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March 15, 1985 - Image 4

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Page 4

Friday, March 15, 1985

The Michigan Daily

Edited and managed by students at The University of Michigan

A look at enterprise zones

Vol. XCV, No. 129

420 Maynard St.
Ann Arbor, MI 48109

Editorials represent a majority opinion of the Daily's Editorial Board

Forum without a quorum

T HERE IS perhaps nothing more
frustrating or insulting than
holding an event in a certain group's
honor, and later finding out that the
guests of honor decided not to show up.
The Michigan Gay Undergraduates
and the Lesbian-Gay Political Caucus
of Washtenaw County sponsored an
open forum for Ann Arbor City Council
candidates on Wednesday. The can-
didates decided they had better things
to do than listen to the political concer-
ns of organizations representing gay
people in the community, so they didn't
go. In doing so, these candidates
managed in one motion to alienate an
important part of their possible con-
stituency, and insulted the entire
Missing such an event could be un-
derstandable. Candiates often have
busy schedules, and are unable to
meet every group at every event held
in their honor. But when only two of the
nine candidates, Democrats Lowell
Peterson and James Burchell, even
took the time to call and tell the
organizers they could not make it,
missing the forum shows very little
At it's worst, this translates to

nothing more than lack of concern for-
the community. The Ann Arbor
homosexual community is not impor-
tant enough to persons running for City
Council seats to warrant spending a
few hours of their valuable time
listening and responding to that
group's concerns. For seven of the nine
candidates, gay concerns are not high
enough on their priority lists to even
extend the courtesy of notifying the
event sponsors of their absence.
The organizations which sponsored
the forum represent a significant per-
centage of the community and have
legitimate concerns for prospective
candidates to address. Further, a
forum of this type is perhaps the best
way for the community to become
aware of the positions and ideologies of
individual candidates.
Ann Arbor should be a community in
which all groups are accepted and
comfortable. It should be the respon-
sibility of those who wish to lead the
community to provide that environ-
ment, not to discourage-or ignore-it.
This years candidates for city coun-
cil have severely neglected that

By Jon Gauthier
Third in a series
America's cities and rural areas have long
been the recipients of federal funds for
programs designed to reduce unemployment
and promote economic development.
However, because of continued high unem-
ployment, low income, property abandon-
ment, and low economic growth, these
programs have come under attack from
liberals and conservatives alike. This
general disenchantment with old programs
has provided the background for a new con-
cept in economic development. This "new"
concept is coined, "enterprise zones."
This idea of enterprise zones originated in
the United Kingdom where they developed a
program of tax and regulation relief for,
businesses, who would locate in distressed
Industrial Economic Development
A Three Port Series
areas. The idea seemed to work and was sup-
ported by President Reagan in his 1980scam-
paign. Since then, the concept of enterprise
zones has been discussed in Congress as well
as over half of the state legislatures.
The concept of enterprise zones is based on
the assumption that incentives are the
missing ingredient in eradicating the
problems of America's distressed areas. By
giving substantial monetary incentives to
businesses and employees, enterprise zones
are supposed to provide the incentive for new
economic growth.
By targeting blighted areas, this growth is
supposed to occur in the most needy areas.
Proponents of enterprise zones claim that the
zones promote economic growth in these
Gauthier is a graduate student at the In-
stitute of Public Policy Studies and is the
chair, of the enterprise zone seminar that
will be held during the Industrial
Economic Development Conference,
March 14 and 15.

