THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release May 4, 1993 EMPOWERMENT ZONES
Across the country, communities are reeling from a decade of declining opportunity and rising social and economic isolation. The Clinton Administration is introducing the Economic Empowerment Act of 1993 as the first piece of a larger community empowerment agenda to bring on a new era of opportunity, responsibility and community for all Americans.
The Empowerment Zone proposal represents a new approach to the problems of distressed communities. It moves beyond the old debate that the answer to every problem is top-down bureaucracy on the one hand or trickle-down economics on the other.
The traditional enterprise zone approach assumed that tax breaks alone can revitalize communities without changing the way government does business. The Clinton proposal gives local communities the incentives, deregulation and flexibility they need to work with the private sector to develop comprehensive economic strategies to generate business, create jobs, make their streets safe, and empower people to get ahead.
SUMMARY OF ZONE INCENTIVES AND INVESTMENTS:
In addition to enhanced flexibility to coordinate strategic plans, the 10 Empowerment Zones and the 100 Enterprise Communities will receive or be eligible for five basic forms of incentives and investments: a) Capital incentives to spur private sector investment; b) Empowerment incentives; c) Employer wage credits that empower both businesses within the zone and businesses outside of the zone that hire zone residents; d) Investment programs, such as community policing and enterprise schools; and e) Zone Priority Investments: A host of federal programs will give recipients of the 110 zones priority status for grant applications for investments that may be essential to a comprehensive empowerment strategy. Starred incentives (*) are available only for the 10 Empowerment Zones.
EMPLOYMENT AND TRAINING CREDITS ("ETC") FOR ZONE RESIDENTS
INVESTMENTS UNDER THE ACT
ZONE PRIORITY INVESTMENTS
COSTS AND PLACEMENT
Tax Incentives: The President's FY1994-1998 Budget includes a total $4.1 billion over five years in tax incentives. Approximately 75% of the cost comes from the Employment and Training wage tax credits. Investments: The Empowerment Zone Proposal aims to match that amount by targeting existing investments towards Empowerment Zones and Enterprise Communities. Over the next two years, $500 million currently in the budget will be allocated to Enterprise Grants for empowerment zones and communities. An additional $500 million will go to community policing, of which a substantial amount will be targeted toward the 110 zones. Innovative Programs: In addition, the President has requested that his Cabinet come forward with proposals to target at least $3 billion of existing funds within the zones and communities so that there can be an equal amount of investments and tax incentives. Several departments have already made that commitment. For example, the Department of Education has already committed funding and support for local communities to create 30 Enterprise Schools -- 24-hour, year-round community centers - - within the zones. HUD has agreed to target $200 million of its Community Partnership Against Crime funds -- public safety and drug prevention -- in the zones.
100 Enterprise Communities: Of the 100 Enterprise Communities, 65 will be in urban areas, 30 will be in rural areas, and 5 will be on Indian reservations. 10 Empowerment Zones: Of the 10 Empowerment Zones, 6 will be reserved for urban areas, 3 will be rural areas and 1 will be an Indian reservation.