Fulfilling the purpose

Some government programs do not adequately fulfill the primary mission for which they were created. One of them is the Enterprise Zone Program.

Governor Jerry Brown’s effort aimed at modifying its regulations so the aid gets where it is needed most is laudable. It is very similar to the governor’s proposal to change the formula for distributing educational funds so they reach the neediest students. In the case of the Zones, the aim is to ensure job creation in the areas that need the jobs most.

The Enterprise Zone Program was created in 1986 to encourage business creation in economically distressed areas and create jobs for disadvantaged workers. At a cost of more than $700 million, the program provides tax credits, among other incentives.

The problem is that, according to studies by the Legislative Analyst’s Office and the Public Policy Institute, there is no evidence that the program helps create jobs in the neediest areas. Its regulations are inadequate, for example, by granting credit for new hires rather than for new jobs.

Like this, there are several factors that allow businesses to obtain benefits without fulfilling the original intent of creating jobs to improve the distressed regions.

Brown’s proposal corrects the regulations by limiting retroactive claims for the tax credit and refocusing on areas that are actually in need.

The change will also save money by reducing the program’s cost. This will undoubtedly help the budget, but that should not be considered its main motive.

The dissolution of the CRA and the inefficiency of the Enterprise Zones do not mean that their funding is unnecessary. There are many areas in California that need state assistance to create jobs and grow their economies. That is why incentives are needed so they actually fulfill the mission for which they were designed.