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April 29, 2008

Chamber Urges Governor To Continue Supporting Enterprise Zone Programs

The Long Beach Chamber continues to pledge its support of the California Enterprise Zone Program and urges the Governor and the Legislature to consider continuing the Program without reductions to the incentives it provides.
 

The State of California Enterprise Zone Program now requires heightened audit and accountability to HCD by each Enterprise Zone, and more restrictive issuance of employee hiring credit vouchers under standard, state-wide guidelines.

The Program was created to promote business development and job growth in economically depressed areas. The Program is available in 42 distinct (but carefully defined based on poverty-levels within specific census tracts) throughout the state in areas with high populations of economically challenged residents (primarily minorities).

California has some of the highest business and personal income tax rates in the country, 8.84% and 10.3%, respectively, and all bordering states have lower state income tax rates, and generally have lower labor and operating costs. The Program allows for up to $12,500 in annual hiring tax credits for economically, physically/ mentally disadvantaged or other “at-risk” employees working in the Zones.
 

The Program contains sales/ use tax credits for investing in important infrastructure and operating assets, including: air/ water pollution control equipment, energy conservation equipment, manufacturing/ processing equipment and research & development equipment.

It has also helped attract and retain businesses in California’s most economically challenged areas, helped reduce poverty by over 7 percent, increased household income by over 7 percent and increased employee salaries by over 3.5 percent, according to a 2006 study commissioned by the California Department of Housing and Community Development.

July 23, 2007

Chamber Calls For Legislature To Repair Broken Water System

Reeling from Southern California’s driest winter in history, Leadership joins with Governor to take action
 

Long Beach Chamber Government Affairs Chair Lori Lofstrom (at the podium) joined with Governor Schwarzenegger, Mayor Foster, and area-legislators and other state leaders to call for immediate action to protect California’s Water-supply.

Click here to watch the video.

Video Credit: Governor's Office

“The Long Beach Aquifer Storage and Recovery Project is one example of how our state and local systems work together to provide water to our cities. But this system only works if we have both water storage and conveyance - storage to collect the water and conveyance to move it,” said the Governor. Mr. Schwarzenegger continued: “Right now our water system is extremely vulnerable. For one thing, we haven’t built a major state reservoir in more than 30 years and in that time our population has grown from 20 million to 37 million. We must solve California’s water problems not only for today, but for 40 years from now.”

“Ms. Lofstrom added: The population in Los Angeles County is expected to increase by 3 million people by the year 2050. People in this State don’t always agree on the issues but the one thing that many people agree on is that the State’s water supply is in trouble. The Sacramento-San Joaquin Delta provides water for 25 million Californians — including 60% of Southern California's supply — and supports $400 billion of economic activity, including fishing and farming.

“On behalf of the businesses of Southern California and the 1200 member businesses of the Long Beach Chamber of Commerce, I would like to thank you, Governor Schwarzenegger for underscoring the importance of a dependable water supply to the Southern CA business community. Through directing that immediate actions be undertaken to preserve the delta and our water supply, you are ensuring that our member businesses continue to thrive.

“Clearly, these actions couldn’t have come at a better time, as the Delta is at an environmental tipping point. Last month alone, the pumps had to be shut down for 9 days to preserve the smelt… The Governor’s plan is not only timely, but it is environmentally responsible. Not only is the State water-supply endangered because the Sacramento-San Joaquin Delta’s aging levees that are on the brink of failure due to the fact that the land they protect is sinking.

“But, the native fish populations are in danger of extinction. Taken together, the Chamber is supportive of investing in an improved Delta, as well as making a full-scale investment into the long-term viability of the State water supply. On behalf of the Long Beach Chamber of Commerce and the business-community of Southern California that depend on a stable water-supply to drive the State economy, we call upon the Legislature to consider the provisions of the Governor’s water plan, and fix the troubled-California water supply.”

November 7, 2006

Chamber Responds to Governor Schwarzenegger's Announcement of the Enterprise Zones

Long Beach Area Chamber of Commerce Vice Chair for Economic Development Blake Christian issued the following statement today to the media on Governor Schwarzenegger’s announcement of 6 Enterprise Zones in Los Angeles county to push economic development.

“The Chamber is delighted to learn from the California Business Transportation and Housing Agency that Governor Schwarzenegger has granted conditional approval to extend the Long Beach Enterprise Zone program for an additional 15 years. The EZ program offers Long Beach and 41 other cities throughout the state with a great economic stimulus and a competitive offset to businesses operating in one of the highest tax states in the country.

