California Enterprise Zone News

The Enterprise Zone program is an essential tool for economic growth in California. The program delivers measurable benefits to our state by creating jobs and business growth opportunities, while reducing unemployment, increasing household income and lowering poverty rates. The state’s 42 Enterprise Zones are located in economically distressed communities across California, from Eureka to Calexico and points in between. The Enterprise Zone program has played a pivotal role in statewide job expansion, while creating job opportunities for those with barriers to employment.

Since it’s creation in 1984, the Enterprise Zone program has been vital to hundreds of businesses, spurring job creation, retention and attraction and making California a more attractive place to do business. Combined with the Enterprise Zone program, lowering taxes and fees, especially on California businesses, will increase revenues, so that fewer budget cuts will be required.

California does have a budget problem, but we can grow ourselves out of this dilemma, by providing businesses with reasons to stay, grow and expand. Small and medium-sized businesses have always been the backbone of California’s economy, yet the state faces an uncertain financial future unless we provide them with the tools necessary to promote business growth in California. Without it, the future will be bleak indeed.

In the midst of this recession, other states are expanding their enterprise zone programs and are implementing incentives that are focused on attracting businesses from California. It is absolutely imperative that California have a meaningful and useful economic development program to fight back. The enterprise zone program is just that.

Professor Charles Swenson from the University of Southern California Marshall School of Business confirms that enterprise zones work. His research found that California’s enterprise zone program decreases unemployment rates, boosts wage, salary and household incomes and decreases poverty rates. Another study by the California Department of Housing and Community Development found that poverty rates and unemployment declined and incomes increased more in enterprise zones than in the rest of the state.

That is exactly why the city of Salinas and its partnering communities worked hard to obtain a designation as an enterprise zone. As part of our commitment to economic development, the Salinas Valley Enterprise Zone is partnering with the Monterey County OneStop Career Center to help match qualified employees with eligible businesses and put people back to work.

Additionally, the Salinas Valley Enterprise Zone will soon start aggressively marketing the benefits of the zone to existing businesses. A new entity, the Salinas Valley Economic Development Corporation, is being formed to attract new businesses to the area.

As our state looks for ways to solve its financial crisis, our decision makers should focus on increasing employment opportunities and growing our economy. Designating the Salinas Valley as an enterprise zone is a step in the right direction. Our entire region, and now the state, is committed to enhancing residents’ quality of life by revitalizing distressed communities and creating high-paying jobs.

By encouraging businesses to stay in the Salinas Valley and attracting new ones, the Salinas Valley will be able to diversify and grow its local economy and ensure that the region has a healthy economy.

• The 2006 report to HCD on enterprise zones found specifically:

• Poverty decreased 7.35% more in zones than in the rest of California;

• Unemployment rates fell by 1.2% more than the rest of the state;

• Household incomes grew 7.1% faster in zones; and

• The wages and salary levels in zones grew 3.5% more than the rest of the state.

“Census tracts that were designated as EZs experienced larger declines in unemployment and poverty rates compared to the areas surrounding them, or compared to the areas that had similar unemployment and poverty rates.” – Report by Ayse Imrohoroglu and Charles Swenson at the University of Southern California, “Do Enterprise Zones Work?,” 2007

Salinas Valley was granted their final designation on January 30th.  That would make it the first of the 2008 round of applicants to be granted final designation.

The Gardena City Council has decided to spend $42,000 on an application seeking designation of the city as a state Enterprise Zone, which will allow officials to offer business tax incentives.

The city applied for the designation last year but it was not approved. This year, city officials said they will have a better chance because of an improved application.

The city does not have a Redevelopment Agency, so city officials believe the Enterprise Zone designation would help attract desired businesses.

To qualify as an Enterprise Zone, an area must meet certain economic and distressed criteria.