It was always a noble idea. Imported from Margaret Thatcher’s Britain in the ’80s, it was quarter-backed by Rep. Jack Kemp and, a decade later, when the energetic politician became secretary of housing and urban development, was enacted into a nationwide program to revitalize the cities.
We’re talking about “enterprise zones,” now a part of most major American cities, including San Francisco. The idea was to replace “urban renewal,” which tragically forced low-income people out of their dwellings so the power elites could prettify urban cores.
Honorable planners, eager to reverse that tragedy and get beyond the corruption that naturally came with the federally subsidized bulldozers, agreed that delineating some of the worst sections for rudimentary businesses development would be the next inner-city frontier.
So the feds worked with the states who worked with the cities to grant tax credits and other incentives. The bootstrap concept not only would replace urban renewal, but it would show poor people how to get off the dole and become entrepreneurs.
Just how successful were enterprise zones in practice? An honest answer: mixed, with ambiguities aplenty. It may be impossible to calculate how many successful businesses were launched when they were not taxed as onerously as others.
That’s the nature of a market economy, wherein success — with its inherent multiplier effect on other businesses — is simply incalculable. But on The City’s east side, it’s clear that thousands of businesses have benefited and will continue to stay alive if Sacramento reauthorizes the Enterprise Zone Program.
We agree with Mayor Newsom and hope that will happen. The program, started in 1992, is one of 42 such zones across the state in which businesses get tax breaks for hiring low-income workers among other incentives. Some critics want it downsized, pointing out that it costs the state $14 million to pay for The City’s zone.
That curious formulation presupposes a prior state claim on wealth built by these enterprisers. Think of it this way: That $14 million is wealth generated by thousands of innovative, hardworking people. The prior claim should be theirs.
True, the local program reveals some oddities. Apparently, the zone includes Union Square, the Financial District, Nob Hill, Chinatown and Civic Center — hardly the most intractable precincts of poverty. But that’s perfectly explainable. Businesses in those areas were encouraged to hire low-income workers.
That’s a good thing. It’s also true that such benefits often are offset by other restrictions and taxes, which should be liberalized across the board. Businesses wishing to locate in The City will have to assess the carrots and the sticks. Too many sticks, obviously, will deter them.
Maybe we should make all of San Francisco an enterprise zone.