Although Governor Schwarzenegger has already produced over half a million jobs in California, valuable programs like this will only further economic development, helping California as a whole, and also benefiting Long Beach businesses and residents.

“We are pleased to see that Governor Schwarzenegger is continually initiating programs that will help growth throughout the state and in Long Beach. By offering tax credits, preference points on state contracts, and up-front expensing of certain depreciable property, businesses can gain similar benefits as the 1990-2000 Enterprise Zones, which experienced over a 7 percent drop in poverty and over a 7 percent rise in household income, compared to the rest of the state.

“Finally, we look forward to working with the businesses, city staff and residents of Long Beach to ensure maximum utilization of the Enterprise Zone program. We are eager to promote tax saving initiatives that help businesses and residents, and we thank Governor Schwarzenegger for this program that will be an advantage to the entire Long Beach area. “

Background

Businesses within Enterprise Zones are eligible for substantial tax credits and benefits including:
 

- Firms can earn $31,234 or more in state tax credits for each qualified employee hired.
 

- Corporations can earn sales tax credits on purchases of $20 million per year of qualified machinery and machinery parts.
 

- Up-front expensing of certain depreciable property.
 

- Lenders to Zone businesses may receive a net interest deduction.
 

- Unused tax credits can be applied to future tax years, stretching out the benefit of the initial investment.
 

- Enterprise Zone companies can earn preference points on state contracts.
 

- Up to 100% Net Operating Loss (NOL) carry-forward. NOL may be carried forward 15 years.
 

In August, Governor Schwarzenegger released a report commissioned by HCD that evaluated the success of Enterprise Zones in spurring economic recovery. The report shows that from 1990 to 2000 Enterprise Zones on average experienced:

- Poverty Rates: declined 7.35 percent more than the rest of the State
 

- Unemployment Rates: declined 1.2 percent more than the rest of the State
 

- Household Incomes: increased 7.1 percent more than the rest of the State
 

- Wage and Salary Income: increased 3.5 percent more than the rest of the State.

The next step in the designation process will be the Department of Housing and Community Development's (HCD) issuance of a conditional designation letter to each of the new zones. The letters will outline conditions which must be met to be granted final designation. Examples of conditions include preparation of an Environmental Impact Report and a signed memorandum of understanding with the Department which includes performance measures and benchmarks.
 

October 20, 2006

Chamber Responds to State Economic Data Announcement

In the Los Angeles-Long Beach region, the unemployment rate is at 4.8%, down from 6.3% in September 2004.

Long Beach Area Chamber of Commerce President & CEO Randy W. Gordon issued the following statement today in response to the release of new California Economic Data:

"Today the Chamber learned that according to new jobs numbers released by the California Labor & Workforce Development Agency, the California Unemployment Rate has recorded that job-creation is up across the State. In the Los Angeles-Long Beach region alone, the unemployment rate is at 4.8%, down from 6.3% in September 2004. That’s a marginal drop of 1.5%, with the addition of 83,700 jobs since Governor Schwarzenegger took office in 2003.

“Simply put, these jobs would not have been created, absent Governor Schwarzenegger’s bold leadership in standing firm against tax increases, and legislative attempts to weaken the historic gains made in Worker’s Comp Reform. Frankly, these kinds of positive jobs numbers would simply be impossible if Phil Angelides was allowed to follow through on his plan to move the California economy backwards by increasing taxes by $18 billion or more.

“Statewide, the unemployment rate fell from 4.9 percent in August to 4.8 percent in September. Since November 2003, California has added 653,500 jobs. The Long Beach business community welcomes this new economic data.”
 

October 6, 2006

Chamber Joins City & State Officials in Lauding Enterprise Zone Measure Being Signed into Law

Long Beach Area Chamber of Commerce Vice Chair for Economic Development Blake Christian issued the following statement today in response to Governor Arnold Schwarzenegger signing Chamber-supported AB 1550 into law.

Yesterday, the Long Beach Area Chamber of Commerce joined with Secretary of Business, Transportation & Housing Sunne Wright-McPeak, Senator Alan Lowenthal, Asm. Betty Karnette, Juan Arambula, and Long Beach Mayor Bob Foster in praising Governor Schwarzenegger for signing AB 1550 (Karnette/Arambula) into law. The panel also convened a roundtable on enterprise zones to discuss the successes of the administration of the Long Beach enterprise zone program. The program was held at “Red Barn,” a recipient of Enterprise Zone tax credits.

