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VICA: California Must Become Attractive First

State’s appeal is necessary in order for SCV to grow

Posted: January 25, 2014 12:00 p.m.
Updated: January 25, 2014 12:00 p.m.
 

The Santa Clarita Valley has a robust coalition to attract jobs and business to the area, including the city’s business staff, the SCV Chamber of Commerce and the SCV Economics Development Corporation.

As such, the SCV has plenty of attractive qualities for businesses – a strong business development support network, incentives, a top-notch quality of life for employees, and more.

California as a whole, on the other hand, is struggling to maintain existing industries and attract new businesses. Chief Executive magazine named California the worst state for business and Forbes ranks California 41st out of the 50 states as a place to do business and for careers.

California weather is not as huge of a draw, when under the sunny skies are burdensome regulations, high taxes, and few incentives for new businesses and development. Instead, states like Texas, Florida, Tennessee and North Carolina continually lead the country in business-friendly reputation.

When businesses skip over California, that means they skip over the SCV, despite the multiple offerings the region has for businesses. But the Valley Industry & Commerce Association (VICA) has prioritized a few policies for this year that the state could implement to attract back industries such as filming and manufacturing and stir much-needed development.

Expanding the state film credit

Santa Clarita is bucking trends by continuing to grow its film, television and commercial filming industry while the rest of the state has seen a decrease. States like Louisiana, North Carolina and New York are offering film tax credits that have drawn productions out of California.

Unfortunately, our $100 million film credit pool just cannot compete with the billions that other states offer to productions, and we’re losing the economic development and tax revenue that this industry has historically provided.

Santa Clarita is a perfect example to legislators of a community that benefits from incentivizing an industry that no longer considers Hollywood and its neighborhoods “home.” Thanks to your film-friendly procedures and tax credits, film, TV and commercial productions generate an estimated $30.5 million in economic development in the SCV in 2013.

VICA will point to Santa Clarita as an example of why legislators need to vote to increase the film credit program to bring more economic development to our state.

Expanding hiring credits

Manufacturing sectors are slowly crawling out of the Great Recession, but California is continuing to hemorrhage jobs in traditional and high-tech manufacturing fields.

Now that the Enterprise Zones have been dissolved – including Santa Clarita’s successful EZ – California has begun to offer much more limited sales and use credits and hiring credits in lieu of the previous program.

While Santa Clarita companies in the previous EZ could get hiring credits for any new full-time hire, current law limits these incentives to hires making wages of 150 percent – 350 percent of the minimum wage (this range is currently $12 to $28). This leaves out many companies that have a minimum wage staff or are looking to hire very skilled labor making more than $30 an hour.

Santa Clarita is particularly losing out when California fails to maintain a level playing field with other states when it comes to manufacturing. Advanced Manufacturing is one of the SCV’s industry clusters, but it is hard for the SCVEDC to get a call in to a company if they are solely looking to relocate or expand to Texas, Florida, and other states with more robust hiring and business attraction incentives.

VICA is working with other stakeholders to increase the range of wages that qualify for hiring credits. Every new job that a company is incentivized to create means more spending in the local economy and fewer people depending on government programs.

Creating Redevelopment Agency Successors

Critics of redevelopment agencies claim that the programs did not result in actual development, but Newhall proves the critics wrong. Through its redevelopment agency, Santa Clarita spent about $48 million to upgrade downtown Newhall, bringing in more than 300 jobs.

VICA is consistently advocating for programs that create immediate development and jobs, and successful redevelopment agencies did the trick. But now that the agencies have dissolved across the state, it is time for state legislators to create another tool for localities such as Santa Clarita to utilize for economic development.

Last year legislators introduced bills to expand the use of infrastructure financing districts (IFDs), which allows cities and counties to issue bonds to fund public works projects. Another bill added on to the concept of IFDs and created infrastructure and revitalization financing districts (IRFDs). IRFDs could be used to finance a broader range of projects and facilities than IFDs, including land and property purchases for development purposes and construction or repair of housing and commercial and industrial structures.

VICA will continue to advocate for the creation of a new tool – or the expansion of an existing, but underutilized tool such as IFDs – to give cities the ability to expedite much-needed development.

The Valley Industry and Commerce Association (VICA) is a business advocacy organization based in Sherman Oaks that represents employers throughout the Los Angeles County region at the local, state and federal levels of government.

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