Last Updated: January 26, 2011 07:12:17 PM
As one of his proposed budget solutions, Gov. Jerry Brown is calling for an end to enterprise zones — areas in which businesses get big tax incentives for adding or retaining jobs.
Inevitably this will turn into a major political fight, perhaps with a small twist — politicians from both parties champion enterprise zones, which are scattered throughout the state.
Los Angeles Mayor Antonio Villaraigosa has declared that Brown’s effort to close the enterprise zone loophole is a “non-starter.” Los Angeles, with expansive enterprise zones, offers businesses in the zones discounts on local taxes and fees. Brown’s proposal would not affect local breaks, only those provided by the state.
The state estimates it loses almost $500 million a year in corporate and other tax revenue by providing these tax incentives. Critics claim that the credits and breaks amount to a giveaway, with little actual gain in jobs.
But others, including Bill Bassitt, chief executive officer of the Stanislaus Economic Development and Workforce Alliance, are passionate about the value of enterprise zones. He calls the enterprise zones nearly the best incentive program he has seen in 30 years. One of the reasons for its success is that both existing and new companies are eligible. Most incentives are aimed at luring new businesses.
