Enterprise zone battle moves to state Assembly
SACRAMENTO — Gov. Jerry Brown’s controversial plan to overhaul state enterprise zones, approved by the state Senate, now heads for the Assembly, where it faces tough sledding possibly as early as Friday.
After major compromises with business groups, the bill passed 30 to 9 on Tuesday night. Three Republicans joined Democrats to give it a needed supermajority of two-thirds of the 40-member chamber.
The bill, AB 93, all but eliminates the $750-million-a-year, locally controlled enterprise zones and replaces them with a broader, statewide series of business incentives. Brown, who has been trying to junk the enterprise zones in their current form for the last two years, has criticized them as “wasteful” and “inefficient.”
Opponents, including managers of 40 enterprise zones, local government officials and companies that currently receive the tax breaks, are now vowing a big effort to preserve their incentive program.
They say they plan to fight first in an Assembly committee and then on the floor, to deny the governor the two-thirds vote needed for final approval in the Legislature.
“AB 93 effectively destroys the state’s only remaining tool for local governments to help stimulate economic growth and attract and retain jobs and replaces it with a half-baked plan full of empty promises.” said Craig Johnson, executive director of the California Assn. of Enterprise Zones and a Long Beach zone official. “We are confident that as enterprise zone-related legislation continues through the Capitol, lawmakers will come to see the critical role that enterprise zones play in California’s economy.”
The Brown administration is hoping that success in the Senate will give the bill enough momentum to overcome the influence of local enterprise zones with the lawmakers who represent them in Sacramento. To sweeten the deal, it already won approval for a number of amendments in the Senate that spread out the transition from the current enterprise zones to the overhaul.
Assembly Speaker John A. Perez (D-Los Angeles) has told his members to be on call for a possible weekend vote on the bill.
“The bipartisan vote in the Senate is a reflection that this is a solid economic-development proposal to create jobs in California,” said Jim Evans, a Brown spokesman. “The administration is working hard to ensure the proposal gets to the governor’s desk.”
Indeed, Brown spent much of the day Tuesday personally lobbying Republican and Democratic lawmakers. The administration and its allies are hoping the victory in the Senate will provide momentum to get the plan through the 80-member Assembly.
Proponents, a coalition of labor unions, Silicon Valley high-tech companies and pharmaceutical firms, want to see the state’s limited job-creation money used for more targeted purposes rather than being handed out by 40 locally administered enterprise zones spread around the state. The zones don’t create many new jobs, critics charged, citing a number of economic studies.
Brown’s proposal would redirect existing economic development funds, spending $400 million on a sales tax credit to boost manufacturing and biotech research and development, $200 million on updated enterprise zones that provide incentives for hiring the poor and unemployed, and as much as $100 million to reward specific businesses that relocate to California.
The zones, opponents countered, are fulfilling the program’s promise of persuading companies to invest in hard-to-hire workers, including the chronically unemployed, veterans and ex-convicts. They created 25,000 new jobs and saved 115,000 others from disappearing in 2012, they said, though the numbers are difficult to corroborate.
Twitter: @marclifsher
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