State Senate Approves Enterprise Zone Overhaul

(Editor’s Update: Luke Dowling’s June 25 piece below references Governor Jerry Brown’s proposal to restructure California’s controversial enterprise zone program. Last night the state Senate approved Brown’s initiative to transform the program. The next move rests with the Assembly, which is considering a Brown-backed measure that would create an alternative to the program.)

The fight over California’s enterprise zone program continued last Friday when John Burton, chairman of the California Democratic Party, proposed a measure for the November 2014 ballot which would give voters the power to eliminate the zones.

This proposal echoes concerns contained in Frying Pan News reporter Gary Cohn’s exposé of the rampant exploitation of the enterprise zone program. These zones are intended to foster the creation of jobs in economically distressed areas of the state by providing financial incentives to companies to move to those areas. However, a study by the non-partisan Public Policy Institute of California found that “enterprise zones have no statistically significant effect on either business creation or employment growth rates.”

Moreover, Senator Jerry Hill (D-San Mateo) called the enterprise zones “the most abused program I’ve seen,” adding that they amounted to little more than “a big-industry, big-business tax grab.”

Burton is not the only high-profile California Democrat to come out against the zones — Governor Jerry Brown is staunchly in favor of dismantling them as well. However, Governor Brown’s proposal is more moderate than Burton’s, and suggests that the $700 million currently spent on the program instead be used for another, more effective job-creation program.