The Center of the California Enterprise Zone Information Universe

JEDE Committee Hearing 10/8/2009 – Part 2

Here is the final version of the agenda from last week’s hearing with the actual list of speakers.  This hearing predominantly featured the perspectives of businesses that utilize the program and the local governments who administer it.

It was notable that AB 1139 author Assemblyman John Perez was present for most of the meeting and engaged the presenters in serious dialogue highlighting some differences in understanding the actual purpose of the program.

On the second panel, John Weiss, Assistant Executive Director, San Jose Redevelopment Agency, gave a Power Point presentation which provided a very good perspective on how the program is being utilized in San Jose. The City was kind enough to provide me with a copy of the presentation here.

Arguably, the highlight of the hearing came at the very end of the public comment section when Andrew Myrick, manager of the new Salinas Valley Enterprise Zone, gave an impassioned presentation on the perspective from his zone.  The Committee Chair was clearly moved and invited Myrick to present again in a forum which woud have a larger audience.  I asked Andy if he happened to have his remarks in writing, and he provided me with the following notes:

Although the TEA is the most used criterion for claiming hiring credits, this is because it is the easiest one procedurally for businesses.

o Because an employee is claimed under the TEA does not mean they could not have been claimed under another criterion. For example, an employee residing in a TEA could also be eligible for CalWORKS. This information does not show up in the statistics.

o We are working with the Monterey County OneStop Career Center (the local CalWORKS, WIA, and WIB Administrator) and they have agreed to review all of the TEA vouchers we approve and see if they can determine if they would qualify under another criterion. Hopefully, this will provide information about the use of the TEA.

o OneStop is also pre-screening job-seekers to see if they qualify them for credits. If they qualify, they are giving them “Gold Cards” with information on the Enterprise Zone that they can show to potential employers. Employers can contact OneStop for more Zone information and to get the documentation necessary to obtain the Credits. This helps employers identify potential employees at the hiring phase, rather than simply claiming the credit after the fact.

Even if every person living in a TEA may not be individually disadvantaged, the true value of the TEA lies in rehabilitating suffering communities.

o Unemployment in the Salinas Valley is (and has been) double-digit for years…some communities already unemployment of 20%-25%.

o If past trends continue, some communities in the Salinas Valley could see unemployment rates of 35%-40% in the coming months when the ag jobs heads south for the winter.

o The unemployed and their families are attractive targets to criminal gangs looking to recruit new members.

o We have implemented a new program in Salinas known as Operation Ceasefire. It involves offering gang members a chance to get out of the gang lifestyle through incentives of job training and support services.

o The Enterprise Zone has partnered with Operation Ceasefire to help them in their efforts. We can help convince the targeted youths that getting a job is a real possibility because their first-year wages will be cut in half through EZ tax credits. Similarly, businesses will be more willing to take a chance on these youths if there is a financial incentive to do so (for this reason, tax credits should remain high during the first year of employment…providing low credits during the first year provides little incentive for a business to take a chance on that employee).

o The TEA is vital in helping us to make sure that every at-risk youth would qualify for tax credits.

The threshold for the Employee Tax Credit should be increased

o We will be making efforts to publicize this benefit by putting information on our website and training VITA program volunteers in how to claim the Credit.

o However, the threshold is too low – a full-time minimum wage worker would make too much to qualify for the credit.

o This limits its effectiveness. We don’t know where the threshold should be, but we believe it is too low if even minimum wage workers cannot take advantage of this program.

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