Gino DiCaro

Enterprise Zones Proven to Generate Positive Return On Investment for California! (From the California Association of Enterprises Zones)

By Gino DiCaro, VP, Communications

Capitol Update, July 1, 2003 Share this on FacebookTweet thisEmail this to a friend

A recently released "Cost-Benefit Analysis of California’s Enterprise Zone Program" conducted by Applied Development Economics (ADE), an independent economic research firm, has proven that the State’s Enterprise Zones are achieving their intended purpose by helping the most distressed areas of the state to stop decay and stimulate economic growth and job growth for California residents.

Enterprise Zones bring a significant net benefit to California – In the year 2002 alone, the state realized a net gain of $249 million to the State’s General Fund due to the Enterprise Zone Program, not even accounting for multiplier (spin-off) effects, which would double the revenues.

The "return" on the state program's investment is 1.35 times the State’s cost.

The State’s Zones create jobs and positive social benefits that equate to additional economic benefits for the State 44,000 individuals were vouchered (zone-eligible employment) in 2002 alone (182,000 total vouchered since program began). Many of these employees were previously drawing some form of public assistance. Over $40 million in cost savings to public assistance can be assumed in 2002 alone, plus these California residents are now earning income!

Zone employment growth far outpaces overall employment growth in California. Overall employment in California in 2002 is almost 117% of what it was ten years ago. In stark contrast, employment in Zones in 2002 is approximately 170% of what it was in 1992, almost a doubling of employment in a decade. Previous studies, such as the August 2001 study by the California Research Bureau, concluded, "California Enterprise Zones have grown jobs twice as fast as they would have without the zone incentive".

The average starting salary for Zone jobs is 33% above minimum wage.

Zones contribute to added local benefits such as overall economic vibrancy from business and job growth, added sales and property tax, building permit fees, land use improvements, economic revitalization and reduced blight.

"With many areas of the state experiencing high unemployment rates, the importance of business incentives and their impact on retaining and attracting companies to generate jobs for our residents and revenues for needed services is crucial to California’s economy,"adds California Association of Enterprise Zones (CAEZ) President, Cindy Trobitz-Thomas, Redevelopment Director for the City of Eureka. "The Cost-Benefit analysis demonstrates a 35 percent return on the state's investment in the Enterprise Zone Program, while realizing a net gain in state revenues of $249 million directly attributable to the Zone Program." For more information on CAEZ, please check out the website at
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