The Center of the California Enterprise Zone Information Universe

Breaking: Steinberg Jobs Package Includes Hit On Enterprise Zones

The California Senate Majority Caucus has released the list of bills in its 27 bill “Jobs Package.” They claim that

This comprehensive bill package invests existing state and federal funds for targeted projects, expands jobs in the new economy, prepares Californians for jobs in growth industries, and provides working families with sorely needed relief.

The bill package proposes to create 140,000 jobs without raising taxes or waiving any environmental, consumer, or workplace protection laws. Further, all of the bills need only a majority vote for approval.

The California Research Bureau has concluded that a jobs package which creates 100,000 jobs creates $6.7 billion in economic activity per year, saves the General Fund approximately $2.3 billion in increased revenue and avoided costs, and results in a net increase in employment of approximately 300,000 jobs- reducing unemployment by 275,000.

The package includes SB 974 which is a direct assault on the Enterprise Zone program. The bill’s preamble says:

SB 974, as introduced, Steinberg. Income tax: credit: career pathways investment credit.

The Personal Income Tax Law and Corporation Tax Law authorize various credits against the taxes imposed by those laws.

This bill would find and declare that the deep economic recession in California requires strategic investments to educate and prepare the workforce to fuel the next state of economic growth. This bill would find and declare that if the dropout crisis is left unchecked, the rate of middle and high school dropouts will increase. This bill would state the intent of the Legislature to enact legislation to ensure that the state’s tax expenditure investments are rigorously evaluated and to establish fiscal incentives, such as tax credits, that encourage California businesses to enter into partnerships with schools to strengthen education and develop career skills.

Regarding Enterprise Zones the bill says:

(8) New research from the Public Policy Institute of California suggests that the state’s enterprise zone tax credit program has not significantly increased job creation or the employment of hard-to-hire individuals, as was intended. Two aspects of the program that were poorly designed and have produced an especially poor return on investment, Targeted Employment Areas (TEA) and retroactive vouchering, should be phased out in favor of fiscal incentives that enhance workforce development for the jobs of the future and that have a beneficial impact on high school graduation rates.

The manner of “phase out” is not specified, nor are the new theoretical incentives.

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