Dear CAEZ Members and Friends of CAEZ,

The Enterprise Zone program is once again in jeopardy.  Senate President Pro Tem Darrell Steinberg (D-Sacramento), has introduced SB 974, which would be extremely detrimental to the Enterprise Zone program and make it useless for most California companies.  

SB 974 proposes to create a "career pathways" tax credit, in an effort to enhance career technical education efforts in the state.  However, this new tax credit is paid for by eliminating the Targeted Employment Area from the list of eligible criteria for the hiring credit and retroactive vouchering for all employees hired after January 1, 2011.  The elimination of the TEA will specifically target neighborhoods with some of the highest levels of unemployment, poverty rates and crime in California and eliminate an important incentive for businesses to remain in those communities and hire local residents.  Additionally, by eliminating an important hiring incentive, the cost of doing business increases significantly.  California has already been crowned, once again, as the worst state to do business in and this bill only tightens our grip on the title.

Voucher retroactivity is effectively eliminated by the requirement that all hiring credit vouchers be completed within 28 days of the date of hire; an unrealistic expectation at best.  This provision effectively eliminates small business owners from participating in the program, as they will find this arbitrary and impractical deadline an impediment that makes participation in the program almost impossible.  As a result, those businesses with the greatest growth potential and therefore California's best hope for reducing our historic unemployment rate, will be left out of the program.

The bill also caps the amount of tax credits available to Enterprise Zone businesses.  This will launch an unprecedented scramble among EZ businesses to compete against each other to get their voucher applications submitted as quickly as possible.  And woe to the company that follows the rules, fills out the forms, meets the filing deadline, but is still left holding the bag, because the tax credit cap has been reached.  Sorry, you're out of luck.  Try again next year.  Only government would come up with an idea like this!  No wonder California companies are easy pickens' for business recruiters from Arizona, Texas, Nevada, Utah, North Carolina, etc., etc., etc.

This bill is very similar to AB 1139, from last year.  This bill hides behind the noble idea of creating a program designed to help high school students receive training for technical jobs that don't exist in California.  There has been a concerted effort by the labor unions over the past several months to eliminate the program and I believe this is a bill they would like to use to achieve that objective.

So, what can you do?  Write Senator Steinberg today!  SB 974 passed out of the Senate Appropriations Committee today and is headed to the Senate floor next week.  And write your local Assembly member and Senator, letting them know how important the Enterprise Zone program is to your community, your businesses and your clients.  The state budget crisis continues unabated and every program will be on the table for discussion.  If the EZ program is to survive budget negotiations, it's up to us to let Sacramento know how important this program is to California's economy.  Approximately 10% of all jobs in California are located in Enterprise Zones.  That's over 1.5 million jobs and billions of dollars of payroll that currently contribute to distressed communities across the state.

Click here for a sample letter for you and your EZ businesses to use.  USE IT!!  Your overwhelming response last year to AB 1139 was the determining factor in turning back that pernicious bill.  I need you to exert the same effort against SB 974.

Should you or any of your EZ businesses require assistance in the preparation of the letter, or have any questions about how to determine who your Legislators are, please email CAEZ at:  action@caez.org or call 530.830.CAEZ (2239).

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

Sincerely,

CRAIG JOHNSON
President
California Association of Enterprise Zones

Dear CAEZ Members and Friends of CAEZ,

As you know, the Enterprise Zone program continues to come under close scrutiny in Sacramento and there are calls from Legislators and Administrators to severely limit the program or eliminate it.  We have two important allies, among many, in our fight to maintain and preserve the program; Assemblyman Manuel Perez, Chairman of the Assembly Economic Development & Jobs Committee and Senator Lou Correa, member of the Senate Business, Professions & Economic Development Committee.  

Now, more than ever, it is imperative that our state Legislators hear from Enterprise Zone businesses.  I've attached a sample letter for you to share with your EZ businesses and EZ business clients, that they can mail to Assemblyman Perez and Senator Correa (the address is the same for both).   Also encourage your businesses to address this letter to their local Assemblymember and Senator.  Nothing influences Legislators more than hearing from their constituents.   The Enterprise Zone program may be at a crossroads in Sacramento and CAEZ members and businesses need to be heard from.  If we don't fight to protect and preserve this program, no one will.

I urge you to contact at least 10 EZ businesses, asking they write letters sharing what the program has done for them.  This will produce an unprecedented number of letters from around the state and give Legislators pause as they consider a myriad of options in their state budget negotiations.  

Should you or any of your EZ businesses require assistance in the preparation of the letter, or have any questions related to contacting members of the Legislature, please email CAEZ at:  action@caez.org or call 530.830.CAEZ (2239).

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

Sincerely,

CRAIG JOHNSON
President
California Association of Enterprise Zones