Enterprise Zones

The Los Angeles Times‘ editorial page is skeptical about Bush’s new “Gulf Opportunity Zones” in New Orleans—tax incentives to bring businesses back into the area:

To revive New Orleans’ economy, Bush has proposed creating “Gulf Opportunity Zones.” Similar to the “enterprise zones” that have been declared across the country since the 1980s, these would offer about $2 billion worth of tax breaks and loan subsidies to businesses that build and equip offices in Katrina’s wake.

Although some analysts are enthusiastic about enterprise zones, they may not be the best way to encourage New Orleans’ recovery. In general, most new jobs emanate from new, small businesses, which don’t benefit much from tax breaks because they don’t have much taxable income. By contrast, the beneficiaries of enterprise zones often are established businesses that move their offices into the zone to lower their tax burden.

Curiously, I haven’t seen any paper report on the fact that the city of New Orleans had already been designated a “Renewable Community”—in essence, one of the aforementioned “enterprise zones”—and the Department of Housing and Urban Development had already been offering $17 billion worth of tax credits to businesses in the area since 2000. Did it do any good? Well, New Orleans remains one of the poorest cities in the country, and I haven’t found any indications that things have perked up over the past four years. Interestingly, the Bush administration decided not to offer any new grant funding for these zones in 2004 “because the EZ program has not been deemed to be sufficiently effective.”

The classic knock against these tax breaks is that they are too small to entice most businesses to move, and the ones who do set up in these zones probably would have moved anyway, meaning they just get free money. I’m not sure how a few more tax breaks will help. That said, $2 billion is a relatively small part of the overall reconstruction budget, so in theory it’s worth a try, though this just seems like an odd thing for the White House to tout.


The more we thought about how MoJo's journalism can have the most impact heading into the 2020 election, the more we realized that so many of today's stories come down to corruption: democracy and the rule of law being undermined by the wealthy and powerful for their own gain.

So we're launching a new Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption. We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We'll publish what we find as a major series in the summer of 2020, including a special issue of our magazine, a dedicated online portal, and video and podcast series so it doesn't get lost in the daily deluge of breaking news.

It's unlike anything we've done before and we've got seed funding to get started, but we're asking readers to help crowdfund this new beat with an additional $500,000 so we can go even bigger. You can read why we're taking this approach and what we want to accomplish in "Corruption Isn't Just Another Scandal. It's the Rot Beneath All of Them," and if you like how it sounds, please help fund it with a tax-deductible donation today.

We Recommend


Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.


Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.