Enterprise zones refute PPIC report

SACRAMENTO
June 11, 2009 9:59am

The importance and successes of enterprise zones are substantiated by research from Charles Swenson from the USC Marshall School of Business, says the California Association of Enterprise Zones.

The association issued a press release about the USC research on Thursday, following publication of a report by the Public Policy Institute of California questioning whether the zones are worth their cost in tax revenues.

“When you look at the whole picture – the enterprise zone program is an essential tool for economic growth in California,” says Craig Johnson, president of the California Association of Enterprise Zones. “The program delivers measurable benefits to our state by creating jobs and business growth opportunities for economically disadvantaged individuals and communities.”

Mr. Swenson’s research shows that the enterprise zone program decreases unemployment rates, boosts wage, salary and household incomes and decreases poverty rates, the association says.

“What this paper demonstrates is that to evaluate an enterprise zone program’s economic impact, we need to look at a number of outcomes – job growth, unemployment rates, income levels, business retention,” says Mr. Swenson in written comments provided by the association. “In the empirical study which I co-authored, we in fact found that the California Enterprise Zone program reduced unemployment rates, and increased incomes. This latter effect is consistent with increasing wages of EZ residents."

Mr. Johnson says focusing on job creation and supporting “successful economic development initiatives like the Enterprise Zone Program will ensure an expanding job base, revitalize distressed communities and keep businesses in California.”