The Center of the California Enterprise Zone Information Universe

Dan Walters: Same Old Stuff

The headline given to Dan Walter’s column in yesterday’s Sacramento Bee was “Schwarzenegger’s job programs same old stuff.” In the piece Walters suggests:

Even when there are evaluations that question the efficacy of “job creation” subsidies, those who benefit from them resist any effort to erase them.

A case in point are the several dozen “enterprise zones” that local governments created with state permission. In theory, employers locating within the zones receive various tax breaks for hiring the unemployed. In fact, the loopholes cost the public treasury about a half-billion dollars a year, or just about what Schwarzenegger wants to spend on his new scheme.

Last year, the Public Policy Institute of California released a landmark study of California enterprise zones, saying that despite their cost, they generated “no statistically significant effect on employment.”

“The state can ill-afford to continue the enterprise zone program without clearer evidence of its benefits or a well-defined plan to make it more effective,” Jed Kolko, co-author of the PPIC study, said.

And what was the response? Schwarzenegger’s administration shortly thereafter authorized creation of new enterprise zones and the business community launched a public relations drive to support the program.

Here’s a novel thought: If Schwarzenegger and the Legislature want to give new subsidies to employers for jobs that would cost $500 million, why don’t they pay for it by erasing an enterprise zone program that already costs $500 million and isn’t working?

The choice of headline is ironic, since Walters himself is just repeating the “same old stuff.” Back on November 9 Walters wrote a piece using the PPIC study to blast the Enterprise Zone program. There was a good amount of reaction to this article: From USC Professor Chuck Swenson, in the Sacramento Bee by CAEZ President Craig Johnson, and from Deidre F. Kelsey, chairwoman of the Merced County Board of Supervisors in the Merced Sun-Star.

I’m in Sacramento this week, and it is very clear that folks in the Capitol read Dan Walters. It’s a shame that Walters doesn’t take his analysis seriously enough to deal with some of the very good points made on the other side of the argument.

Leave a Reply

You must be logged in to post a comment.

Follow maxshenker on Twitter

Receive By Email

Enter your email address and receive the EZ Policy Blog by email.