distressed areas. Opponents of enterprise
zones claim that economic growth will not be
created, but that the zones will provide the
wealthy with more tax breaks and bigger
As with all- industrial policies, an un-
derlying question that must be answered is
whether government intervention is the ap-
propriate response. It may appear that
government has no business meddling with
the business community, but the fact is that
government intervenes in business whenever
it taxes or regulates business. And, because
of these taxes and regulations, certain areas
become more or less attractive to business.
Enterprise zones are already created in a
rather ad hoc way. But does government
have the ability to coordinate its present ef-
forts? And, if government can coordinate
economic development, will a greater num-
ber of people be helped? Or will worthy
recipients who are currently receiving
federalcaid be cut because of the newfangled
The interests groups involved with enter-
prise zones include large and small cor-
porations, labor unions, and community
groups. The most supportive groups are the
corporations and businesses that would
inhabit the enterprise zones. With lower
taxes and fewer regulations, their businesses
become more profitable.
The labor unions claim that many
businesses will abuse the nw legislation and
just relocate their businesses without
creating new business. Most importantly,
labor unions claim that of the business
promoted in enterpise zones, these businesses
will most likely be capital-intensive activities
and not labor-intensive activities which
distraught areas need. For example, a

warehouse may be located in a zone with low
taxes, but it would not be a large employer.
The AFL-CIO Executive Council has stated
that enterprise zones are "a tax cut package,
and not a program to correct urban
problems." The Council has also stated that
"the AFL-CIO has no quarrel with the concept
of targeted assistance, but we believe it
should be done directly and not in a fashion
which has so much more potential for
inequity, waste and abuse."
Community groups have been split in their
positions about enterprise zones. The
National Center for Neighborhood Enter-
prise, an organization representing com-
munity groups in favor of enterprise zones,
supports enterprise zones because they are
"a mechanism to revitalize inner city com-
munities by stimulating local self-help
economic development." NCNE claims that
federal enterprise zones will "add to the
nation's economy, not relocate it."

Components of Enterprise Zone Legislation:
1. 3-5 percent extra investment credit for capital costs in personal property.
2. 10 percent extra investment credit for real property.
3. 10 percent credit to employers who raise the wage base in their zone for that year.
4. Income tax credit equal to 50 percent paid to disadvantaged zoneemployees.
5. 5 percent credit to zone employees for income earned in the zone.
6. No capital gains tax on business or property in the zone.
7. Speeded-up depreciation without restrictions that apply to other businesses.
8. Foreign trade zones where merchandise could be received duty-free, and zones could qualify for
limited federal regulatory relief.
9. Requirements for local governments to lessen regulations or provide improvements to the enter-
prise zone area.




Other community groups such as the New
York Urban Coalition have refuted'the claim
that enterprise zones are a cure-all to urban
social problems. To them, "a purely-
economic response" cannot solve the deep-
rooted social problems that exist. The NYUC
claims that marketplace forces are not able
to break the cycles of generations of poverty
in the inner cities.
Politically, the enterprise zone concept is
important because it has the support of the
Reagan Administration. Often, the plights of
people can be ignored because of inconclusive
debate. As such, the enterprise zone debate
may result in inactivity. The plight of
America's inner cities is a real one, and
should not be slighted because of the in-
decision in the political arena.

Athletic inflation


N THE SPIRIT of Bo himself, the
athletic department "went for the
extra point" and decided to raise ticket
prices for football games from $13 to
$14bn Tuesday. Unfortunately, that
score will show up in student, faculty,
and alumni wallets rather than the
Michigan stadium scoreboard.
Faced with declining television
revenues, the University's Board in
Control of Intercollegiate Athletics
agreed to the increase in order to work
toward balancing the athletic depar-
tment budget.The athletic department
works under a budget separate from
the rest of the University.
The athletic department does deser-
ve credit for working to keep ticket
prices down, and even with the current
increase Michigan is still one of the
least expensive ticket prices in the Big
Nevertheless, $14 seems quite a bit of
money to see a college football game.
Although college football has ap-
nroached a level of business that

almost rivals professional football,
those football teams are represen-
tative of the universities. It is ironic,
then, that high ticket prices might
exclude some parts of the University
from going to watch those games.
Because students are being asked to
pay only $7, they are less affected by
the increase than faculty 'and alumni.
Considering many concerts and shows
cost well over $10, that student price
seems more reasonable. But it is still
significant and may keep some studen-
ts home on football Saturdays.
The current increase in ticket prices
is reasonable since the athletic depar-
tment must raise enough money to
boost other unprofitable athletic
programs. But there does come a time
when enough is enough. In the future
as the Board in Control considers even
greater increases, it should keep in
mind that high ticket prices might well
exclude some members of the Univer-
sity community from a major Univer-
sity activity.