“I am pleased to hear about Governor Arnold Schwarzenegger’s legislative actions to continue to create new jobs. Last week’s announcement that Governor Schwarzenegger has signed AB 1550 (Karnette/Arambula) into law is welcome news for the Long Beach business community. Once again, the Governor has stepped up to the plate to protect jobs in the Long Beach region. Still, this effort would not have materialized without the legislative advocacy of Long Beach’s own Assemblywoman Betty Karnette. We applaud Assemblywoman Karnette as well as Assemblyman Arambula for drafting this legislation.”

“AB 1550 will aid in the improvement of the Long Beach area’s job generating tax incentive programs, known as Enterprise Zones (EZ Zones), which are so vital to the state’s most distressed areas. Initially, the Chamber was the only non-statewide entity to join a statewide coalition of business interests, including the California Chamber of Commerce and the California Restaurant Association. Through this coalition, the Chamber was an active participant in the Assembly Hearings held throughout this legislative session. The Chamber applauds Governor Schwarzenegger’s leadership, and validation of these efforts.”

“Although we believe that additional changes are needed to provide zone businesses with certain tax benefits as originally intended, we find AB 1550 to be a significant first step toward meaningful improvement and are committed to preserving the integrity of and improving these important economic development programs. Overall, Enterprise Zones throughout California are administered with the utmost professionalism and integrity. They have proven to be successful in retaining and creating jobs for the disadvantaged, spurring business investment, and revitalizing depressed communities.”
 

October 3, 2006

Chamber Responds to City Council Vote to Support Chamber Supported Home Depot Project

The Long Beach Area Chamber of Commerce issued the following statement today in response to the City Council of Long Beach authorizing the Chamber-supported Home Depot project to continue:

“The Chamber is delighted to learn that after five hours of testimony the Long Beach City Council voted 6-3 (Bonnie Lowenthal, Suja Lowenthal, DeLong, Richardson, Uranga and Lerch voting in favor) of the development plans for a new Chamber-supported Home Depot. Although the commercial development will be located on Studebaker and Loynes, it will benefit the entire city of Long Beach with increased tax revenue; moreover, it will create quality jobs for the citizens of Long Beach.

“We are pleased to see that the City Council was resolute in their decision-making, rather than cave to the calls of those that claimed nebulous environmental issues should hold up the Home Depot development from continuing. While we appreciate the multiple suggestions for the usage of the land; we concur with the Council that none of these were sufficient enough to stop the three and a half-year planned project from continuing on. Home Depot representatives have altered the plans over the years to adhere to the demands made by the public regarding environmental concerns. Additionally, they donated millions of dollars to the conservation of the wetlands.

“We concur with Vice Mayor Bonnie Lowenthal; all parts of the city should be treated equally while preventing any more sales tax dollars from going to Signal Hill or elsewhere. Statistics have shown that every year millions of Long Beach dollars have gone to area Home Depot stores, by building a Home Depot in Long Beach not only will the money stay in our city but the new building will provide 250 jobs that average $30,000 a year and full benefits for every employee.

“Finally, we look forward to working with Councilman DeLong and the residents of the eastside in creating a master plan for the third district. We applaud the leadership of Mayor Foster and his colleagues on the City Council that are serious about job creation. With the tax dollars that this Home Depot will generate and the new job opportunities it offers, this is a great victory for the economy and general well being of the Long Beach area.“
 

August 29, 2006

Long Beach Chamber Supports Tax Credit to Attract New Aircraft Manufacturing to California

Long Beach Area Chamber of Commerce Board of Directors Vice Chair for Public Policy & Governmental Affairs Council Chair Lori Lofstrom issued the following statement today in response to AB 2731:

“Today the Chamber came out in support of AB 2731 (Karnette), which would create a new tax credit to attract additional major aircraft manufacturing to California.  Specifically, this legislation will assist to attract the next generation U.S. Air Force air refueling tanker program, resulting in 2,000 to 2,500 new high-paying aerospace manufacturing jobs for California.

In January 2007 the Air Force will issue an RFP for the next-generation aerial refueling tanker.  The contract award is expected in the summer of 2007. At stake is a $20 billion program to replace the aging KC-135 tanker fleet with 100 to 125 new tankers.  AB 2731 would provide state income tax credits for any initial contractor or subcontractor who reflects the tax credits in the winning bid upon which the contract or subcontract is based.  The amount of the bid must be reduced by the amount of the tax credit for the contractor or subcontractor to be eligible for the tax credits authorized under the bill.

