The Good News
The State of California has approved a long awaited proposal to expand the Sequoia Enterprise Zone in Tulare County this month effective immediately. The expansion will add acreage in several parts of the county where businesses are located or want to locate who can now take advantage of the tax incentives the zone offers. County Economic Development Manager Mike Washam say he expects several businesses to expand as a result. But if the state is offering in one hand they appear to be taking back with the other.
The Bad News
A new state plan to cut the size and tighten the rules for enterprise zones that offer tax incentives for business expansion in California has Valley officials worried they will result in job losses in the future. The new draft rules announced January 11 will impact the 40 zones in the state including Fresno,Tulare and Kings counties.
The zone benefits are targeted to economically depressed parts of the state to attract new companies and retain those looking to relocate out of the state of California.The Enterprise Zones (EZ) are a series of geographic areas in California where companies receive special tax breaks.
Right now many businesses in Tulare County,considered distressed because of its persistent high unemployment, can hire a new employee from any part of the county and potentially receive a tax credit.
But all that would change under the new rules.
“As we understand it, about 30 of 72 census tracts in the county would no longer be eligible for hiring credits” says Michael Washam.
If the employee lived in most neighborhoods in Visalia or Tulare for example, that have a higher income level than most of the county,that person would not be eligible for the tax incentives once these new regulations are in effect. The department that runs the program, Housing & Community Development, says they will take comment on the new plan until February 28, 2013.
Fresno County would be hard hit by the proposed regulations says Victor Bribiesca, manager of the local program for the Fresno EDC.”They would cut the number of eligible census tracts by about half” he says. ”That translates into employees who won’t qualify for jobs. I would call this plan devastating to Fresno County.” Kingsburg City Manager Don Pauley says the proposed cuts would hurt job psopects for Kingsburg residents whowould no longer qaulfy for employer tax incentives.