Officials back from Sacramento lobbying trip
A small group of city and county delegates traveled to Sacramento Thursday to lobby for the California Enterprise Zone program.
Porterville mayor Virginia Gurrola, city manager John Lollis, and Lori Dunigan, business development director for the Tulare County Economic Development Corporation, attended a public hearing on the matter.
The hearing was the last of four conducted by the California Department of Housing and Community Development and was held to consider public input on Gov. Jerry Brown’s proposal to reform the program that is designed to encourage business development and new jobs by giving employers tax breaks for hirings in economically depressed areas.
Most of Tulare County and its eight incorporated cities make up the Sequoia Valley Enterprise Zone, established in 2010. Businesses locating, expanding or doing business in the zone qualify for various tax incentives, including a $37,000 state tax credit for each qualified employee hired over a five-year period.
Brown’s regulatory reform, outlined in his 2013-14 budget, would limit retroactive vouchering — requiring all voucher applications to be made within a year of an employee’s hire. The new rules would also streamline the vouchering process for hiring veterans and recipients of public aid, and would require third-party verification of employee residence within a Targeted Employment Area — an area made up of census tracts where at least 51 percent of its residents are low- or moderate-income levels.
Local officials say Brown’s plan would harm small business and economic development.
“I went up there to represent the unincorporated cities in Tulare County that are part of the Sequoia Valley Enterprise Zone,” Gurrola said, adding that she highlighted four points in her public testimony.
“One was that the enterprise zone offers an economic development tool that can assist in reducing unemployment in Tulare County” she said.
Her second point, which she said was important to the small group, was where the public hearing took place.
“The Central San Joaquin Valley has 25 percent of enterprise zones in the area, yet we had no hearings [there],” she said. “They were in Los Angeles, San Diego, and the Bay Area so our business people, especially our small businesses, could not come and testify on how the enterprise zone has assisted them.”
Gurrola said she also spoke of how the proposed changes, specifically the limits on retroactive vouchering, would harm small-business owners. Under Brown’s proposal, all voucher applications would have to be made within a year of an employee’s hire.
“We’re proposing it be at least two years to allow them time to meet those regulatory requirements,” she said.
Lastly, she said while she agrees the program can be improved, “we don’t want to restrict it to the point where it’s not viable to those individuals that are directly benefitted from enterprise zone which are the employers.”
The HCD reports that 64 percent of enterprise zone tax credits have been claimed by corporations with more than $1 billion in assets, while only four percent of credits are claimed by small businesses with less than $10 million in assets. Without today’s reforms, the Franchise Tax estimated that Enterprise Zones would cost California $700 million in the coming fiscal year, an HCD press release issued in early January states.
“Part of it is there has been abuse within the enterprise zone; well, we here in the South County don’t see that. We see our businesses are using them and it’s opening doors to additional employees, additional money goes to our sales tax, it helps create jobs, it helps the economy and stabilizes it and it helps us diversify our employment base, too,” Gurrola said.
While the mayor walked away without a response or rebuttal, she said she felt the meeting was productive because she was able to represent the area.
To further support the enterprise zone program, the Porterville City Council will consider adopting a resolution of support for the program at its next regular meeting, set for 6:30 p.m. Tuesday, in the council chambers at City Hall, 291 N. Main St.
Contact Denise Madrid at 784-5000, ext. 1047. Follow her on Twitter @DeniseMadrid_.