AB 2731 calls for tax credits for wages paid to workers and for materials used in the manufacture of the KC-X Tanker.  The wage credit is capped at $10,000 per employee per year.  The materials credit is capped at 10% of the cost of the materials.  The total tax credits allowed will be capped at $100 million over the 10 year period authorized by the bill.  The economic benefit of winning the KC-X Tanker contract for California will be approximately $450,000,000 annually; after full implementation:

The Long Beach Area Chamber of Commerce stands with Assemblywoman Betty Karnette and Long Beach Mayor Bob Foster in urging the California Legislature to pass this important legislation before the conclusion of the legislative year.”

August 20, 2006

Long Beach Chamber Responds to State Economic Data Announcement

Randy Gordon, Long Beach Area Chamber of Commerce President and CEO issued the following statement today in response to the release of new California Economic Data:

"Today the Chamber learned that the California Employee Confidence Index rose two points to 60.1 in July as more workers expressed confidence in their personal job situation. Moreover, new employment data released today reinforces the fact that California's economy is on the right track under Governor Schwarzenegger's leadership. The low unemployment rates we continue to see are only possible because the Governor supports the business community and is committed to holding the line on burdensome tax increases.

According to the California Spherion® Employment Report, a monthly survey conducted by Harris Interactive® on behalf of Spherion Corporation, 66 percent of California workers said they are confident in their ability to find a new job, an 11-percentage-point gain from June, and 68 percent of workers said they are confident in the future of their employer

The Long Beach business community welcomes this new economic data. These kinds of positive jobs numbers would simply be impossible if Phil Angelides was allowed to follow through on his plan to move the California economy backwards by increasing taxes by $18 billion or more.”

August 11, 2006

Long Beach Chamber fights to secure millions in area tax relief

Chamber’s advocacy efforts in Sacramento for enterprise zones to pay big dividends
 

Citing 2000 US Census data listing Long Beach as the 6th most poverty-ridden metropolitan area in the United States, the Long Beach Area Chamber of Commerce has taken their fight to retain Enterprise Zones in Long Beach to Sacramento. The Chamber’s advocacy efforts are a part of a statewide coalition, including the California Chamber of Commerce.

On Tuesday, August 8, 2006, in testimony to the California Senate Committee on Transportation and Housing, Long Beach Chamber president & CEO Randy Gordon said, “The Chamber supports Enterprise Zone legislation, because these zones provide an avenue of bringing economic vitality and investment to socio-economically depressed regions of the State, such as Long Beach.”

The California Enterprise Zone Program is desperately needed in order to allow the State of California, its businesses and their employees to compete with the other 38 states with Enterprise Zone programs, or other states with no income tax imposed. “Enterprise Zones bring sanity to the tax code, as California businesses are bombarded with ads and calls to relocate to low or no tax states. The EZ program is one of the few bright spots to counter this barrage,” added Matt Kinley, Chamber Chairman-elect. The California Senate Committee on Transportation and Housing, chaired by area senator Alan Lowenthal, is expected to vote on AB 485, reauthorizing the program by the end of the week. The full senate is expected to pass the legislation by the end of the legislative session.
 

California State Senate Transportation and Housing Committee

AB 485 (Arambula): Enterprise Zone Reauthorization
Tuesday, August 8, 2006, 1:30pm

California State Capitol

Good afternoon Chairman Lowenthal and members of the Senate Transportation and Housing Committee. My name is Randy Gordon. I am the President and Chief Executive Office of the Long Beach Area Chamber of Commerce.

Today, I’d like to share with you the local impact of Economic Development Areas, otherwise known as Enterprise Zones, and why the Long Beach Area Chamber of Commerce joins the California Chamber and others in opposing this bill in its current form.

Pending Analysis With Respect to AB 485

Due to the numerous revisions to AB 485, we need additional time to evaluate the impact of the application and approval process, including:

- The specific criteria applicable to pre-and post 1/2/2007 applications (Sections 2 & 3 of AB 485);
- The impact of proposed changes to our application submission, which is in process (Sections 2 & 3 of AB 485);
- The mechanics of the “administrative funding levels” (Sections 6 & 8 of AB 485);
- A full analysis of the Technical Changes only made available yesterday (August 7, 2006).

Let me begin by saying that the Long Beach Chamber gives it’s strongest endorsement to continuation of the Enterprise Zone Program for the City of Long Beach.
 

The Chamber supports EZ, because they provide an avenue of bringing economic vitality and investment to socio-economically depressed regions of the State, such as Long Beach.
 

