Gov. Don Carcieri is proposing changes to the state’s enterprise zone program. As a result, some communities may lose existing enterprise zone designations. But we certainly like this proposal better than the one the governor floated earlier this year. At that time, he was looking to abandon the program altogether.
The statewide enterprise program encourages companies to create jobs by offering them tax credits. The idea – to get companies to invest in areas of cities that need extra help in recruiting companies – is a good one.
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Facing a deep state budget deficit, the governor initially decided that the program was not necessarily producing the results to warrant the tax breaks. The plan was to shelve the enterprise program.
But then the governor embarked on a series of town meetings. Those meetings represented a chance for him to hear directly from people throughout the state about what kinds of programs were working – and what kinds were not.
The enterprise zones, he was told, were working. Especially in cities like Providence and Woonsocket.
And so ever the pragmatist, the governor is rethinking the enterprise zones. He is willing to retain them, but only after some changes are made.
Gov. Carcieri’s new enterprise zone proposal calls for them to be established based on poverty rates in census tracts designated by the U.S. Census Bureau. To date, the zones need the approval of the General Assembly.
The new proposal also puts a greater emphasis on job creation. Now, companies can secure tax breaks by loaning money to businesses in enterprise zones or by making donations to public-improvement projects within an enterprise zone. Under the new plan, those benefits would be eliminated.
This new plan makes sense. It takes the politics out of the process. And it places job creation as the single incentive for tax breaks.
Critics will argue that this waters down the enterprise zone program. They will point out that of the nine existing programs some will not qualify under the new plan.
So be it.
Gov. Carcieri could have scrapped the whole program. Instead, he is making it more efficient.
We hope that someday soon the Rhode Island economy improves to the point where the Census Bureau numbers indicate that there is simply no need for enterprise zones because the poverty rate in our communities no longer warrants them.
Until then, cities and towns that are eligible should capitalize on the enterprise zone program and use the tax breaks to bring companies into urban areas they may not have considered entering before.
