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.

“For adult daycare and social services, the cuts are devastating,” state Senator Roderick D. Wright said in a statement …”Hopefully we will locate new sources of revenue and have a favorable outcome in the June special election so the situation doesn’t become even worse.”

Brown is likely to call a special election for June 2011, for votes on proposed tax and budget questions.

Assemblyman Stephen Bradford is particularly concerned about how the proposed budget will impact those who need health services.

“. . . Even with a new governor, we still have a slow growing economy which means that we face deep programmatic cuts and insufficient revenue; a perfect storm. Increasing premiums and co-pays during a time, when people have less money to work with sends a harsh message to struggling Californians, as do the proposals to eliminate adult day healthcare and reduce SSI/SSP benefits. These programs are ones that not only help families make ends meet, but also allows them to seek the best care for their elderly or indigent relatives. While the budget includes cuts to programs affecting low income Californians, the governor attempts to rectify those cuts with a realignment proposal that puts money back into the hands of locals to implement and maintain programs such as child welfare services and adult protective services.

More importantly, Californians will have an opportunity this year to take matters into their own hands and avoid further devastation to vital safety-net programs by voting to extend the temporary tax increases on this year’s ballot. Even amidst all this distress, I believe it is important for people of color to be at the table, as we begin to rebuild our state, and invest in new technologies and growing industries. It is my goal to implement policies to assist communities of color to be at those tables.”

Despite the seemingly gloomy situation, Price believes there may be room for compromise on the budget. “The governor’s budget unfortunately reflects today’s reality of declining revenues due to a global economic recession and high unemployment in our state; with more than 2 million Californians currently out of work.”

Meanwhile, Hall objects to the proposed cuts to Enterprise Zones because it may cost low income communities businesses and ultimately jobs, he said.

“These cuts are going to have a devastating impact, particularly on African American communities,” Hall said. “They’re talking about cutting the very thing that allows minorities to survive. If you take away the Enterprise Zones, that’s what’s helped to develop minority urban communities. Then, there’s no incentive for businesses even to come to South Los Angeles and Compton.”

Other major proposed spending reductions include $1.7 billion to Medi-Cal, $1.5 billion to California’s welfare-to-work program (CalWORKs), $750 million to the Department of Developmental Services, $500 million to the University of California, $500 million to California State University, and $308 million for a 10 percent reduction in take-home pay for state employees not currently covered under collective bargaining agreements.