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CAEZ Editorial

CAEZ President and Long Beach Enterprise Zone manager Craig Johnson had the following editorial printed in the Long Beach Press-Telegram:

Lately many business writers have taken to beating up on the state of California. Chief Executive Officer magazine recently ranked California as the worst state to do business in. Traveling around the state to business meetings, I often hear the joke that California is “like Detroit with sunshine.”

I think that is an exaggeration, but unfortunately there are some reasons why California is seen as being unfriendly to businesses. California has the highest business tax among Western states and combined with California’s high workers’ compensation costs, many business owners feel they are under assault and they’re not getting any help from Sacramento.

Many California business owners have surveyed the economic and political landscape and are looking to relocate to more business- friendly locations. I witnessed a perfect case of this in Long Beach. Cal Worthington Ford is an icon in the Long Beach area, but the company was recently considering a move.

If that business had left Long Beach it would have had a devastating effect on the local economy. Cal Worthington Ford employs about 100 workers and contributes hundreds of thousands of dollars in annual sales tax revenue to the city of Long Beach.

The state of California needs to offer companies like Cal Worthington Ford more incentives to stay in the Golden State. The best incentive is the California Enterprise Zone program. An enterprise zone is an area that has been deemed economically distressed by the California Department of Housing and Community Development. Businesses located in an enterprise zone qualify for special tax incentives.

The program’s goal is to stimulate business and job growth – and it works. Studies show that companies located within an enterprise zone pay higher wages and enterprise zones have lower rates of poverty.

Sacramento needs to understand that we can no longer assume that employers will simply stay in California because of the good weather. There is fierce competition from other states to attract our businesses.

Many California business owners have considered moving to neighboring states such as Nevada and Arizona, because of lower operating costs. In addition, many states have very attractive relocation packages. These states offer incentives such as paying worker’s salaries for a year, tax credits and even constructing buildings for new businesses.

California was once known as a leader in business and innovation. The only way we can retain that title is by continuing to back entrepreneurship through programs like the enterprise zone.

We need to give business owners more reasons to keep and add jobs in California. The Enterprise Zone program is a proven business retention and job creation tool that provides California businesses the opportunity to grow and prosper.

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