| The state declared five new enterprise zones today. The big news was that Sacramento has been declared an enterprise zone, but Hesperia, Tulare, Pittsburg and Taft were also on the list. Good thing for all the folks out of work, right?
Well, not so much. To put it simply, enterprise zones don't work. They never have, and won't start now. And we have some good data on that from right here in California from the PPIC. A snip from the accompanying press release:
The PPIC report contrasts employment growth in enterprise zones with comparison areas and concludes that the program, on average, has no effect on job or business creation. The report recommends a re-examination of the program, which offers tax credits and incentives to businesses in 42 designated zones throughout the state. The program's cost in the next fiscal year is estimated at nearly half a billion dollars.
We're handing out half a billion dollars and getting what in return? A good feeling and a hope that some jobs will show up? The data shows that it doesn't work yet we keep pouring money down this rabbit hole. Why?
The cynical answer would be to say because these things sound good. Conservatives love it because they include a bunch of tax breaks. Progressives usually tolerate them because they are focused on disadvantaged communities. But in the end, the money gets pocketed without actually doing anything to accomplish the stated goal: increasing employment.
It is well past time, considering all the cuts we've made, to reconsider the enterprise zones and whether they are worth retaining at all. Policy experiments are good, but we must understand when we need to kill them.
UPDATE: To emphasize how big this is, and how much of a waste it is, take this for scale. If the state eliminated it, there'd be enough money to restore all the cuts to the Healthy Families program and the recent budget's 2009-10 cuts to the CSU. Glad we have our priorities straight. |
