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Gov. Browns proposed cuts could hurt Blacks

Mary Hill-Wagner | 1/26/2011, 5 p.m.

Gov. Jerry Brown's campaign pledge to "get California working again" may prove a hollow promise for African Americans, according to some state lawmakers. Many of the proposed cuts may actually be "devastating" to Black communities, resulting in a loss of jobs and businesses, some say.

Among his proposals, Brown wants to eliminate state tax benefits for Enterprise Zones. In addition, the governor has called on legislators to enact, by March 1, a budget that includes cutbacks to welfare and the state's public universities.

The budget also proposes to change the role that state and local governments play in local development activities by eliminating state tax benefits for Enterprise Zones and shutting down some redevelopment agencies, according to state officials.

The urban Enterprise Zone system is a series of tax incentives to businesses and investors to encourage entrepreneurship in economically disadvantaged or blighted areas.

Minority communities would be disproportionately affected by the governor's proposals, according to Sidney Singleton, a member of the Black Chamber of Commerce, who is the chief executive officer for Wincentive Corporation, an enterprise zone tax credit consulting firm in Sacramento. Wincentive specializes in recovering Enterprise Zone tax incentives for businesses operating in California Enterprise Zones.

"(Brown's proposal) would have an adverse affect on Black communities. There are 42 Enterprise Zones in the state. There are a lot of companies that have moved to California because of Enterprise Zones. Enterprise zones were designated to stimulate local economic development, local job growth and local business investment. The businesses that operate in these zones hire a lot of people of color. So, they would be affected disproportionately, if he does this."

Eliminating these benefits could cause businesses in some Black communities to close or not to open at all, resulting in a rise in unemployment, according to Assemblymember Isadore Hall III.
Ultimately, Brown's proposal hopes to close an 18-month budget gap estimated at $25.4 billion. In addition to getting rid of Enterprise Zones, the new governor has requested that the state extend billions of dollars in vehicle and income tax hikes that are set to expire this year. But it may be the elimination of Enterprise Zones that could cause the most damage to Black communities, according to state lawmakers.

Enterprise zones have been instrumental in revitalizing inner city areas, said Hall. To target them strikes at the very heart of many minority areas, he said.

According to Sen. Curren D. Price Jr., who represents the 26th Senatorial District, the governor's budget is a starting point for discussions on the fiscal crisis plaguing California.

"I am open to examining alternative approaches that could help us resolve the state's current budget crisis. As we move forward, it is important to remember the impact that our investments in education, health and economic development can have on our economy," said Price, who will be meeting with constituents over the next few weeks to gauge their thoughts on the governor's proposed budget.

Other proposed budget cuts include a plan to cease Medi-Cal payments that support adult day healthcare programs.