EZ Policy Blog

The Public Policy Institute of California is getting ready to re-release a report it did last year on the Enterprise Zones which will state, “The enterprise zone program, the state’s largest economic development effort, has failed to achieve its key goal: increasing jobs.”

But how does the PPIC know that the “key goal” of the EZ Program is to increase jobs?

According to the Government Code of the State of California in “The Enterprise Zone Act” (Section 7070-7089) this is not so cut and dry:

7070. This chapter shall be known and may be cited as the Enterprise Zone Act.

7071. The Legislature finds and declares as follows:

(a) The health, safety, and welfare of the people of California depend upon the development, stability, and expansion of private business, industry, and commerce, and there are certain areas within the state that are economically depressed due to a lack of investment in the private sector. Therefore, it is declared to be the purpose of this chapter to stimulate business and industrial growth in the depressed areas of the state by relaxing regulatory controls that impede private investment.

(b) It is in the economic interest of the state to have one strong, combined, and business-friendly incentive program to help attract business and industry to the state, to help retain and expand existing state business and industry, and to create increased job opportunities for all Californians.

(c) No enterprise zone shall be designated in which any boundary thereof is drawn in a manner so as to include larger stable businesses or heavily residential areas to the detriment of areas that are truly economically depressed.

(d) Nothing in this chapter shall be construed to infringe upon regulations relating to the civil rights, equal employment rights, equal opportunity rights, or fair housing rights of any person.

I could not identify any part of their study that addresses measuring the relaxation of regulatory controls that impede private investment within Enterprise Zones.

In fact, no part of the Act explicitly states that increasing jobs is the purpose of the program. A goal of increasing job opportunities is not even necessarily the same thing as increasing job counts. But even if that is a goal, it is certainly not the only or primary goal of the program as stated in law.