California's Enterprise Zone program retooled

Restrictions imposed on how companies receive tax credits

INDIO, Calif. - There are big changes on the way for California's Enterprise Zone program.
Last week, Gov. Jerry Brown signed legislation that restructures the program that's supposed to promote business growth in some of the state's economically challenged areas.

The Coachella Valley Enterprise Zone includes parts of Indio, Coachella, Mecca, Thermal  and Thousand Palms.

Part of the new law means businesses in the zone will find it tougher to get state tax credits for creating jobs and hiring people who are considered to have a barrier to employment, a group that includes the long-term unemployed, veterans and felons. In order to meet the new requirements, employees must be paid at least $12 an hour. 

AT Designs in Indio, a company that manufactures various medals, awards and souvenirs, decided to relocate a manufacturing plant from Mexico to the Coachella Valley six years ago, since it knew it could enjoy a 25 to 30 percent savings in annual operating costs as a result of the current enterprise zone credits.

"Without that, I know we wouldn't be here, because the owner wouldn't have set up shop, that was the biggest thing to help him," said George Bednarczy, general manager of AT Designs.

While the state is making it harder for businesses to qualify for tax credits in an effort to reduce waste in the Enterprise Zone Program, Mark Weber, the manager of the Coachella Valley Enterprise Zone, says the retooling of program will eliminate tax  credits for almost all of the local businesses currently participating in the program.

"We've done some analysis in our zone, and of the thousands of vouchers that we do on an annual basis, 1 percent will be able to be vouchered under the governor's, quote, new enterprise program," Weber said.

Weber says businesses need to contact his office to make sure they get all the credits they've earned before the current program expires in January.

comments powered by Disqus

Photo Galleries