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Gov. Brown Endorses Enterprise Zones

Loren Kaye
President of the California Foundation for Commerce and Education

OK, maybe not by his words – but certainly by his deeds.

At his premier policy address earlier this year, Governor Brown touted the business retention and expansion efforts by his GO-Biz office (“…directly assisted more than 5,000 companies this past year”), but then claimed the state’s Enterprise Zone Program is “not working.” His appointees are busily rewriting the rules of the program to narrow its application. And legislation will not be far behind.

Funny thing, though: a half-dozen of the recent business expansions or announcements hyped by the Administration have wound up in – wait for it – enterprise zones.

In the sentence of his speech immediately preceding his criticism of the EZ program, the Governor plugged his Administration’s efforts to woo three new Amazon distribution centers, creating thousands of jobs. Each of which landed in an enterprise zone: in Patterson, San Bernardino, and Tracy.

In the sentence immediately preceding the Amazon score, the Governor boasted that “GO-Biz persuaded Samsung to locate their only research and development facility in the world here in California.” Not mentioned: when the Governor visited the Samsung facility for the announcement: he was standing inside the San Jose Enterprise Zone.

The Governor also visited the San Diego Enterprise Zone when he celebrated the dedication of Soitec’s North American Headquarters, which “will produce concentrator photovoltaic modules for the U.S. renewable-energy market and employ 450 people, while supporting another 1,000 indirect jobs in the region.” Oddly – or maybe revealingly – the Governor’s Office press release claimed that “Soitec has not relied on any government funding for this project.”

When the Governor attended a “rollout of an all-electric delivery vehicle fleet” at the UPS facility in West Sacramento, those employees applauding the announcement owed their jobs in part to their location in an enterprise zone.

To be sure, the enterprise zone program is overdue for an update – Gov. Brown is right about that. Some carefully-drawn reforms could improve its transparency and accountability and eliminate some high profile – though rare – overreaches. But the program is one of the very few actual money-saving incentives that economic developers have to offer new business prospects. Want proof? Check out the GO-Biz catalogue of “California Business Incentives,” where the EZ program is highlighted right on the front page.

Follow Loren on Twitter: @KayeLoren

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