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San Joaquin Local News

Here’s a story from the Contra Costa Times on what the San Joaquin Valley Enterprise Zone is doing to market the incentives.  There are a couple of gems in article:

Officials with San Joaquin County’s newly updated and expanded enterprise zone are aggressively going after its latest additions — portions of Lodi, Manteca and Tracy, for instance — to take advantage of the tax-incentive program designed to spur job growth.

And with the economy struggling, supporters say, the state incentives couldn’t have come at a better time.

Some policy experts, however, say the promises of enterprise zones are overstated.

In September, the state finalized the county’s new enterprise zone, a special label that allows businesses within the designated area to take advantage of tax credits for new employees, machinery and other benefits.

The new zone, which expires in 15 years, covers 656 square miles of property, much larger than the county’s previous zone of about 30 square miles. The last zone, which was established in 1993 and expired in 2008, included mostly portions of Stockton and surrounding areas, while the new one has added many of the county’s other cities.

Fran Aguilera, the county’s economic development director, has been holding workshops with business owners throughout the county to drum up participation. While the enterprise zone program is the state’s largest job incentive offering, it is not widely used.

Aguilera estimated that about 5 percent of qualified businesses statewide use the tax credits. Large manufacturers are the most common participants, while small- to mid-size businesses rarely take part, he said.

“We want to make sure we get the word out, because it’s important,” Aguilera said. “If we can save them tax dollars … that means more wealth in our community.”
That there is little participation in enterprise zones would not surprise researchers at the Public Policy Institute of California.

The think tank analyzed employment and geographic data from 1992 to 2004 and conducted interviews with local enterprise zone administrators. In June, study authors released a report that concluded the zones don’t create jobs any better than areas that can’t offer businesses the same tax incentives.

“Our main finding is that enterprise zones have no statistically significant effect on either employment levels or employment growth rates,” the study’s authors wrote. “The absence of evidence … clearly calls into question whether the state should continue to grant enterprise zone tax incentives.”

Aguilera called the report “voodoo science” and said its authors didn’t probe deep enough for other benefits, such as reduced poverty and increased household incomes. He said other studies have drawn more positive conclusions.

Cindy Schock, human resources director for Scientific Specialties, in Lodi, said her business is a real-world example of the program working.

The manufacturer of disposable medical and research supplies, which she admitted has been largely shielded from the recession, has already approved 10 new hires under the enterprise zone program. An additional 16 new hires are in the works, Schock said.

“It’s worked great for us,” she said. “I don’t know why more people aren’t taking advantage of it.”

Ursula Luna-Reynosa, economic development director for the city of Tracy, said the program is technical and hard to market.

“There’s not really a great sound bite,” she said. “You take advantage of the program when you do your taxes.”

Now that the expanded zone includes Tracy, where 70 percent of the workforce commutes out of town, Luna-Reynosa said she hopes the program will encourage local business growth.

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