Support Gov. Brown’s proposal to eliminate costly “Enterprise Zones!”
As part of his 2011-12 state budget proposal, Governor Jerry Brown has proposed to eliminate so-called “Enterprise Zones,” a move which would generate nearly $1 billion in revenues over the next two years.
For years now, experts have criticized Enterprise Zones as ineffective, costly and prone to substantial abuse. Numerous studies have also found that Enterprise Zones have little to no impact on creating or maintaining jobs in California.
However, the Governor’s proposal to eliminate the Enterprise Zone program is being met with some opposition in the Capitol. If the Enterprise Zone program is not eliminated, then California would have to make up the difference with even more brutal cuts.
Show your support today and join a broad coalition of labor, health and human services, and consumer organizations by signing on to the California Labor Federation’s letter below urging support for Governor Brown’s proposal to eliminate costly and ineffective Enterprise Zones!
To sign-on, simply click here and send us an e-mail with your NAME, POSITION, PHONE NUMBER, and the NAME OF YOUR ORGANIZATION.
SUPPORT THE GOVERNOR’S PROPOSAL TO ELIMINATE ENTERPRISE ZONES:
Governor Brown’s budget proposes to eliminate the EZ Program for a state savings of $924 million over 2 years. The EZ program has grown substantially since it started in 1986 and is the state’s largest economic development program. Independent research has shown that the EZ program is ineffective and has failed at creating jobs in California.
At a time when Californians face deep and painful cuts to core services, every state dollar must be scrutinized. Taxpayers deserve the highest return possible on their investment. If the Enterprise Zones are not eliminated, then we will face even more brutal cuts to the programs we care about. UC and CSU would have to turn away more students. Low-income seniors would be forced out of their homes after losing their In Home Supportive Services providers. And our public schools face devastating cuts.
A broad based coalition of labor, health and human services, and consumer organizations support the elimination of the Enterprise Zone program.
EZs DO NOT CREATE JOBS: The Public Policy Institute of California’s 2009 study found that Enterprise Zones have “no statistically significant effect on either employment levels or employment growth rates”. In addition, the California Legislative Analyst’s Office has issued several reports concluding that the EZ program does not create jobs. In 2011, the LAO recommended eliminating the program because it is “expensive and not shown to be effective.”
EZs ARE PRONE TO ABUSE: EZs have spawned a cottage industry of consultants that make their money trolling Zones and employers for tax credits. Companies can claim an EZ tax credit retroactively for employees they hired over the last four years, even if that employee has left the job. Employers get free money without creating any new jobs while the consultants take a contingency cut. These consultants are the worst examples of abuse of taxpayer dollars.
EZs REWARD LOW ROAD EMPLOYERS: Companies can claim hiring credits for new “hires” not new jobs created, rewarding employers with high turnover. Unscrupulous employers can close their facilities in one part of the state and move to an Enterprise Zone to claim EZ hiring credits for “new” hires. Responsible employers who are not located in Enterprise Zones are at a competitive disadvantage against employers located in an Enterprise Zone.
A LIVE EXAMPLE: The Teamsters Union has represented VWR employees in Brisbane for over 50 years. VWR recently announced they were closing their Brisbane location and moving to Visalia, located in the Tulare Targeted Tax Area, part of the EZ program. VWR is touting the hundreds of “new” jobs they’re bringing to the Tulare TTA where they will be eligible for hiring credits and all the other tax benefits of an Enterprise Zone. Our tax dollars subside VWR to destroy good union jobs, ravage the tax base of Brisbane and set up a non-union shop in another part of the state.
California Labor Federation
To sign-on, simply click here and e-mail us with our NAME, POSITION, PHONE NUMBER, and the NAME OF YOUR ORGANIZATION.
