2009 California Enterprise Zone Conference

Before reading what happened at the 2009 CAEZ Conference, read the following update on the effectiveness of the EZ program and the latest debate on whether the USC EZ study or the UCI EZ study is the most accurate, as well as the latest legislative proposals:

http://www.ezpolicyblog.com/dr-swenson-responds/

The USC study concluded that job growth, real estate values and incomes rose in EZ’s and surrounding areas.  The USC study examined precise EZ borders, detailed employment data, salary and unemployment data as well as real estate values.  

The UCI concluded that there was no measurable increase in job creation within EZ’s.   However, the UCI study limited their analysis to job creation and used employment data from credit rating agencies, which generally measure job retention and creation via ranges for different size businesses – e.g. 0-5, 6 – 10, 11-20, etc.   Therefore, if an employer with 12 employees hired 5 new employees, they would fall within the 11-20 employee range and no net job increase or decrease  would be reported.  Obviously this skews the data. 

Another flaw in the UCI study is that they used incomplete and dated borders in defining highly specific EZ regions.  The EZ borders are very Gerrymandered and defined by census tracts; however, the UCI study used other criteria including zip codes to build their database for measuring job growth.

 

http://www.caez.org/Conference-2009/index.html

The annual California Association of Enterprise Zone (CAEZ) conference was held last week in Fresno, California.

The host committee executed a very informative and well-paced conference which was attended by over 160 attendees from Enterprise Zone cities throughout the state. 

Key attendees and speakers included:

     – John Nunn, HCD Enterprise Zone Program Director, attended all sessions and participated in a number of panel presentations.  Mr. Nunn provided the attendees frank and detailed information regarding the administration of the program on a historical basis and the changes he envisions for the future.   The thrust of Mr. Nunn’s remarks wast to encourage Zone Administrators and EZ consultants to communicate with HCD, FTB, legislators and other CAEZ members to document successes in their regions and develop improved economic development, workforce development and program effectiveness procedures.

James Dudley, Franchise Tax Board -  Enterprise Zone Director, discussed various settled and pending Enterprise Zone cases and the logistics of the Enterprise Zone audit process.   Mr. Dudley provided some useful information, but being realtively new in this role, he was a bit reserved in providing specific detail regarding the FTB’s processes or positions.

Assemblymember V. Manuel Perez, Chairman Jobs, Economic Development and Economy (JEDE) provided very positive comments about the work of the CAEZ board and members to preserve and expand the EZ program.  Assemblymember Perez discussed the many ways the EZ program benefits business owners in his district, as well as businesses and employees throughout the state.  Mr. Perez also cautioned the members that the legislators will require more accountability and refinements to the program to ensure that the taxpayers are getting an adequate return on their $300 million/ year investment in the program.  While there are studies which clearly show that employment, poverty and property values improve in incentive zones, conflicting studies, and legislative skepticism will require members to improve documentation and communication with their legislators.  He also cautioned us to anticipate some moderate reduced benefits in any final EZ legisaltion next year.

State Senator Roderick Wright -  Senator Wright provided us a highly entertaining keynote lunch speech which included a fascinating history of why California manufaturers have exited the state since the 1960′s.  Senator Wright provided a real insiders view of  Sacramento politics and how the legislators need to take a firmer stance against the tax-and-spend policies of the past few decades.

 

Toni Symonds, Assembly Consultant and EZ Expert discussed the outcome of the three JEDE legislative hearings, her excellent EZ whitepaper and the 100+ suggestions for improvement/ refinement to the EZ program which came out of the hearings.  The theme was for members to increase their pro-active communication to legislators, be open-minded with respect to reasonable refinements to the program  and share best-practices with other members.

In summary – the EZ program is alive and well, and the JEDE, HCD, FTB and CAEZ are all working together to spread the word to businesses in the 42 California Enterprise Zones and work to improve certaqin aspects of the EZ Program.   Documenting Program effectiveness will also continue to be at the top of all parties’ agendas.

 

Additional information can be obtained at:

http://www.ezpolicyblog.com/jede-committee-hearing-1082009-part-3/

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