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San Diego Business Journal: “Maintain, Expand California’s Enterprise Zone Program”

A commentary in the San Diego Business Journal by Dan Dufrense, director of government relations for Epsilon Systems Solutions Inc. (a business that employs people):

Here we go again.

California is strapped with more than $20 billion of deficit, a 12.3 percent unemployment rate and a staggering decline in home values. Faced with these daunting economic indicators, the outlook of the California Legislative Analyst’s Office for the 2010-2011 budget suggested that one way to repair our state’s unfortunate economic plight is to eliminate or reduce the California Enterprise Zone, or EZ, Program. Unfortunately, the Legislative Analyst’s Office’s recommendation will almost certainly hurt, not help, California’s struggling economy.

Through hiring tax credit incentives and manufacturing accelerated depreciation schedules, the California EZ Program encourages businesses to locate in historically economically challenged areas and hire employees who often face high barriers to employment.

Several areas of the country have experienced “corporate flight,” whereby companies relocate from an inner city neighborhood to a suburban community. Detroit and Buffalo, N.Y., are prime examples of how “corporate flight” ultimately results in increased unemployment, chronic homelessness, and elevated crime rates. The California EZ Program was designed to help prevent this type of devastating business exodus and the numbers demonstrate that the program continues to be a great success.

Stimulus For Change

By providing corporate tax incentives and expanding employment opportunities, the California EZ Program continues to transform economically challenged areas into thriving business hubs. National City and Otay Mesa, both of which are located within a California Enterprise Zone, are two local examples of this positive trend. Companies from throughout the San Diego region are now looking to National City and Otay Mesa as viable locations for the expansion of a lasting corporate footprint.

For example, Epsilon Systems Solutions Inc., a government contractor based in San Diego, has two locations in the San Diego Regional Enterprise Zone — one in National City and the other in Otay Mesa. Epsilon Systems’ work is focused on offering technical support for government agencies such as the Department of Defense and Department of Energy. Whether it is pipe fitting, welding or manufacturing, Epsilon Systems’ National City and Otay Mesa facilities draw from the local populous to fill its expanding hiring needs. Epsilon Systems reinvests the tax savings it realizes from participating in the California EZ Program to provide new hires with an abundance of training opportunities.

Tools To Be Competitive

The California EZ Program has also contributed to Epsilon Systems’ ability to offer its employees access to an employer-subsidized medical, dental, life and disability plan, a Stock Ownership Plan, Profit Sharing Plan, and matched 401(k) retirement plan. While other companies are closing their doors, Epsilon Systems has remained competitive.

As lawmakers tackle one of the toughest budget years, they should not be shortsighted and cut back a proven job creation tool. California needs the Enterprise Zone Program now more than ever — by creating good-paying jobs we will take pressure off of government assistance programs and generate more individual and corporate tax revenue to fill the state’s coffers. Enterprise zones help businesses survive and flourish and that is one of the best ways to ensure economic recovery.

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