HERE IS what you would see when entering the ideal urban Enterprise Zone: printing shops, bakeries and repair shops, mostly new businesses employing largely unskilled workers to make deliveries and help to the one or two skilled people who own and run each business.
Near the entrance to this zone would be an information building containing all the local officials and forms needed for a businessman to start to shop in the zone itself. City officials would be there to sell old buildings as houses, shops or factories (no zoning laws at minimal cost. In the same building would repose a summary of federal and local laws that apply in the zone -- laws waiving or reducing minimum wage restrictions, safety standards and federl taxes on corporate income. There might also be a private police force, paid for with refunded city taxes, to replace the city police may have failed to make the tough neighborhood safe in the past. This picture is painted by Stuart Butler, an economist with the Heritage Foundation and the leading proponent of Enterprise Zones in this country.
It is the Reagan administration's principal remedy for the nation's troubled cities. Cities such as Baltimore, New York and the District are in varying phases of readying plans to start zones in neighborhoods suffering from massive unemployment crime and the abandonment of business. But even as those cities race to gain Mr. Reagan's attention (and not incidentally the chance for federal dollars), critics of the zones are saying the concept will lead to urban sweatshops asnd take money out of city treasuries by giving away tax breaks. Another criticism is that the zones will draw business away from other parts of the city or other cities, simply changing the location of the nation's economic problems.
Supporters reply that Enterprise Zones are meant to create new businesses, not attract existing businesses from elsewhere. The kemp-garcia bill, the congressional legislation that would relax federal taxes and regulations in those zones, is being rewritten to lessen the emphasis on flat reduction on taxes on corporate earnings so as not to draw existing businesses into the zones. It is undeniable that the ease of starting a new business in an Enterprize Zone -- where the tax laws encourage investment, where there is less government regulation and where buildings are cheap -- could make the parts of cities that are now unattractive suddenly competitive in the race to get new businesses. The problems with the zones come when attempts to make it easy for new businesses to start reach the point of compromising necessary protection for a worker's health, safety and fair pay.
The idea of Enterprise Zones, as far as it goes, is fine. But it does not go very far. At best, it may help some parts of some cities. For the Reagan administration or anyone else to sell the zones as the elixir for all that ails cities would be a farce. Even Mr. Butler is worried that his idea is being oversold. He cautions not to expect miracles, saying it will be at least 10 years before Enterprise Zones can be judged a success or failure.
Ten years. Right now it is reasonable to ask how long a city government can give a tax break to one shoe factory in a zone and not to another because it is across the street. With that advantage, the shoe factory in the zone will soon put the other out of business. How helpful is that? What is needed, more than Enterprise Zones, is for the national government to construct some urban policy to help cities. If taxes and government regulation are driving businesses out of cities, then the cities and the federal government need to change tax and business regulations for everyone. Enterprise Zones could become little more than tinsel curtains used to hide the issues that are crucial to the regeneration of American cities.