Viewing blog posts written by Dorothy Rothrock


Send a signal to potential CA MFG investments now

Posted by Dorothy Rothrock, President on June 12, 2017

I penned the piece below this week for the LA Daily News on the urgency of extending the State's sales tax exemption on manufacturing equipment purchases. California must send a message soon that we want to attract the manufacturing jobs and investments we need to support a growing middle class in the State.

Guest Commentary: Manufacturers need help from California tax policy

Every day we hear about manufacturers embracing exciting new technologies to improve products, speed up production and be ever more efficient and environmentally responsible. Manufacturing workers are using robotics, sensors, 3D equipment and computerized supply-chain logistics to make their companies more competitive.

As the largest industrial state in the country, California must look for ways to capitalize on these trends by encouraging new manufacturing investments and jobs. Buying new manufacturing equipment is not cheap, but there is something our lawmakers can do to help.

Competitive tax policy for the purchase of manufacturing equipment is scheduled to expire in 2022. That sounds like a world away, but manufacturers are long-term planners who need more than five years of predictable tax policy to commit to major manufacturing investments. Unless we act soon, we will again become one of a few states that tax these purchases. … READ MORE ON LA DAILY NEWS





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Cal Tax says: "Let's encourage manufacturing in CA"

Posted by Gino DiCaro, VP, Communications on April 30, 2017

Last week, as the Legislature heard two bills to extend and improve a California sales tax exemption on manufacturing equipment purchases, the California Taxpayers Association (Cal Tax) president wrote a great piece for the OC Register on the importance of encouraging manufacturing investment in California. Most states either don't tax the purchases in the first place or provide some level of exemption. If the state's exemption was allowed to sunset, it would create a competitive disadvantage in California's ability to attract investment for the high wage sector.  Cal Tax analyzed the state's current temporary exemption and found that every $1 dollar of incentive claimed has created $23 in return investment.  Cal Tax's piece below. Share it around where you can.

Let's encourage manufacturing in California 

by Teresa Casazza -- President, Cal Tax
(ran in OC Register April 27, 2017)

While discussing California’s loss of manufacturing jobs, a colleague once quipped that at the rate we’re going, the only factory jobs left in this state will be at The Cheesecake Factory.

We haven’t gotten to that point yet, but it is true that the Golden State has been losing manufacturing jobs to other states and countries, in large part because of the high cost of doing business in California.

Even native California companies are moving operations to other states. The latest is Aerojet Rocketdyne, the pioneering aerospace company that is eliminating 1,100 jobs in Sacramento and creating 800 jobs in Alabama. You don’t have to be one of Aerojet’s rocket scientists to know that California needs to improve its jobs climate.

In 2013, the Legislature and governor approved an economic development plan to attract and retain high-paying manufacturing and research-and-development jobs. This legislation has been good for our economy, and has the potential to be great with a few adjustments — tweaks included in twin bills, Assembly Bill 600 and Senate Bill 600, by Assemblyman Jim Cooper and Sen. Cathleen Galgiani, respectively... READ MORE ON OC REGISTER





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Paying attention to manufacturing in California

Posted by Dorothy Rothrock, President on July 5, 2013

It’s about time manufacturing got a little love in the Golden State.  You would think that creating high-wage jobs, making multi-million dollar investments for innovative new products and providing huge multiplier effects in the broader economy would have justified a sales tax exemption on manufacturing equipment before now.  Nearly every other state has this.  For more than a decade CMTA has argued that manufacturing investment is the engine of the economy – and letting the manufacturing investment tax credit lapse in 2003 was a big mistake.  Yet a dozen bills introduced since 2003 failed to reinstate the credit.  California has suffered declining investments and manufacturing jobs as a result.   
 
This week, at long last, lawmakers passed a bill package including a sales tax exemption for manufacturing equipment.  Did they suddenly come to their senses on the importance of manufacturing and agree that this and perhaps other policies should be adopted to help manufacturers?  It is a nice thought, but we shouldn’t count on it. We must keep educating legislators and pushing for improvements to make California a better place for manufacturing.  There is much more work to be done. 
 
