The Center of the California Enterprise Zone Information Universe

Oxnard: “California’s economic future rests on our ability to retain business and promote entrepreneurship.”

HCD has ranked all 15 applications for the new Enterprise Zones and the results have been with the Governor’s office since sometime last month.  Presumably, they are waiting for the right moment to announce the four new zones.

One of those applicants was the City of Oxnard in Ventura County. Bruce Stenslie, president and CEO of the Economic Development Collaborative of Ventura County and Steve Kinney, president of the Economic Development Corporation of Oxnard have published an Op-Ed in the Ventura County Star directly responding to Dan Walters’ recent editorial on the PPIC report.

Walters questioned the value and effectiveness of California’s economic-development policies. He took particular aim at California’s enterprise zones, which are intended to encourage employment and economic growth. Given our economic crisis, and the tough challenges in Sacramento and locally to identify investment strategies that will aid our recovery, it is critical we consider every option and strategy. We welcome Walters’ thoughts on the state’s economy, but think his recent comments lead us in the wrong direction.

We would like to join the debate about what investments make most sense for California and its local economies. We believe that if we educate The Star’s readers about how enterprise zones work, and who benefits, there would be widespread support.

Further, we think Walters has it wrong when he characterizes California as being burdened by ineffective economic-development programs, stacking up “in ever-growing layers.” In fact, the evidence suggests the opposite is true, that California’s recovery is harmed by its lack of economic-development investment, not by some imagined growth of programs to help business.

For fair disclosure, we are advocates for securing a new enterprise-zone designation for Oxnard. This is an uphill battle, as to establish a new enterprise zone, an existing zone must be dropped from the state’s program.

To understand why cities seek an enterprise-zone designation, and to evaluate its merits, it’s important to understand how it works. Enterprise zones are tied to areas that suffer higher-than-average unemployment and poverty. Businesses within an enterprise zone may receive tax credits for hiring new workers, but only for workers who reside within the enterprise zone or who face serious barriers to employment. The benefits for Oxnard are unique. We have high levels of joblessness in neighborhoods near the city’s industrial and commercial districts, but a disconnect between employers and residents. An enterprise-zone designation will place a premium on the skills developed by workers in the city, by rewarding business with a tax incentive for training and hiring local workers.

Stories that are critical of enterprise zones conveniently leave out or downplay this point about worker opportunity. The goal of an enterprise zone is not just to increase the bottom line of business, rather it is to incentivize opportunity for local workers, creating pathways for workers to benefit from business growth.

Those gains for workers decrease tax outlays for public supports. The single most serious impact of this recession is increasing unemployment. More than ever, we should be looking for ways to promote jobs, particularly for those hardest hit by the recession, and that’s exactly what enterprise zones do.

On the subject of whether California is doing enough to promote economic development, we draw readers’ attention to another study. June 23, the Milken Institute in Santa Monica published a report that documents how California is losing high-paying manufacturing jobs to other states, precisely owing to our lack of any proactive agenda to retain them. Our problem is not layers of programs for business, it’s that Sacramento has forgotten that workers don’t have a chance to win if business doesn’t have a chance to compete.

California’s economic future rests on our ability to retain business and promote entrepreneurship. When we become truly dedicated to and effective at that, we’ll create jobs and opportunity for California’s workers.

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