Below is a letter from CAEZ President Craig Johnson regarding Assemblyman Perez and AB1139:

Dear CAEZ Members and Friends of CAEZ,

As you can see from the article below, Assemblyman John Perez, the author of AB 1139, will become the new Speaker of the State Assembly. Assemblyman Perez also recently removed AB 1139 from the January 5th agenda of the Assembly Jobs & Economic Development Committee. Both of these developments should give us pause, as his intentions toward the Enterprise Zone program are at best, unclear at this point.

We will still have a fight on our hands to preserve and advance the Enterprise Zone program in 2010, as the Legislative Analysts Office has once again called for the abolition of the program.

I will keep you apprised as things develop and ask that you continue to provide CAEZ with your success stories. This effort is vital if we are to combat the onslaught of negative press that continues to appear in newspapers and Journals across the state. Legislators read! It is incumbnet upon us to share our successes with our Legislators in every part of the State. If we don’t do it, no one will.

Thank you for your continued support of the Enterprise Zone program.

CRAIG JOHNSON
President
California Association of Enterprise Zones

Perez emerges from speakership battle
jsanders@sacbee.com
Published Thursday, Dec. 10, 2009
Assemblyman John A. Perez’s final opponent has bowed out, setting the stage for the first-term Democrat to be selected Assembly speaker today — the first openly gay man to hold the post.
After behind-closed-door talks this week with Perez and other political leaders, Assemblyman Kevin de Leon agreed to bow out and is expected to nominate Perez in an Assembly Democratic Caucus today, Capitol sources said.
It is not clear when a formal floor vote will be taken, but by uniting behind a candidate, Democrats need not rely on GOP votes.
De Leon’s decision ends one of the nastiest battles over the Assembly’s top job in recent history, with allegations of backstabbing, double crossing and political deceit.
Perez, cousin of Los Angeles Mayor Antonio Villaraigosa, will replace current Speaker Karen Bass, who will be forced out of the Legislature by term limits next year.
Democratic colleagues praised Perez, who has served this year as caucus chairman, helping steer the 51-member group through often bitter disagreement as California’s reeling economy forced billions in cuts to education and other public services.
“He’s fair, he’s inclusive, he’s articulate, he’s focused, he’s a team player, and he’s friends with everybody,” said Assemblywoman Bonnie Lowenthal, D-Los Angeles.
Lowenthal said that Perez’s status as a first-year legislator was an asset because he can serve five years as Assembly leader before being termed out.
“I trust him,” Assemblywoman Fiona Ma, D-San Francisco, said of Perez. “If he says that he’s going to do something, I believe that he will.”
Republicans said that they differ markedly in political ideology from either Perez or de Leon, both labor-backed Democrats, so the selection of one over the other makes no substantive difference in prospects for GOP legislation.
Assemblyman Anthony Adams, R-Hesperia, said Perez has demonstrated a “great deal of integrity and steady handedness” and that Republicans must find a way to work with whomever Democrats choose because they hold 51 of the 80 seats.
“Candidly, what choice do we have?” Adams said.
Perez, who is chairman of the Assembly Democratic Caucus and was regarded much of the year as a potential candidate for speaker, entered the fray as a late-comer after being pushed by colleagues.
The final days marked a political whirlwind that apparently pulled the rug from under de Leon, who was regarded as the clear frontrunner but never won commitments from a majority of the 51-member Democratic Caucus.
Behind the scenes, the race appeared over shortly before Thanksgiving, when Villaraigosa hosted a private meeting of Perez, de Leon and former Assembly Speaker Fabian Nunez, de Leon’s childhood buddy and lifelong friend, Capitol officials said.
The session ended over a bottle of wine, officials said, with de Leon expected to become speaker and Perez targeted to run with no major Democratic opposition for the Senate seat of Cedillo, who has long coveted a move to the Assembly once he is termed out next year.
Despite the apparent understanding, de Leon was not able to quickly muster the caucus majority necessary to secure the post.
Torrico said many Democratic colleagues simply felt that de Leon, chairman of the powerful Assembly Appropriations Committee, had not led committees focused on major policy issues and was not “up to the job” of speaker.
“Too many people believe that he didn’t earn his stripes, that Fabian Nunez did all the heavy lifting for him,” Torrico said.
Days after the late November meeting with Villaraigosa, Perez switched gears and opted to fight de Leon for the speaker’s job after being lobbied heavily to run by Assembly Democrats Jared Huffman and Fiona Ma, among others.
With Bass’ support, commitments quickly began swinging Perez’s way.
Torrico said he felt a turning point came with commitments by Ma and Los Angeles Assemblyman Felipe Fuentes to Perez.
“Once they came on board with Mr. Perez, basically the three most operational people in the Assembly were on the same team,” he said. “That was a force that could overcome a four-year head start that Kevin de Leon had over John Perez.”
Last week, Bass held a press conference to throw her support behind Perez, declare that a majority of the Democratic Caucus supported him, and to announce that she would begin working with Perez to set a timetable for transition.
Neither Perez nor de Leon commented publicly about the turn of events, but privately, de Leon’s camp continued to press the fight.
The same day that Bass told the media that Perez’s victory was imminent, 10 members of the Assembly’s 17-member Latino Caucus met at the Sheraton Hotel, after which seven declared their support for de Leon as speaker.
At the time, Assemblyman Pedro Nava, a Santa Barbara Democrat who supported de Leon, said the contest was far from over.
“I think that we have a large number of very independent-thinking people who are not going to be stampeded into making a decision,” Nava said.
Since then, Perez and de Leon, along with others, have been ironing out differences in private talks, leading to today’s conciliation.
Doug Herman, Perez’s political consultant, said he does not expect tension to linger between the two finalists for the top job.
“John would never double-cross Kevin,” Herman said. “I think they both want to be able to, and will be able to, work together.”

