Lawmakers Debate Whether to Overhaul or Abolish Enterprise Zones

The question facing California lawmakers is whether to overhaul or eliminate enterprise zones. The zones provide tax breaks to businesses located within their boundaries as a way to spur economic and job growth.

Governor Jerry Brown doesn’t want to fix the enterprise zone program. He wants to eliminate it. H.D. Palmer with the Department of Finance says the program doesn’t create new jobs, it just moves old jobs around.

“And that’s why the governor believes it’s important to move away from that concept and work towards a sales tax exemption on the purchase of manufacturing equipment,” he says.

But Democratic Senator Jerry Hill says the enterprise zone program should be fixed, not eliminated. He‘s authored legislation that would increase transparency in the program.

“My legislation will require all 40 enterprise zones in the state to disclose the amount of tax payer dollars the business is receiving,” he says.

Hill’s bill would also require businesses to create new jobs and pay at least $16 an hour to qualify for the program.

Enterprise Zone advocates say eliminating tax credits in a high-tax, high-regulation state could drive business out of California.