California assemblyman Juan Arambula split with the democratic party [some language from article about his history as being moderate]. Assemblyman Arambula has authored legislation dictating strict reporting requirements for California’s Enterprise Zone. His legislation was widely seen as positive in that it required the Enterprise Zone to keep better record so the tremendous benefits of the Enterprise Zone tax credit program can be more fully understood and documented. This will go a long way to quieting detractors of the enterprise zones when the benefits will be fully reported.

Today, the FTB released the list of cities and district sales tax rates for numerous cities and counties around the state. The FTB also announced that BOE “Specialists” will be canvassing certain zip codes to enforce the business permits to ensure tax compliance.

• New Local Sales Tax Rates Take Effect July 1
• California State Board of Equalization Specialists Verify Business Permits

The Enterprise Zone continues to have a powerful effect on how local businesses in California save money and grow their revenue.

“When you look at the whole picture – the enterprise zone program is an essential tool for economic growth in California,” says Craig Johnson, president of the California Association of Enterprise Zones. “The program delivers measurable benefits to our state by creating jobs and business growth opportunities for economically disadvantaged individuals and communities.”

Mr. Swenson’s research shows that the enterprise zone program decreases unemployment rates, boosts wage, salary and household incomes and decreases poverty rates, the association says.

“What this paper demonstrates is that to evaluate an enterprise zone program’s economic impact, we need to look at a number of outcomes – job growth, unemployment rates, income levels, business retention,” says Mr. Swenson in written comments provided by the association. “In the empirical study which I co-authored, we in fact found that the California Enterprise Zone program reduced unemployment rates, and increased incomes. This latter effect is consistent with increasing wages of EZ residents.”

The practice of hiring individuals with a criminal record is always controversial, however with the current state of the market, the state of California offers local businesses tremendous tax benefits for these employees.  A good example of a city taking advantage of this principle is Oakland.  Because much of Oakland is designated as an “Enterprise Zone” by the state, employers can save tens of thousands of dollars in state taxes, according to Susana Villarreal, the city’s enterprise zone coordinator.  Employers can deduct up to 50% of the employee’s wages from state taxes by hiring people who fit certain criteria, Villarreal said. Those qualified employees include ex-offenders but also veterans and those on certain federal programs.

As he put in the subject line of his email “Them Changes” are happening at HCD. Frank Luera, head of California’s Economic Development Section in charge of the Enterprise Zone program recently announced that he is retiring from the HCD. Few individuals have been more involved or more instrumental in the Enterprise Zone program. Frank worked tirelessly to advance the Enterprise Zone program. I even recall getting email responses from him late and night and on weekends. How many government officials can you say that about!

Frank did not let on regarding what his future holds, but left his options open. His last day with HCD will this Friday, June 19. At C&I, we want to thank Frank for all of his insight and hard work and wish him well wherever he may end up.

With the current economic conditions, companies that are commissioned with local economic development are planning to utilize California’s Enterprise Program to attract new businesses.  Redding.com has reported the following:

With the recession forcing many companies to put expansion plans on hold, the EDC is focusing more on business retention, O’Sullivan said, promoting the Shasta Metro Enterprise Zone, which gives hiring credits to businesses.

In the past year, the enterprise zone has grown from about 800 credited employees to 1,300 credited employees, accounting for $13.5 million in hiring credits to companies, O’Sullivan said.

The Calexico region is beginning to get national coverage in its push for economic development.  And taking the forefront of the city’s efforts is the California Enterprise Zone program.  The New York Times reported this past week:

“Other new commercial developments are also on the drawing board in Calexico, said Danny Fitzgerald, director of the city’s enterprise zone. Projects under way include Calexico Mega Park, a 157-acre mixed-use retail, business and residential development by Westmount Properties; Calexico 111 Center, with more than 65 acres of commercial and 58 acres of industrial development; and Los Legos, some 500 acres that will include residential and commercial components.”

This national exposure for the EZ program benefits continues to reveal the importance of these tax benefits.

The competition for new Enterprise Zones is heating up this year, and one of the cities still waiting to hear about its approval is Needles, CA.

And the Needles Desert Star is reporting the wait is not over, “The city of Needles will have to wait a little longer to find out if it has been awarded enterprise zone status. The announcement, expected on May 18, has been delayed until some time in June. California Department of Housing and Community Development has informed the city that winners have not yet been selected.”

With only four enterprise zones being designated this year, 14 new city applicants will go without the coveted program benefits.  The city is pushing for the designation in order to augment its current strategy to attract new businesses to the region.

Here is Craig Johnson’s recent retort in support of California’s Enterprise Zones. Enjoy the audio.

Dear CAEZ Members & Friends of CAEZ,

In response to the PPIC report, which was making it’s debut in Sacramento today, I appeared on San Francisco radio station KQED this morning along with one of the co-author’s of the study, Jed Kolko. The audio of the show is linked below.

Click for Audio

We will continue to face the slings and arrows of our foes throughout the remainder of the legislative calendar and I urge each of you to be prepared to share the many successes of our program.

Thank you all for your continued support of the program and CAEZ.

CRAIG JOHNSON
President
California Association of Enterprise Zones

CAEZ president Craig Johnson wrote this letter today to the local Enterprise Zone community:

Dear CAEZ Members and Friends of CAEZ,

Following the legislative hearing for AB 1139 on April 29, CAEZ pledged to work with Assemblyman John Perez and the sponsors of AB 1139. To that end, the attached letter was mailed this morning to Assemblyman Perez and all of the Members of the Assembly Committee on Jobs, Economic Development & the Economy. This letter addresses the numerous inaccuracies cited by the supporters of the bill, corrects the record about the program, it’s structure, mission and accomplishments.

CAEZ continues to monitor legislative activity in Sacramento that may affect our program, especially as the Legislature continues to grapple with record budget deficits. I will keep you apprised of any urgent matters that require a call to action of our Membership. Your response to AB 1139 assures me of your commitment to the defense of our program during perilous times.

Thank you again for your continued support of the Enterprise Zone program.

Sincerely,

CRAIG JOHNSON
President
California Association of Enterprise Zones