(photo credit: youngthousands)
While the California’s economy continues to make strides in its recovery and the overall unemployment rate has dropped to 8.7 overall, many inland areas continue to struggle. Such is the case for Riverside and San Bernardino Counties, known as the Inland Empire. In October, Riverside County’s unemployment was 10.1 percent. San Bernardino County’s was slightly better at 9.8 percent.
The numbers don’t lie–the Inland Empire is in dire need of a big economic boost.
“My main priority in Congress is creating jobs and economic prosperity for families of the Inland Empire,” said Congressman Miller. “This bipartisan legislation will spur economic growth and help put residents of the 31st District back to work by providing vital investment incentives for businesses to come to the Inland Empire.”
The bill will give incentives to businesses who qualify for “empowerment zones,” similar to the state’s enterprise zones, which are being phased out by the end of the year.
“Employers located in federal empowerment zones will receive tax credits for hiring employees. This legislation will provide a direct and positive impact on Inland Empire residents,” said the Congressman.
H.R. 3535 will extend the federal empowerment zones designations for three years and expand the program.
“The Inland Empire is still recovering from the 2008 economic downturn with thousands of residents struggling to regain employment and sound financial footing. This legislation will greatly expedite the region’s recovery and help reduce unemployment that remains more than three percent higher than the national average,” said Congressman Miller.
The Empowerment Zone program under H.R. 3535 will provide an employment tax credit to employers, up to $3,000, for employees who live and work in an EZ and a wage tax credit, up to $2,400 for each new employee aged 18-39 who lives in the EZ.
Empowerment Zones were created in the 1986 Internal Revenue Code. Santa Ana, the City of Los Angeles and Los Angeles County are designated EZ’s.
“Empowerment Zones would be very helpful to the area’s economy in light of action by California to dissolve the Enterprise Zones,” said John Husing, chief economist of the Inland Empire Economic Partnership.
This summer, Governor Jerry Brown signed legislation rebuilding California’s enterprise zone program of hiring tax credits that have provided employers in locally designated areas large tax breaks for years.
Starting next year, the legislation will significantly scale back such hiring credits. Instead, it will provide a sales tax exemption for manufacturing and biotech research companies and other tax credits to companies in regions of persistent poverty, to be designated by the Governor’s office.
Husing believes, for the Inland Empire, Enterprise Zones will be a big loss.
“We have had more than one company indicate that they have located in the Inland Empire because of the Enterprise Zones. They have felt that the state’s action was a violation of good faith.”
He, like Congressman Miller, hopes the Revitalize Our Cities Act, will get overwhelming support, giving a big burst of fresh economic air to a region who is in dire need of help.
H.R. 3535 would also include these features for businesses in the zones:
- Property Deduction – Allows business owners to recover all or part of the cost of certain qualifying properties by deducting them in the year that he property is placed into service.
- Investment Incentive – Allows businesses to elect to rollover certain gains from the sale of a qualified EZ asset.
- EZ Facility Bonds – Allows local or state governments to issue low interest facility bonds to businesses to finance qualified zone properties.
- Qualified Zone Academy Bonds – Allows state or local governments to issue no interest bonds to “qualified zone academies.” Local Education Agencies must obtain commitments from private entities for qualified contributions of no less than 10% of the bond in order to be eligible.