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San Bernardino Mayor: “Enterprise Zone program is succeeding”

From the San Bernardino Sun:

It is no secret this is one of the most challenging budget years for California. It is understandable that a thorough review of the state’s expenditures is taking place.
One such expenditure under review – the California Enterprise Zone Program – is directly tied to the success of many of our small and medium-sized businesses. The changes in policy being discussed could increase the cost of doing business for many local companies and put jobs at risk.

The San Bernardino Valley Enterprise Zone is our local zone in this program. It is a 42-square-mile region that includes the cities of San Bernardino and Colton plus portions of county property, and contains 4,000 businesses. These businesses are eligible for tax credits and business incentives if they meet certain specifications. These incentives not only serve to attract businesses to locate to the zone, but also allow companies to reduce the cost of doing business. This leads to greater and more stable employment in the enterprise zone.

California’s Assembly Committee on Jobs, Economic Development and the Economy is reviewing and considering revisions to the California Enterprise Zone Program statewide, and recently completed a series of pubic hearings in the process.

These hearings, held in San Diego and San Jose, were attended by a number of businesses from enterprise zone areas that shared and identified ways the program is helping to stimulate their local economy and keep their businesses stable.

The Assembly Committee heard them and I hope their testimony will be considered.

Some of the feedback received from businesses in the San Bernardino Valley Enterprise Zone also makes a strong case in support of this zone and its impact to help our local employers continue to thrive and employ residents.

It is difficult to argue with evidence of an employer that is not just surviving, but thriving in this difficult economy.

For example, Brithinee Electric, a manufacturer of industrial electric motors, wind generators and custom motor control centers, has utilized the enterprise zone program for nine years, and as a result, has doubled its work force. The tax credits allowed Brithinee Electric to hire local residents, and the savings produced by the tax credits funded additional technical skills training for these new hires.

According to Tom Lund, director of operations for Isolatek International, a leading manufacturer of passive-fire resistive materials for commercial construction, the enterprise zone was an additional incentive to move to San Bernardino in 2007. The company has filed hiring tax credits and will file for sales and use tax credits on equipment purchased, which will increase their savings. Now in the process of hiring an additional 20 employees, the incentives are helping make the company more competitive and employ more people.

These are two examples of how effectively this program is working in our local economy, and there are many more similar stories.

Unfortunately, not all the businesses located in the zone are taking advantage of these incentives. In an economy like this, no company should be leaving money on the table.

Businesses located in the San Bernardino Valley Enterprise Zone may reduce state income tax by more than $35,000 per qualified employee over a five-year period. Another incentive helps enterprise zone businesses by allowing a tax reduction for property and equipment that is purchased and used within the boundaries of the zone. For our small and medium-sized businesses, these incentives can make a difference between profit and loss.

I urge all businesses located in the enterprise zone to take advantage of these incentives that will reduce their business costs. The process is not complicated and more information can be found at

I also encourage legislators considering revisions to the enterprise zone program to avoid removing any incentives that may increase the cost of doing business for our local employers. This program is helping to sustain our struggling businesses and keeping our residents employed during these challenging times.

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