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OCBC Opinon Editorial on EZs

IRVINE, CA — Orange County Business Council President and CEO Lucy Dunn issued the following oped regarding a recent Orange County Register editorial attacking enterprise zones:

As a business advocate, I was deeply concerned by your recent editorial that perpetuated many of the false claims made against enterprise zones in California.

Recently there has been misinformation circulating about the value of enterprise zones as a result of research from the Public Policy Institute and California Budget Project. The information provided by these groups does not accurately reflect the realities of enterprise zones. The truth is that more precise, thorough, and reliable studies have been conducted that easily refute the claims these organizations presented.

Here are the facts about enterprise zones in California:

Enterprise zones incentivize businesses to locate to underserved communities and hire employees who face obstacles to employment. Veterans, laid-off workers, government assistance recipients and challenged job seekers are eligible for a hiring tax credit.

In 2010 over 120,000 jobs were created in California because of enterprise zones.

In California’s enterprise zones, poverty rates have declined by an average of 8.6 points over 20 years, and annual wages have risen by approximately $3,000.

Approximately 18,420 workers who were previously on public assistance became self-sufficient when businesses employed them through the enterprise zone program.

The Employment Development Department recently reported that in 2010, California paid out $22.9 billion in unemployment insurance benefits to 1.7 million jobless workers.

Enterprise zones saved the Unemployment Insurance Fund more than $31 million last year alone by hiring people previously on unemployment. With the state’s Unemployment Insurance Fund nearly $10 billion in debt, these savings are even more important.

Santa Ana’s enterprise zone has been a resounding success. More than 1,733 businesses have been issued Hiring Credit Vouchers since the designation was awarded in 1993. Almost 2000 local businesses would be impacted by the elimination of the zone.

Enterprise zones are the ONLY business incentive tool that exists in California, where unemployment is at 12.3% and we face a $25 billion budget deficit. Businesses (and the jobs that go with them) are leaving California for greener pastures at an alarming rate because of the state’s red tape and stifling regulatory environment. Losing enterprise zones would be the final nail in the coffin for businesses and jobs in California.

The business community understands that the state’s massive budget deficit will require sacrifice by all Californians. However, in the effort to make the most expedient choices, what is needed to truly get California back on track to economic prosperity is being lost. The Administration’s proposal to eliminate enterprise zones is concerning for its near-sighted view of a program dedicated to job creation and economic revitalization.

The short-term savings to the state that would result from eliminating enterprise zones is around $900 million. But in Anaheim alone, the cost of losing their recently awarded enterprise zone would be about 25,000 jobs over the next five years. Not to mention the hit the state’s already deficit-stricken Unemployment Insurance Fund will incur. Eliminating enterprise zones just doesn’t add up.

Now more than ever we need programs that stimulate job creation and economic recovery to put California back on the path to prosperity. It’s only our future that hangs in the balance.

About OCBC:

Orange County Business Council is the leading voice of business in Orange County, California. OCBC represents and promotes the business community, working with government and academia, to enhance Orange County’s economic development and prosperity in order to preserve a high quality of life. OCBC serves member and investor businesses with nearly 250,000 employees and 2,000,000 worldwide. In providing a proactive forum for business and supporting organizations, OCBC helps assure the financial growth of America’s fifth largest county. For more information, visit www.ocbc.org.


Posted on February 27, 2011

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