BOE member and former Senator George Runner posted the following analysis of the Governor’s new Enterprise Zone proposal on the Flash Report today:
I have reviewed the Governor’s latest budget proposals related to Enterprise Zones, and they are as bad as the original proposal that would have eliminated the program altogether.
It’s Still a Tax Increase:
First of all, this would still impose a tax increase on thousands of California businesses that would be retroactive. Many of these businesses have survived thanks in large part to the Enterprise Zone program, and have kept their employees working in California during the economic recession.
High-Tech and Bio-Tech Industries Harmed:
The Governor’s limitations on tax credit carryovers would be particularly harmful to startup companies especially in the high-tech and bio-tech sectors that would be unable to utilize the Enterprise Zone tax credits.
Governor’s Enterprise Zone Plan Would Force Job Layoffs:
The small business community has reviewed the Governor’s plan and they are alarmed. A small printing firm in San Diego had this to say about it: “Thanks to Enterprise Zone tax credits, we were able to retain employees that we otherwise would have been forced to lay off during the latest recession. This new proposal puts my company and my employees at even greater risk.”
Governor’s Enterprise Zone Plan Hurts Veterans and Disabled People:
The new plan takes away Enterprise Zone tax credits for veterans and disabled people who are now covered under the existing program. This would result in lost job opportunities for the people who need this program the most.
Increases Fees for Small Businesses:
Small businesses already are burdened by California’s high taxes and fees. The Governor’s new Enterprise Zone plan would increase fees even more.