ANAHEIM : City OKs Plans to Vie for Enterprise Zone

The City Council this week unanimously approved plans to apply to the state for the creation of an “enterprise zone,” which would give business in the city various tax breaks.

Anaheim will join Santa Ana as one of 30 cities statewide vying for the five enterprise zones the state will award next year. Twenty cities already have enterprise zones. Anaheim’s proposal covers all of the city’s central and northeastern commercial and industrial zones.

“This zone would give a competitive advantage to business in this city at a time (when) they really need an advantage,” redevelopment director Elisa Stipkovich said.

But three members of the Western Service Workers Assn., a Santa Ana-based labor group, told the council that the zones should be abolished because they create “legalized slave labor” by holding down wages.

Pete Johnson, the leader of the group--which he said represents “traditionally unrepresented workers” such as domestics, independent contractors, and seasonal and temporary workers--called enterprise zones a “welfare program” for businesses.

The group was particularly critical of one tax break that allows businesses in the zone a tax credit of up to $19,000 to pay for the salary of every unemployed person they hire. Under that tax break, the maximum hourly wage that can be credited to employers is $6.37. Workers will likely be paid that amount as their hourly wage because the employers are not likely to pay more than what they are credited.

“That is not enough for housing or food, not to mention medical care,” Johnson said.

Sam Paredes, the state director for the enterprise zone program, said Wednesday that while the maximum wage credit is $6.37 an hour, the overwhelming majority of employees who work in enterprise-zone businesses earn substantially more.