Riverbank's enterprises zone has helped create close to 500 jobs and brought local employers $6.1 million in tax credits since its creation in July of 2006, said city Economic Development and Housing Director Tim Ogden in commenting on Governor Jerry Brown's proposal to eliminate the program.
Bill Bassitt, chief executive officer of the Stanislaus Economic Development and Workforce Alliance, also is a supporter of enterprise zones claiming they form the best incentive system he has seen in 30 years.
In 2010, according to Bassitt, more than 560 companies in the county inquired about hiring new workers under the enterprise zone tax credit system. And of that number 116 businesses created 686 new jobs and 476 jobs were retained.
While enterprise zones in California were first created in 1986, Riverbank did not acquire one until 2006 but it now covers 96 percent of all the commercial and industrially zoned land in the city and is the largest in the county. Patterson has 60 or 70 percent of its land in a zone and is second in size to Riverbank, said Ogden.
Established to help businesses locate, expand and create jobs in economically disadvantaged areas, the program consists of five tax incentives: a property depreciation deduction in the first year, an interest deduction for lenders, a net operating loss carry-over to future years, a sales tax credit, and most important, a hiring credit for 50 percent of an employee's first year wages over a five year period, up to $26,000 per new hire.
In 2010, 24 businesses here used the hiring tax credit for 143 jobs, said Ogden.
"The larger businesses in the Crossroads are all on the list as recipients of the sales tax credit. Three industrial tenants in town have used the sales tax credit for equipment. Monschein's, for example, could use it to get a new drill. A dental office could help finance computers with it."
Reports by both the 2008 Public Policy Institute of California in 2008 and by the non-partisan Legislative Analyst's Office in 2010, however, concluded that enterprise zones have little if any impact on the creation of new employment.
Eliminating the zones on the other hand, state officials note, would save the budget an estimated $343 million for the fiscal year 2010-2011 and another $581 million in the next financial year.
Brown's budget is also proposing to phase out redevelopment agencies such as that which financed the rehabilitation of downtown Riverbank with installation of new sewer, water and storm drainage pipes plus street improvements and building of the Plaza del Rio. But redevelopment funded by tax increments has more statewide support and municipal agencies will put up a much bigger fight for that system than for the humbler enterprise zone, Ogden predicted.
Bill Bassitt, chief executive officer of the Stanislaus Economic Development and Workforce Alliance, also is a supporter of enterprise zones claiming they form the best incentive system he has seen in 30 years.
In 2010, according to Bassitt, more than 560 companies in the county inquired about hiring new workers under the enterprise zone tax credit system. And of that number 116 businesses created 686 new jobs and 476 jobs were retained.
While enterprise zones in California were first created in 1986, Riverbank did not acquire one until 2006 but it now covers 96 percent of all the commercial and industrially zoned land in the city and is the largest in the county. Patterson has 60 or 70 percent of its land in a zone and is second in size to Riverbank, said Ogden.
Established to help businesses locate, expand and create jobs in economically disadvantaged areas, the program consists of five tax incentives: a property depreciation deduction in the first year, an interest deduction for lenders, a net operating loss carry-over to future years, a sales tax credit, and most important, a hiring credit for 50 percent of an employee's first year wages over a five year period, up to $26,000 per new hire.
In 2010, 24 businesses here used the hiring tax credit for 143 jobs, said Ogden.
"The larger businesses in the Crossroads are all on the list as recipients of the sales tax credit. Three industrial tenants in town have used the sales tax credit for equipment. Monschein's, for example, could use it to get a new drill. A dental office could help finance computers with it."
Reports by both the 2008 Public Policy Institute of California in 2008 and by the non-partisan Legislative Analyst's Office in 2010, however, concluded that enterprise zones have little if any impact on the creation of new employment.
Eliminating the zones on the other hand, state officials note, would save the budget an estimated $343 million for the fiscal year 2010-2011 and another $581 million in the next financial year.
Brown's budget is also proposing to phase out redevelopment agencies such as that which financed the rehabilitation of downtown Riverbank with installation of new sewer, water and storm drainage pipes plus street improvements and building of the Plaza del Rio. But redevelopment funded by tax increments has more statewide support and municipal agencies will put up a much bigger fight for that system than for the humbler enterprise zone, Ogden predicted.
