Bassitt: Enterprise zone working well here

By Bill Bassitt

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A recent report from the Public Policy Institute of California claimed, and was cited in a piece in The Bee ("Enterprise zones are just corporate welfare," June 18, Page A-9) by the chief lobbyist from the American Federation of State County and Municipal Employees union as evidence, that enterprise zones are not meeting employment expectations and should be ended.

For the record, the act that created enterprise zones speaks only of the creation of job opportunities and says specifically, "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."

It states further, "It is in the 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 job opportunities for all Californians."

Short of a national industrial policy that prohibits states and localities from employing any type of incentive program to attract businesses to locate in their areas, success will be afforded to those that recognize the needs of business and respond with incentives that encourage expansion and growth that would not occur without them.

There is a record number of unemployed in the state of Georgia. That state recently spent $96 million in incentives to entice NCR to locate a corporate headquarters and a production facility with 2,120 jobs into the state.

Connecticut, with a two-year billion-dollar budget deficit, is offering loans and tax credits to encourage companies to expand or locate into the state.

North Carolina has enacted legislation giving corporate income tax relief to companies willing to locate in distressed areas. Most states have multiple incentive programs for business.

California is the eighth largest economy in the world. Certainly lots of companies need to be here. But it also is the sixth most expensive state for businesses.

For this state to be business competitive, incentives of a comparable nature must be offered to companies who have a choice on their operational locations. The California Enterprise Zone program is one type of incentive that businesses can use to help calculate the bottom line cost of operating in this state.

Zone 40, the original enterprise zone designated for Stanislaus County, was authorized in 2005.

Following several expansions to allow equal participation for all communities in the county, the zone encompasses approximately 75,000 acres of predominately industrial- and commercial-zoned land.

In the past 18 months, 683 people have been employed in new positions with companies located in the county. In that same period, 4,489 people have been hired for existing positions. More than 250 companies have participated in hiring more than 5,000 county residents, employing many who could not have found work without this program.

This proves, in spite of the PPIC's claim, that the enterprise zone is working well for Stanislaus County.

Others agree that enterprise zones work.

A new study from USC professor John Ham and others reveals that enterprise zones are bright spots in areas lagging in economic development and employment. California's Housing and Community Development department commissioned a study shows that compared to the rest of California, the enterprise zones had a 7.35 percent drop in poverty rates; a 7.1 percent increase in household incomes; and a 3.5 percent increase in salaries. Further, they concluded that enterprise zones increased employment by 2.2 percent.

As we face double-digit unemployment, any increase in jobs looks pretty good.

Bassitt is chief executive officer of the Stanislaus Economic Development and Workforce Alliance