Wilson Seeks Breaks for Taco Bell, Other Firms

Gov. Pete Wilson proposed Monday that $110 million be set aside in the state’s deficit-strapped budget for tax credits to keep Orange County-based Taco Bell and other corporations from fleeing the state.

Wilson also predicted that legislation carried by Assembly Speaker Willie Brown to allow the business incentives, though snubbed by a Senate committee last month, would ultimately win approval by the Legislature.

The governor said the tax breaks would go far to keep the long-awaited California economic comeback from hitting the skids. Efforts to keep Taco Bell have also taken on particular weight in this election year because the company represents the sort of environmentally clean, profitable industry state leaders want to retain.

Officials at Taco Bell, which has been considering moving its Irvine headquarters to Texas, said they were pleased by the news.

“I think it’s a step in the right direction for California’s continued economic recovery,” said Jonathan D. Blum, vice president at Taco Bell Corp. “We’d like to wait and see specifically what it is that’s being proposed. But we’re encouraged by this development.”

Wilson proposed $45 million for tax credits in the 1994-95 fiscal year, which begins July 1, and $65 million for 1995-96.

Before the money can be allocated, the Legislature must approve a bill authorizing the tax credits.

Brown, meanwhile, has promised to revive his bill, which would provide a 6% investment tax credit for companies locating or expanding their headquarters in California. The tax breaks yielded by Brown’s bill would have been close to the $10 million in incentives being offered Taco Bell by Texas, making the move out of state no longer worth the expense.

The fast-food company has been looking for a new, larger site for its headquarters for nearly a year. Three months ago, it narrowed its search to Orange County and the Dallas-Ft. Worth area.