California Department of Finance released a map on Friday showing where it recommends to designate so-called “opportunity zones” where people and businesses could pocket some tax relief by committing to long-term investments in lower-income communities.
The moves comes after Republican lawmakers passed the new federal tax bill in December. While Gov. Jerry Brown is not a fan of the new law, he intends to use one of its provisions to open economic development opportunities in lower-income neighborhoods around California. The new tax law allows governors to designate certain census tracts as so “opportunity zones” where investors could defer or eliminate federal taxes on capital gains.
It’s not clear whether investments have to create jobs to reap the tax benefits. Still, officials from the Brown administration say they’re hopeful that the zones could lure investors to communities that have not benefited from the full economic recovery since the recession.
H.D. Palmer, deputy director for external affairs at the California Department of Finance
Timothy J. Bartik, senior economist at the W.E. Upjohn Institute for Employment Research, a nonprofit research organization devoted to studying unemployment; he specializes in regional economics, public finance, urban economics, labor economics, and labor demand policies; he tweets @TimBartik