The Anaheim Chamber of Commerce issued a statement last week from CEO Todd Ament blasting Governor Jerry Brown for signing AB 93 and SB 90:
“Today, Governor Jerry Brown is signing AB 93, which abolishes the last real economic development tool available to California cities: the California Enterprise Zone program. Despite countless success stories and the creation of jobs for hundreds of thousands of people with barriers to employment, the Governor and many of our state legislators have been swayed by the unions to eliminate an effective tool that creates, retains and attracts jobs in California.”
“In 2009 Anaheim was suffering from double-digit unemployment rates. The City of Anaheim, with support from the Anaheim Chamber, took the initiative to apply for an Enterprise Zone designation, which was granted in 2011 and became active in February 2012. Since that time, the Chamber has processed nearly 3,000 vouchers, each representing a new job created in Anaheim, provided 28,414 businesses with assistance that has protected thousands of jobs, and met with more than 200 businesses from a variety of industry types that were interested in locating to the Anaheim Enterprise Zone.”
“We were pleased to learn from many high ranking officials in Sacramento, including in the Governor’s office, that the Anaheim Enterprise Zone exemplified the very best of what was expected from Enterprise Zones to successfully provide employment and was widely considered the very best of the state’s 42 zones.”
“AB 93 was rife with contradictions and in need of many clarifications that have been addressed in Senate Bill 90. We expect as the year passes, additional bills will be introduced to address these issues, however based on our current understanding of AB 93, here is how the new tax program will affect businesses and job seekers in Anaheim after Dec. 31, 2013:
• The current Enterprise Zone program will be repealed and any hiring credits and Sales and Use Tax (SUT) credits earned will be under a new program administered by GO-Biz and will not go through the current Anaheim Enterprise Zone administrators.
• The hiring credit will be severely limited. The types of businesses and categories of employees that qualify for the credit will again be severely limited. Additionally, the amount of wages the credit is calculated against will be drastically cut and the credit will only apply to ‘net new jobs.’
• The Sales and Use Tax (SUT) will be available only to a very limited number of industries, will only allow for state portion of sales tax, and will be an exemption not a credit. This credit will sunset on July 1, 2022.
• The tax credits earned prior to the end of the year will have a 10-year carry over period from the end of the year.
“The Anaheim Enterprise Zone continues to work with our legislators, state agencies, and advocacy groups to assure a smooth transition for winding up the Enterprise Zone program and help maximize its benefits to businesses and job seekers. The above information is based on our current understanding of AB 93 and as always, we suggest businesses contact a tax consultant for specifics. We will continue to provide information about the changes as they become available.”
“Though the loss of the Anaheim Enterprise Zone does eliminate a powerful tool for job creation in the city, Anaheim is still a strong competitor in the marketplace. With our own public utilities, access to higher education institutions and an educated workforce, healthy supply channels, a strong infrastructure, workforce training programs through Anaheim Jobs, and our central location, Anaheim remains a leading place to do business.”
“The tragic consequence of AB 93 is that thousands of people with barriers to employment will now struggle to find job opportunities that were available through the Enterprise Zone program and companies that made critical business decisions based on the State’s commitment to the Enterprise Zone program will now be faced with nothing but broken promises.”