SACRAMENTO – Communities to Save Enterprise Zones today issued the following statement from their counsel, Marty Dakessian, in response to the Enterprise Zone proposals in Governor Jerry Brown’s May revision of the California State Budget:
“Communities to Save Enterprise Zones is strongly opposed to this new Enterprise Zone proposal,” said Marty Dakessian, counsel for Communities to Save Enterprise Zones.
“While we continue to analyze the details of the Governor’s May revision, our initial perspective is that the Governor’s proposal with respect to Enterprise Zones is not much better than the Governor’s January proposal to retroactively repeal the tax credits,” Dakessian, who also serves as a partner with Reed Smith LLP.
“In fact, the Governor’s new proposal amounts to an illegal billion dollar tax increase on businesses. It would effectively eliminate the program’s benefits, eviscerate its value and burden businesses by replacing it with another hoop-laden program that does nothing to benefit the budget, the economy, workers, businesses or the communities they live in,” Dakessian continued.
He concluded, “The Governor’s new proposal is a continued attack on small business because it takes away promised benefits and penalizes employers for creating jobs in the state. It fails to recognize job retention as an important factor in our economic recovery, reduces tax credits for new jobs thereby reducing incentives for new hires, creates conflicting bureaucratic hoops that would make it difficult for business owners to collect on tax credits. Finally, because it limits carryforwards and violates the contracts clause, it is still clearly unconstitutional.”
Communities to Save Enterprise Zones is a coalition of more than 500 local elected officials, businesses, community leaders and organizations.
California’s Enterprise Zone Program is one of the State’s most vital programs aimed at creating jobs and reducing poverty. This program enjoys widespread support from Democrats and Republicans, businesses, chambers of commerce, taxpayers, and local government.
Repealing the Enterprise Zone Program will harm the very communities that are hurting the most in this recession, would amount to an increased tax on businesses, and is illegal because it would violate the Due Process and Contracts clauses of the United States Constitution.