After three very intense hearings, the JEDE committee has issued a list of all the recommendations for revision to the Enterprise Zone program. Final comments are due by November 6. The new draft of AB1139 should be out by November 10. At that time, we’ll know what are the next steps for the anti-business, anti-employee bill AB1139.

I attended Monday’s JEDE hearing only to hear more of the same arguments from the AB1139 opposition.  The primary opposition was once again from Labor and once again they just curtly referred to a scattering of old reports claiming that the EZ program doesn’t work.  On the contrary, the audience was filled with people from the private and public sectors beaming about the benefits of the EZ.  Several highlights were Lydia Moreno’s testimony about the effectiveness of the program and the companies who decided to stay in California because of the program.  Individual company representatives waited in line to tell their story and urge continued support and expansion of the EZ program.

Professor Samuel Bornstein, from Kean University School of Business, offered a keen remodel of the net interest deduction that he claimed could save the mortgage meltdown and cause the capital markets to function again.  The proposal was to allow lenders to claim the net interest deduction for residential loans made to small business owners who pulled money from their equity and invested it into their business.  Professor Bornstein cited statistics that many small business owners mortgaged their homes with toxic loans to fund their businesses.  Giving the lender a tax break will allow the lenders to renegotiate with the borrowers for lower monthly payments or lower principal to allow them to stay in business and keep their homes.  Several business owners testified that they could not have made it through the tough economic times without the Enterprise Zone program.

A revised 1139 should be ready by December and then open for discussion or vote in the JEDE committee by January 5, 2010.  Stay tuned.

Here’s an email I received from CAEZ president Craig Johnson about the two new hearings.

Dear CAEZ Members and Friends of CAEZ,

The Speaker of the Assembly has approved two additional Enterprise Zone hearings for the Assembly Committee on Jobs, Economic Development and the Economy. The first is scheduled for October 8 in the Bay Area and the second will be held October 14 in Southern California. Each of the two hearings will have different topics, unknown to us at this time, as is the exact location of the hearings.

Your CAEZ leadership will be meeting with the Enterprise Zone Coalition to discuss strategy and potential speakers, once we know the topics to be discussed and the hearing format. If any of you are available to attend one or both of these hearings, there will be a public comment period where the public is encouraged to speak on any topic related to the Enterprise Zone program. It would serve CAEZ and the EZ program well, to have as many public comment speakers as possible speaking in support of the program. Your active participation in this process is critical to the continued success of the EZ program.

I will keep you apprised as more information is released.

Thank you for your continued support of CAEZ and the Enterprise Zone Program.

CRAIG JOHNSON
President
California Association of Enterprise Zones

In what was mostly a redux of the AB1139 hearings a few months ago, the JEDE held the first in what will likely be a series of hearings relating to AB1139. Being pushed hard by the unions, AB1139 is set for vote by the Committee in January 2010. The Committee heard testimony from the usual players. Proponents of the Enterprise Zone program seem to have the upper hand in the presentations by presenting lucid, relevant data and testimony illuminating the EZ benefits. Opponents seemed to repeat the same talking points that have held little traction over the past year with legislators. At one point, a union representative began to berate the EZ consultants prompting Committee Chair Perez to sternly talk him down and ordered him to stick to the facts of his presentation. Over the next few weeks, I will post several of the articles and studies from the hearing as we gear up for more hearings and the eventual vote in January. Below is the Committee’s statement about its goal in examining the EZ program:

The Assembly Committee on Jobs, Economic Development, and the Economy (JEDE) is initiating a comprehensive examination of the California Enterprise Zone Program and the other state programs related to geographically-targeted economic development areas (G-TEDAs).

It is the Committee’s objective in undertaking this review to provide Members of the Legislature and the public with a more comprehensive understanding of where the state’s resources are being expended and the value these types of expenditures have for local communities. Given the current state of the economy, it is imperative that the Legislature ensure that economic and workforce development programs are best used to meet the immediate and longer term economic recovery needs of the state.

The Committee currently plans to hold three public hearings between August 18 and October 17, 2009. Stakeholder meetings are planned for the latter part of October and possibly into early November 2009. A reform proposal is expected to be sent to the Office of the California State Legislative Counsel in early November 2009. Copies of draft amendments will be available through the JEDE Office in early December 2009. Legislation arising from these hearings will, most likely, be heard in the first two weeks of January 2010.