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What new jobs? California program to entice hiring falls short

By in Press Enterprise on November 25, 2017

By CALmatters

By Judy Lin, CALmatters

Four years after Gov. Jerry Brown launched his signature program to boost California jobs by awarding tax credits to the businesses that create them, businesses have left two thirds of those available credits unclaimed—a sign that most expected jobs have yet to materialize.

Nor can the state say for sure how many of the administration’s 83,414 projected jobs over five years have actually been created. State offices responsible for awarding and monitoring the California Competes tax credits say they aren’t keeping count.

And an independent analyst warns that some of the governor’s incentives that have been put to use may inadvertently be picking winners and losers within California. The state has awarded about 15 percent of the tax credits to service professionals such as hair stylists, plumbers, insurance agents and doctors, giving them an advantage over their competitors in the same market.

Administration spokesman Sid Voorakkara said the governor stands by California Competes, calling the program a “vital tool to support businesses.” Asked why more companies aren’t taking advantage of the tax credit, Voorakkara said it may be too early to tell because businesses have five years to meet their hiring targets, and there may be tax advantages for waiting to claim the credit.

One economic development expert, however, said he doesn’t expect the claim rate to improve any time soon, given that businesses have been doing brisk hiring these past few years.

“I don’t expect the early results that we’ve seen are just a matter of the program not being a full implementation,” said Micah Weinberg, president of the Bay Area Council Economic Institute, a think tank focused on economic issues facing Silicon Valley. “I think the results that we’ve seen are the nature of the results we should expect from that program.”

The California Competes program was launched in 2014 to […]    

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