While we agree that each EZ should be held accountable for ensuring that their EZ program is administered in an efficient, effective and creative manner to maximize the long-term benefits to the residents, businesses and the general community, due to the unusual legislative process with respect to AB 485, we need additional time to evaluate the reasonableness of the proposed changes to the application/ re-application procedures, as well as the periodic reporting requirements.

The city now has to go through the re-application process, which will cost in the neighborhood of $80,000.00.

This is a critical issue for the Chamber, due to Long Beach’s dubious distinction as the area with the highest poverty rate in the State.
 

As evidence, according to the 2000 US Census, Long Beach makes the nation’s “Top 10” for metropolitan areas with high poverty rates, coming in at number 6, with 26.4% – that’s even higher than New Orleans before Hurricane Katrina struck.

The California Enterprise Zone Program is desperately needed in order to allow the State of California, its businesses and their employees to compete with the other 38 states with Enterprise Zone programs, or other states with no income tax imposed.
 

EZ brings sanity to the tax code, as California businesses are bombarded with ads and calls to relocate to low or no tax states. The EZ program is one of the few bright spots to counter this barrage.
 

With the highest overall effective tax rate in the nation, the EZ program helps areas like Long Beach remain competitive in attracting and retaining commerce;
 

Long Beach has had a variety of economic challenges over the past two decades, including the closure of the Naval Shipyards, a steady growth of inter-city youth, increased gang activity, and a significant decrease in our manufacturing base.
 

The best example of need is seen in the case of the regions dependence on supplying labor to the Aerospace industry.
 

As jobs in aerospace leave the region, due to the high cost of doing business in the State, the region suffers.

Enterprise Zones present a stabilizing force to the area economy, as tax credits and incentives make economic sense for employers in the aerospace region consider relocating to lower-tax states.

Take, for example, the case of Boeing, who has said publicly that the “renewal of EZ was mandatory for their continued operation in Long Beach – particularly with respect to maintaining a cost-effective production line for the C-17 – an important airplane used for humanitarian efforts (e.g. Katrina disaster), as well as the Gulf War.

As home to the largest port on the West coast, we are at the front line of terrorism mitigation.

In Long Beach, EZs sales and use tax credit enable the port operators to employ the latest technology in Homeland Security as well as increased staffing levels.

The environmental impact of EZs on port is palpable. While most of the EZ discussions focus on wage credits, the CA provisions encourage EZ businesses to invest in technology as well as pollution control, manufacturing, and energy-related equipment.

Currently, the Chamber is working with the city and Goodwill to break the vicious cycle of poverty that currently exists.

With a fast-rising prison population, the EZ program allows EZ wage credits for hiring "ex-offenders", which will arguably break the cycle of career criminals. With our city's gang, and unemployed youth population, hopefully, we can use the program to turn the kids around before they end up in prison;
Moreover, Goodwill uses EZ Funds to employ individuals that are traditionally unskilled, and unable to find employment without job-training.

This partnership is a model in the State for providing the tools that unskilled or low-skilled laborers need to succeed.

The few instances of non-compliance and problematic cross-jurisdictional vouching in Oakland and Richmond should not overshadow the good work that has been done in Long Beach and the other EZs throughout the state;

These issues have been addressed by HCD’s proposed vouchering regulations, which standardizes the procedures and documentation requirements, as well as thorough FTB audit procedures of EZ credits;

We continue to urge the legislature to adopt laws, which will retain the original intent of the EZ program, while allowing communities and economically challenged employees to access the program in an efficient and effective manner.

Long Beach, as the 5th largest California city, a diverse population, and a changing business mix, is a shinning example of opportunity for change – opportunity that can be realized through smart EZ legislation.
 

We need legislation that will allow the most challenged communities to be designated or re-designated as EZs in order to help these communities break the “vicious cycle of poverty.” In its current form, AB 485 misses that mark. In that spirit, the Chamber respectfully urges your “no vote” on this bill until additional analysis can be performed (Randy – note that the marked up bill only became available to the public today (Monday).
 

Thank you, Chairman Lowenthal, and members for your time and support.
 

March 2006

Long Beach Enterprise Zones

The City of Long Beach offers an urban Enterprise Zone of over 26 square miles, encompassing thousands of uses.  No matter if your business is manufacturing or retail; large or small, the Enterprise Zone provides State tax credits that can enhance your business.

Email us for more information.

Long Beach Area Chamber of Commerce | One World Trade Center, Suite 206 | Long Beach, California 90831 | (562) 983-1241 | Contact