\/OU'RE IN T9ougLE

- S
a t

/{1 N

Daily should weigh both sides


Tathe Daily.:
While I recognize the grave
importance of the issues
surrounding nuclear weapons, I
feel it necessary to respond to the
Daily's article ("Loving this
planet," Daily March 12) on the
recent visit to campus by Dr.
Helen Caldicott. Caldicott was
correct in asserting that
Americans need to be more fir-
mly educated about the
seriousness of the arms race,
however her argument and the
Daily's presentation of it seemed
to suggest that only one form of
education is necessary.
Caldicott's speech was a
powerful and emotional plea to
end the arms race-just that,
nothing more. Most intelligent
observers are well aware that
billions of dollars are spent each
year by east and west to produce
weapons of mass destruction.
What Dr. Caldicott told her
audience was nothing new, but
what did she offer as a means of
halting the arms race? A panicky
and emotional call to protest. In
other words, when confronted
with the risk of nuclear confron-
tation, run through the streets in
protest, bury your head in the
sand, and when all else fails, at-
tack ITT, Williams International
and the rest of the dreaded
military-industrial complex, and
its ever-present pursuit of capital
View such as Caldicott's are
possessed of a perverted logic.

take note, however, of the
psychic-numbing in the Western
democracies that permitted
isolationists and pacifists alike to
turn a blind eye to the rise of
Hitler in the first place. Over 40
million people perished becase of
that psychic-numbing.
Nuclear weapons and the
threat of nuclear war will not go
away by simply avoiding the
issue. Caldicott was correct in
that respect. They will not,
however, simply disappear in the
face of mass protest and

hysteria: we shouldn't expect
them to.
The threat of nuclear war can
only be diminished through
communication and cooperation
among the superpowers. It can
only come through recognizing
what a long and arduous road the
disarmament process is and by
accepting the fact that for now, at
least, nuclear weapons are here
to stay.
In that regard the Daily should
also have reported on another
presentation given on Monday by

ra ti

of issue
liam Odom, a retired army
eral whose views on the arms
are diametrically opposed to
dicott's but nonetheless, just
relevant. Education on the
e of the arms race requires {
lysis of all its facets in a
onal manner. Certainly
rheadedness is necessary for
h those whose fingers are on
nuclear trigger and those who
at the other end of the barrel.
-Daniel Gentges
March 12!


Johnson report doesn't fulfill promises

AL r r

To the Daily:
On Wednesday we gave Vice
President Henry Johnson our
response to the February 27 draft
of "The Proposal Responding to
Safety Concerns and Sexual
Assault Issues at the University
of Michigan, "issued by the Sub-
committee on Student Relations
of the Sexual Harrassment Task
Force and the Campus Safety
Committee. This first draft is a
potential positive step from the
Administration toward a com-
prehensive program addressing
the problem of sexual violence
toward women.
However, it does not yet fulfill

all the promises that Vice
President Johnson made to us on
January 21, 1985, nor does it
adequately develop a program
that will increase the safety of
women, and contribute to the
cessation of sexual assault on
campus. The future drafts of the
report must be more specific and
circumspect. It is our intention to
work with the Safety Committee,
the Subcommittee on Student
Relations, and the Office of
Student Services to issue a more
comprehensive proposal.
Unfortunately, student par-
ticipation on the proposal has
been inadequate. We assure that
this has been an oversight on

the part of the two committees,
rather than deliberate action. Wei
have brought this matter to the
attention of the committees and
Johnson's office and ho than
this situation wild be rectified. We
look forward to working closely
with the Administration to im-
prove campus life and insure the
safety of women.
- Jennifer Faigel
Anne Ryan
Leon Winkelman
March 12

Faigel is editor of MSA.
News, Ryan is chair of MSA 's
Women's committee, and
Winkelman is on MSA's
Women's Committee.
by Derke Breathed

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