$500 MILLION FOR JOB CREATION IN LOW INCOME NEIGHBORHOODS COULD BE RAISED IF GOVERNOR JERRY BROWN APPROVES PROGRAM
SEPTEMBER 2, 2014: This weekend the State Legislature passed the Urban Partnership's highest priority bill - a measure that would help community development entities (CDE) attract up to $500 million in private investment capital for job creation projects in California’s low-income neighborhoods. Assembly Bill 1399,co-authored by Assembly Members Jose Medina and V. Manuel Perez, would create a $200 million state New Markets Tax Credit (NMTC) program if Governor Jerry Brown signs it into law.Assembly Bill 1399 authorizes the Governor’s Office of Business and Economic Development (GO-Biz) to award tax credits to CDE’s.The CDE’s can then use the credits to raise capital from private investors for small business and community development projects such as facilities for non-profit organizations, light manufacturing, and mixed-use and transit-oriented development.
to the leadership of Assembly Members Medina and Perez, along with the action of grassroots community advocates across California, investment
firms and financial institutions, we are closer than ever before to real economic inclusion,”
said California Urban Partnership president Malaki Seku-Amen, who has advocated
for a state NMTC program since 2005.
14 other states in America, California currently has no tools for low-income
community populations to change their trajectory by gaining access to
affordable and adequate private investment capital, which will help them
participate meaningfully in the economy as entrepreneurs and agents of change,”
Mr. Seku-Amen added.
California’s unemployment rate has dropped significantly over the past 2 years
to 7.8%, many Californians continue to suffer from the impacts of the 2006
Financial Crisis and 2010 global recession.
Within many low-income
neighborhood census tracts in major urban centers (Oakland,
Hayward, San Francisco, San Jose, Richmond, Sacramento, Fresno, Los Angeles,
San Bernardino, Riverside and San Diego), unemployment rates for Blacks
and Hispanics have hovered between 15 – 35% for over a decade (according to the U.S. Bureau of Labor
These realities, coupled with the lack
of economic development tools and strategies, negatively affect entire regions,
strain public systems, and limit job creation and business expansion.
new markets program will go a long way to help California carve channels of
capital from investors to entrepreneurs. This is indeed the most successful
approach to job and wealth creation in America,” Mr. Seku-Amen declared.
(14) other states have already adopted a NMTC program, on average leveraging 13
times more in federal monies than they allocated in planned revenue to fund the
tax credit. According to a January 2011 case study prepared by Pacific
Community Ventures on the NMTC program, for every dollar of forgone tax
revenue, the NMTC leverages $12 to $14 of private investment.