Revitalization Bills Roundup

20 Mar

While California, as a whole, may be on the path to economic recovery, certain regions of the State look to be in for a much longer and difficult road. Take Imperial County, which has the State’s highest unemployment rate [PDF] at 25% and a poverty rate [PDF] of 23%; or the counties of Merced, Fresno, Madera, Tulare, Kings, and Stanislaus, each of which have unemployment rates higher than the state average and poverty rates between 20-25%.  What new tools can be created at the state level to spur equitable economic development to some of our hardest hit communities?

This month, we examine efforts of state legislators from these areas to craft statewide policies and tools to stimulate economic growth in their communities. Let’s start with Assemblymember Victor Manuel Perez, whose District covers eastern Riverside and Imperial County and who has introduced two bills on the topic.

Dubbed the California Economic and Community Development Zone Act, AB 28 would make modest reforms to the state’s existing Enterprise Zone program (CEZP).  The CEZP has been widely criticized as a costly [PDF] program that has had little to no impact on the creation new jobs and benefits and rarely reaches the regions with the most need.

Governor Brown called for reform of California’s enterprise zones in his State of the State address earlier this year. Despite these criticisms, the CEZP remains one of the only economic development tools available to attract private investment in stressed areas of the state.

AB 28 aims to reduce the size and cost to the state of the CEZP program and ensure that incentives reach State’s most economically disadvantaged communities. This bill reduces the size and scope of new zones by: only including low-income census blocks, rather than census tracts in new zones; mandating that low household income be used as a criteria for determining economic distress of a new zone; and limiting the size of a new zone that includes area from an existing or previous zone.  AB 28 also attempts to increase accountability and transparency by stripping poor performing zones of their designation; tracking and reporting the use of local resources dedicated to zone activities; increasing the integration of zones in workforce development and training programs and expanding state level reporting.

Assemblymember Perez has also introduced AB 305, which creates a state equivalent to the federal New Markets Tax Credit program to encourage investments in low-income communities and leverage federal dollars.  The bill would make $200 million of tax credits available from 2013 to 2020 to investors who invest in community development entities, with the end goal of promoting economic revitalization and job growth in economically disadvantaged communities.

From rural Kern County, Assemblymember Rudy Salas aims to influence the flow of funds from Proposition 39 (the Clean Energy Jobs Act)  with AB 114. Governor Brown wants the revenue to go to energy retrofits of public schools, colleges and universities. A number of other legislators have bills that direct the funding to public schools and universities through various mechanisms. Salas’ bill takes a different track.  His bill would direct the $550 million in annual revenue generated by the passage of Proposition 39 this past fall to workforce development programs that benefit disadvantaged communities.

It is still early in the legislative cycle and many of these bills are likely to change. One thing that won’t change is the pressure to create more tools for cities across the state to attract the businesses and jobs that can deliver renewed economic prosperity. With Washington, DC holding our communities in sequester, the spotlight is on Sacramento to deliver.

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