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Siskiyou Reaction to LAO

Siskiyou County is one of eight areas

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that recently received conditional designations for new Enterprise Zones. Based on this article in the Siskiyou Daily News, it sounds like some local officials are not too pleased with the LAO’s budget recommendations:

A recommendation from the state’s legislative office has put the board of supervisors on the offensive.

According to District 4 Supervisor and Board Chair Bill Overman, the Legislative Analyst’s Office (LAO) has – in order to cut the state’s budget – recommended that Gov. Arnold Schwarzenegger cancel the recently designated enterprise zones throughout California.

If that happens, Overman said during Tuesday’s brief board meeting, it ’will have dire consequences.’

The LAO is the state’s nonpartisan fiscal and policy advisor. Its Web site states that it serves as the legislature’s ’eyes and ears,’ a job it has done for more than 65 years.

The 2008 LAO budget analysis proposed to phase out enterprise zone programs.

The report states, ’Cancel the recent redesignations of enterprise zones and deny future extensions for all other EZs.’

The LAO offers the following rationale in the report:

’Many studies of EZs question whether they are efficient or cost-effective tools for improving the economic conditions of the targeted areas.

’A December 2003 report, ’An Overview of California’s Enterprise Zone Hiring Credit,’ concluded that EZ incentives have little, if any, impact on the creation of new economic activity or employment, but that they can be effective in shifting activity into the EZ that otherwise would have occurred elsewhere in the same geographic region.

’As noted above, many EZs have already been in effect for many years. It is not clear what additional benefits will be gained by extending the same incentives that have already been in place for as many as 20 years. Rather, other redevelopment policy tools could be more effective than extended use of EZ tax incentives.’

Last month, Siskiyou County was awarded countywide enterprise zone status.

Overman drafted a letter to the governor, urging Schwarzenegger to reject the LAO’s recommendation.

Supervisors Marcia Armstrong, Jim Cook, LaVada Erickson and Michael Kobseff read the letter and gave their approval of it. Copies of the letter will also be sent to Assemblyman Doug LaMalfa and Senator Sam Aanestad.

Overman said that the county’s lobbyists will carry a similar message to other legislators.

Tonya Dowse, who oversees the Siskiyou County Economic Development Council, said that some of the nine incorporated cities are also taking ’preemptive measures.’

’A number of city councils are drawing up letters of support,’ she said.

She noted that Yreka Mayor Rory McNeil wrote a letter which will be sent to Sacramento legislators.

’Our part of the state has been hard hit by economic stagnation. However, other parts of the state haven’t experienced similar problems,’ Dowse said. ’It’s easy to have a misperception that enterprise zones aren’t needed.’

She hopes that the governor continues his support of the zones.

’The governor has been a big supporter of the zones,’ she said, ’and I feel that his support will continue.’

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