Anaheim's 'Enterprise Zone' Tax Giveaway Creates a Whopping 180 New Jobs in its First Year!

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This past Friday was the one-year anniversary of Anacrime's official designation of an 'Enterprise Zone' (AEZ), a nearly citywide effort under the auspices of the the Anaheim Chamber of Commerce to implement and market a business-friendly city with tax breaks to corporations.

This ruse was given the green light during the very same notorious gathering on January 24, 2012 where the contentious $158 million dollar GardenWalk Hotel Project subsidy was granted in violation of the Ralph M. Brown Act, but little to no outcry greeted it after.

The AEZ billed itself as an engine to stimulate growth and new jobs within its boundaries. So how is this favored tool of neoliberal urbanism (aka Gustavo's much-maligned Brave New Urbanists) performing one year later?

A big bunch of nada.

Anaheim had been seeking to become part of the larger California Enterprise Zone program since September 2010. By that time a number of studies, including a 2009 report by the Public Policy Institute of California that concluded "the enterprise zone program...has failed to achieve its key goal: increasing jobs," were critical of its efficacy.

Any such doubts were readily jettisoned by its local boosters. "The goal of the Enterprise Zone is to create new jobs and increase employment within the city by offering tax credits," Planning Director Sheri Vander Dussen said at the onset of her January 2012 presentation to the council. All five members at the time were convinced of its supposed virtues, including Democrat Councilwoman Lorri Galloway, and voted accordingly to enter in an agreement with the Chamber to the tune of roughly $1.76 million dollars, with up to an additional $50,000 for processing related vouchers.

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http://www.enterprisezonecpa.com
A map of Anaheim's 'Enterprise Zone'

The benefits touted before designation included up to $37,400 in tax credits for hires, sales and use tax credits for corporations that made machinery purchases up to $20 million and business expense deductions up to $20,000. "Chamber staff have already initiated efforts to develop AEZ marketing materials and programming," Anaheim Chamber of Commerce President/CEO Todd Ament chimed in a press release, "so that we can quickly initiate this critical effort to generate 20,000 Anaheim jobs in the next five years."

When asked by the Weekly as to how the AEZ was performing one year later, the City of Anaheim returned mostly vague statistics. "A total of 52 companies have participated in the program," Public Information Officer Ruth Ruiz relaid. "The businesses taking advantage of our program include manufacturers, medical offices/hospitals, delivery services, restaurant and retail operations."

The creation of new jobs and raising employment levels overall was a key part of the AEZ pitch. So far, the city has received nearly 1,800 vouchers as part of the program which translates into roughly 1,800 jobs. Only ten percent of those represent new jobs. For non-math majors, that's 180 positions that didn't exist before designation. If the AEZ were to perform on this front at the same pace over the next four years, it would net 9,000 jobs (900 new) and fall well short of Ament's stated goal.

The salary range given for the vouchers is between $8-$38 dollars per hour. When asked for more detailed information as to whether a majority of the new jobs were below a living wage, no clarification was given as of press time.

The AEZ encompasses a boundary zone that includes much of the city's industrial and commercial areas and 80% of all businesses operating in Anaheim. Is it attracting new companies and how much feeding is going on at the tax credit trough? "We do not have information on if the businesses are new or existing," Ruiz said, "or the amount of tax credits they are claiming."

The statistics should be readily available as under the terms of the contract, the Chamber is to "prepare and file annual reports" with the city that should include "the average hourly wage of the jobs created; and the number of businesses that have expanded or moved to Anaheim" as a result of the zone.

The five-year agreement can be revoked at anytime especially if the AEZ doesn't live up to its purported goals. The Enterprise Zone designation itself is set to last until 2027.

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