California

Governor Arnold Schwarzenegger recently agreed to change a few California regulations, which in turn allowed the continued existence of the San Fernando Valley's only economic enterprise zone.

According to the LA Daily News, local councilman Tony Cardenas "said keeping the enterprise zone will help. His office has been negotiating with a furniture manufacturer to build a plant that would employ 500 workers. 'Without the enterprise zone, it wouldn't happen,' Cardenas said. 'We're talking the potential of millions of dollars being invested.'"

I believe that Mr. Cardenas gives credit where credit is not due. Given the likelihood of a complex and burdensome tax regime at the state and local level, it is probably true that the buildling of the furniture plant would not occur without the designation as an economic enterprise zone. But reform the tax code in California, a possibility that Mr. Cardenas fails to mention, and the need for such development zones disappears.