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Governor Announces Economic Development Plan

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Sacramento, CA — Governor Jerry Brown is proposing to shift money away from the 30-year-old Enterprise Zone program.


The $750 million program creates tax incentives for employers that create jobs in blighted or underprivileged communities. The Governor feels the current program has become “wasteful” and an “inefficient” use of taxpayer dollars. Brown says he would like to see the money shifted to programs that could help the manufacturing, research and development, and biotechnology sectors.


The Governor’s Office has released the following information on how Brown would like to see the money re-directed:


Sales tax exemption: A statewide sales tax exemption on manufacturing equipment or research and development equipment purchases by firms engaged in manufacturing or biotechnology research and development. The proposal is estimated to provide sales tax exemptions worth over $400 million annually.


Hiring credit: A hiring credit targeted to businesses located in areas with the highest unemployment rate and poverty. This credit will be available for the hiring of long-term unemployed workers, unemployed veterans and people receiving the federal earned income tax credit. The credit will only be allowed to taxpayers who have a net increase in jobs. The proposal is expected to provide approximately $100 million annually in hiring credits.


Investment incentive: The California Competes Credit based on specified criteria including the number of jobs to be created or retained and a set job retention period. This component of the proposal is expected to provide between $100 million and $200 million per year in tax credits.


Details of the plan were released this week while Brown met with Silicon Valley leaders.

  • Governor Jerry Brown
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