC regulations on businesses through relationships with manufacturers, retailers, and distributors in a variety of industries. Cohen uses this information to make recommendations to senior leaders at CPSC on ways to solve systemic problems and minimize the effects of regulations without compromising product safety.

Over the past few years, I, along with a number of you, have been fortunate enough to meet with Neal several times. Through this outreach, Neal has been able to learn about the industry and understands the unique compliance challenges we face. His continued connection to our industry makes him a valuable resource for anyone concerned with in product safety.

During the 2013 PPAI Product Safety Summit, Neal spoke to industry professionals about children’s product testing, a crucial subject in the industry. Neal also spoke candidly about the CPSC and its practices, addressing concerns and answering questions.

Neal has worked at CPSC in various capacities since 2009.  Prior to joining the commission, he was a criminal prosecutor in New York City.  He received his bachelor’s degree from Swarthmore College and his law degree from the Emory University School of Law and is a member of the New York State Bar.

Neal’s presentation, “Product Safety 201: Everything You Wanted To Know About Product Safety But Were Afraid To Ask,” will be Tuesday, January 14 from 10:40 am to 12:10 pm in Jasmine E, level 3. This education session, part of the product responsibility track, is free to members and nonmembers.

For questions about the session, contact Tim Brown, PPAI Product Responsibility Manager, at TimB@ppai.org.

Government Relations Today

Guest post by Seth Barnett, PPAI Government Relations Manager.

Government Relations Today is a monthly publication released by the PPAI Public Affairs team and covers political news, industry related updates and product safety insight. To subscribe to GR Today and become a more informed industry advocate, click here.

Budget Deal Reached

A bipartisan budget group led by Senate Budget Committee Chair Patty Murray (D-WA) and House Budget committee Chairman Paul Ryan (R-WI) broke a four-year streak this month when they reached an agreement on a budget to fund federal agencies.

Not since April 2009 has the government been able to pass a new budget. Until now, legislators have been churning out resolutions to continue funding government business. This accomplishment brings hope that Congress can continue its bipartisan efforts heading into midterm elections next November.

The next major step will be for an agreement to be reached on an appropriations bill before January 15. While a seemingly less daunting task, the bill must be completed, passed and signed by President Obama by the deadline to avoid another government shutdown. The House returns to work Friday and the Senate will be back on Monday.

Tax Reform Proposals

With a budget on the books, the next item of business for the 113th Congress may likely be tax reform.  While the budget passage opens up the possibility for something to be introduced during the first quarter of 2014, those involved in tax policy continue to argue that a plan may not happen transpire until after the midterm elections.

Nonetheless, Chairman Max Baucus (D-MT) of the Senate Finance Committee and Chairman Dave Camp (R-MI) of the House Ways and Means Committee have each released proposals for a tax overhaul. In the past six months, Camp, Baucus and Obama have released plans for items they wish to include in tax reform.

Baucus’ discussion drafts on tax reform contain at least one item of note for promotional products—advertising expenditures. Baucus would like to amend tax law governing the deductibility of advertising expenditures by businesses, ultimately putting an unwarranted constraint on businesses that spend money on advertising. The impact to the industry would be as widespread in that businesses would have to make considerations when choosing to allocate advertising dollars. To learn more about this draft item and to take action to protect the industry, click here.

The chairman’s drafts also include a plan for international tax reform that would require U.S. companies doing business abroad to change their cash accounting procedures. This change would require accountability to happen as the income is earned.

Camp and Baucus also both agree on cost recovery specifically targeting small businesses. They also both agree that a lower corporate tax rate is needed; Baucus seeks 25 percent and Camp is asking for a rate somewhere below 30 percent.

New Independent Contractor Debates

Legislation that will have strong repercussions for promotional products business continues to keep PPAI’s attention. Bills that would re-classify independent contractors doing business in the industry include SB 1687, which amends the Fair Labor Standards Act to require employers with independent contractors to classify new hires under more specific guidelines and to re-classify existing contractors if any classification discrepancies are evident.

While the bill, introduced by Sen. Robert Casey (D-PA) doesn’t directly target promotional products businesses, confusion and frustration may be a direct result if it passes. A more strategic piece of legislation that is definitely considered detrimental to industry contractors is SB 1706, the Fair Playing Field Act from Sen. Sherrod Brown (D-OH).

Brown is carrying forward legislation that previously was developed and introduced by former Sen. John Kerry. The bill seeks to eliminate Section 530 of the Internal Revenue Code; language in the section governs how and whether promotional products businesses are able to classify employees as independent contractors.

Currently the bill has nine co-sponsors but no bipartisan support in the Senate Finance Committee. PPAI has drafted a letter informing Members of Congress about this bill and its negative consequences for the industry. To add your voice to ours, click here to send a letter or email to your elected officials.

GR at The Expo

PPAI government relations’ staff as well as members of PPAI’s Government Relations Advisory Council will be present during the 2014 PPAI Expo to answer questions about PPAI’s government relations activities. You can find us in the PPAI HQ booth, number 1049. We will have informational documentation, a presentation about product safety and government relations and PPAI Public Affair’s staff available during show hours to answer questions. If you are interested in becoming more involved in PPAI government relations activities, email PPAI’s Government Relations Manager Seth Barnett at sethb@ppai.org to set up a time to meet during Expo.