Todd Ament is sounding the alarm that Anaheim's Enterprise Zone is in jeopardy. According to a press release by the Chamber "Today, the Senate Budget Committee is expected to meet and adopt Assembly Bill 93 – the Governor’s May Budget Revise plan that guts Enterprise Zones as we know them."
This would mean a drastic reduction in the Anaheim Chamber's budget. Why? Because if you didn't know, the Anaheim Chamber is paid millions by the city to maintain the program. Here is an excerpt from the Voice of OC which shines some light on the subject:
The original sole-source contract, which started Feb. 1, 2012, was worth $1.8 million over five years and includes processing tax credit applications, contacting local businesses about the zone and marketing the program at trade shows and other events.
The council then voted last month to increase the contract to $2.9 million after city staff cited a need for the chamber to hire more staff to handle the workload and to assume sponsorship of some community events.
Mayor Tom Tait objected to the contract increase, questioning why his colleagues on the council couldn’t wait a few more weeks for an audit of the zone’s management to be completed.
“We’ve got this audit that we’ve paid for that’s about ready to come back, and now we’re going to extend the contract and increase it?” Tait asked. “It makes no sense to go forward with this at this time.”
Here is an excerpt from the CA Labor Fed which explains the issues with Enterprise Zones:
The best independent research finds that California’s Enterprise Zone (EZ) program fails at creating new jobs and economic activity. Despite the damning evidence, the EZ tax break program has enjoyed unchecked growth of 35 percent annually—costing the state $3.6 billion since it started in 1986.
To make matters worse, companies do not have to create a single new job to get a tax break in an EZ. EZ credits are given for new hires, not new jobs, so companies are rewarded for high-turnover, low-skill jobs. The structure of the credit incentivizes churn rather than stable employment and the creation of job ladders.
The EZ program creates an additional incentive for low-wage jobs that pay so little workers still rely on public programs like food stamps. Since the EZ credit is only given up to a cap of 150% of the minimum wage, employers do not have to pay a living wage to get the credit. The EZ offers no reward for higher wage jobs.
Since tax breaks are only available within the Zone, communities are pitted against each other to attract roving businesses. The impact can be devastating on communities and a huge boon to unscrupulous employers that shift jobs around the state, while penalizing responsible employers that pay workers a decent wage with benefits.
I hope Governor Brown is successful in shutting down yet another corporate welfare program. I'm especially pleased that one of Pringle's goons, Todd Ament, is on the losing end of this deal.