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Salinas Valley EZ Getting Ready

From the Monterey County Herald, by Jim Johnson:

With a sinking economy hampering business and driving unemployment above 10 percent in California, local officials believe they have found a way to boost economic growth and jobs in the Salinas Valley.That’s because the region, which stretches from Salinas south along Highway 101, has officially qualified as an “enterprise zone,” a designation that sets up a series of state-backed tax breaks aimed at promoting investment in new and existing businesses, and job creation.Today, the Board of Supervisors will consider a pact between the county, the city of Salinas and four valley cities including Gonzales, Soledad, Greenfield and King City that is a condition of the state’s approval of the Salinas Valley Enterprise Zone. The board will review a somber three-year financial forecast that projects a $163 million budget shortfall through 2011-12.On Wednesday, the board will conduct a special budget workshop aimed at beginning to close that gap. The meeting begins at 9a.m. in the board chambers at the county government center in Salinas.In January, Gov. Arnold Schwarzenegger announced that Salinas Valley had earned final enterprise zone designation, a year and a half after the coalition led by the city of Salinas had applied. Salinas Valley was one of eight regions to earn an enterprise zone designation, and the only new one. There are 42 enterprise zones in the state, and the designation lasts for 15 years.Supervisor Simon Salinas, who represents most of the Salinas Valley as part of the third supervisorial district, believes the enterprise zone will help develop new businesses and jobs especially in green technology and alternative energy at a crucial time for the area.”We’re trying to stimulate growth during a difficult time,” Salinas said. “I think the fact that we have the enterprise zone will help with employment, even for the youth. It’s hard to place employees and this will help with that, hopefully.”Under the program, administered through the California Enterprise Zone, new and expanding businesses can apply for tax credits for capital investment business loans, purchase of new equipment and machinery, and net operating losses, as well as incentives for hiring hard-to-place employees.According to Jeff Weir, Salinas’ economic development director, the tax credits are especially welcome for new businesses that are facing large up-front costs combined with initial operating losses, as well as current businesses looking to invest in expansion. That, in turn, helps create more job opportunities, Weir said.”It’s designed to encourage people to do more as a business,” he said.Employers who hire from specific categories of prospective workers, such as veterans, felons, and work-to-welfare candidates, can qualify for tax credits of about $37,440 per employee or more — spread out over five years. Weir said the county’s one-stop career center will play a key role in matching employees with participating businesses.In exchange, the state gets to monitor and audit the program and participating businesses to ensure compliance with state guidelines.Weir said enterprise zones have generated mostly positive reviews from other regions, including Fresno, which is a large (albeit much larger than Salinas) city surrounded by agriculture and smaller cities.According to a state study, enterprise zones showed a quicker decline in poverty and unemployment rates, and larger increases in incomes, than the rest of the state.Weir said the program has attracted plenty of interest from local businesses, particularly large agri-businesses looking to expand, as well as companies who specialize in deciphering the associated tax incentives. However, he acknowledged that interest has lagged as the economy has worsened.

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