Excerpted from Sacramento Business Journal
July 3, 2013

In this Friday’s print edition, I take a closer look at whether Gov. Jerry Brown’s decision to kill the state of California’s enterprise zone program will actually work. The controversial decision to phase out the program and replace it with a range of other incentives was a hot topic last week when the California Legislature approved the governor’s reforms.

But they initially didn’t address hiring credits at closed military bases such as McClellan Air Force Base and Mather Field. Under the Local Agency Military Base Recovery Area program, the state encourages businesses to relocate to one of California’s seven closed military bases and replace jobs lost during the base closures.

Lawmakers have seemingly changed their minds. The Assembly last week passed Senate Bill 90, a proposal that would extend tax credits for the base revitalization areas through 2021. The proposal has now returned to the Senate and could receive a vote later this summer.

The base revitalization program was similar to what the state did with enterprise zones. Firms could get at least $31,544 in tax credits for each worker hired and also claim sales tax credits if they buy up to $20 million in manufacturing supplies. The firms also had to be located within a certain geographical zone at bases.

According to Assemblyman Ken Cooley, a Democrat from Rancho Cordova who represents the joint Mather-McClellan revitalization area, the governor’s new economic programs didn’t renew tax credits for the base revitalization zones. “A major part in helping our local economy grow is protecting the tools we use to redevelop and reuse our former military bases,” Cooley said.

Christopher Arns covers state legislation, regulation and contracts, as well as economic news, international trade and economic development for the Sacramento Business Journal.


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