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Brown budget: Prelude to rust state status?
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Gov. Jerry Brown’s proposed budget solution involves eliminating redevelopment agencies and enterprise zones to try and overcome a $25.4 billion deficit over the next 18 months.

It is a stance newly sworn in Lt. Gov. Gavin Newsom took sharp exception to on Monday as well as other municipal leaders throughout California including Manteca City Manager Steve Pinkerton.

“This (the budget proposal) will move California into rust belt state status but with fair weather,” Pinkerton lamented.

Pinkerton echoed Newsom in noting that RDA is the only tool local jurisdictions have left to stimulate economic growth in a bid to create private sector jobs. Newsom credited RDA for playing a pivotal role in San Francisco in helping build up Mission Bay and Treasure Island that have triggered bio-tech and other solid job growth in conjunction with the enterprise zone tax credit.

Eliminating enterprise zone tax breaks would net the state $924 million a year. No cost savings was generated by the state Department of Finance for Brown’s idea to eliminate redevelopment agencies since many RDAs - such as San Jose - are committing almost all of their revenue from property tax to pay off debt service related to a wide array of projects that are generating private sector jobs.

The enterprise tax zone credit has resulted in 72 Manteca employers creating 796 jobs since 2008. That has come at a cost of $29.7 million in state tax credits.

“Enterprise zones are the only thing disadvantaged parts of the state have to compete (for jobs),” Pinkerton noted.

Pinkerton noted the Brown budget plan perpetuates “what already hasn’t been working.”

“You can’t have a move anti-business budget,” he added.