AB 1278 authored by Assemblyman Jerry Hill failed to pass through its hearing in the Assembly Jobs Committee yesterday. The bill sought to severely limit an employer’s ability to claim Enterprise Zone tax credits if they relocated to an Enterprise Zone from another part of the state.
Toni Symonds, the consultant for the Assembly Jobs Committee, has provided exhaustive analysis of the bill, its rationale, and some of its consequences. It is definitely worth delving into and provides a thorough background of the legislative activity involving the program over the last several years. The analysis begins by addressing the following policy questions:
This measure raises several potentially conflicting economic and workforce development policy issues:
a) Business Retention Incentives: To the extent that a business has decided to vacate its existing location, is it in the state’s interest to prohibit lower income communities from trying to attract and retain the business within the state?
b) Worker Protection Incentives: To the extent that a business lays off employees at one of its facilities and hires another employee at a new location at a potentially lower wage rate, is it in the state’s interest to provide that company with a tax credit?
c) Target Population Incentives: To the extent that a business hires an individual from a targeted population or who lives in an economically challenged census tract, is it in the state’s interest to limit the business’ access to state incentives?
EZ junkies will want to print this one out and save it.