California Doesn’t Need Enterprise Zones

Since 1986, California has used an “enterprise zone” program in an effort to spur investment and job creation in specified areas. The state awards tax credits, more than $700 million a year as of 2010, to businesses that hire designated kinds of workers within the zones. The program is popular with businesses and local officials.

Unfortunately, it doesn’t appear to create jobs. A 2009 study by the Public Policy Institute of California found no difference in job creation between zoned and comparable unzoned areas. Given this finding, Governor Jerry Brown wisely tried to ax the program in his 2011-2012 budget, and is now working to scale it back. He is meeting strong resistance. (Brown succeeded in 2011 in getting rid of another wasteful program aimed at “depressed” areas: 400 regional development agencies.)