Let’s make this the first of many positive changes to turn California into a powerhouse for manufacturing investment and job growth.  Every manufacturer should start by thanking your local legislators for the vote last week.  Let them know that the exemption will help, but remind them about your many other challenges in the state.  Invite them to visit your facilities to meet your employees and tell them about your contributions to the community.  CMTA will continue to be a resource to you and champion for your interests in Sacramento. 





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Manufacturing sales tax exemption bills move forward

Posted by Gino DiCaro, VP, Communications on April 25, 2013

This is a follow-up to last week's 'Tipping Point' piece on CMTA's proposed sales tax exemption on manufacturing equipment purchases.

Both tax exemption proposals were heard in committee this week, receiving positive comments from legislators.  SB 376 by Sen Lou Correa received a unanimous 7-0 vote in the Senate Governance and Finance Committee and Assemblyman Kevin Mullin's AB 486 received an affirming hearing but we won't know the bill's fate until the Assembly Revenue and Taxation Committee votes on it in its 'suspense file' hearing next week.  

Both bills enjoyed wide support in testimony with the only opposition coming from California Tax Reform Association, a group funded by public employee interests.  In ten years, among at least 30 proposals, only one ever made it past its first hearing,

CMTA stepped up its game this week to show the job impact from the manufacturers investment credit back when it was originally implemented in the state in 1993 for a ten-year period.  See for yourself below.  We basically caught up to U.S. manufacturing in the first seven years and grew by seven percent with 131,000 new manufacturing jobs before the massive tech bust occurred.  
 
manufacturing during the MIC
 
 
California manufacturers can overcome big challenges with the support of state and local government.  Most manufacturers realize there is a premium to pay to operate in the state, but the total valuation of California costs makes it almost impossible to compete.  Bringing back the sales tax exemption on manufacturing investments is one way to get back in line with most other states and position the state to compete for manufacturing scale-ups.
 
 




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Tipping point for California manufacturing investment

Posted by Gino DiCaro, VP, Communications on April 18, 2013

These days, it seems like states are figuring out how important manufacturing is to healthy economies.  The competition is picking up, as states move to reduce costs or create incentives for manufacturers.  After all, companies put investment capital in locations with the most attractive business climates.

This could be good news for California.  We have state-of-the-art advanced manufacturing facilities employing thousands of California workers. These companies could grow here if conditions are favorable. But there is one key issue that needs to be fixed if California is going to compete for its share of manufacturing growth.

A sales tax exemption on the purchase of manufacturing equipment is a policy most other states have adopted. This gives them a competitive advantage for their campaigns to grow high-wage manufacturing jobs. California had a similar tax rule, but it expired in 2003.  We could catch up by reinstating the exemption, which would put California back on so many lists for future investment and growth.  For many manufacturers, the sales tax exemption could be the 'tipping point' for a decision to invest in California.  

STE
sales tax exemption
one-pager

In the 1990's, when the tax credit was in place, California attracted on average almost 6 percent of the country's manufacturing investment dollars.   Manufacturing investment in California has now slowed to an average 1.9 percent of the country's, since that credit expired.

The credit helped Intel grow its wafer fabrication plant in Santa Clara and it helped Northrop Grumman grow in part  to more than 27,000 employees.  Because the exemption still exists in specific enterprise zones, it helped Fontana-based California Steel recently pay for a $100 million expansion.  Imagine if this powerful tool were available to every manufacturer again in California.

CMTA had its lobby day this week on the issue to start informing the legislature of the tremendous economic benefits, including new net revenues to the state.  Large employers, Intel, California Steel, Kimberly-Clark, International Paper, and Northrop Grumman joined to educate legislators why it is important to eliminate the tax on manufacturing investments.  

Economist, Bill Watkins put it perfectly last week when he urged the state Legislature to "Create an opportunity economy."  This manufacturing sales tax exemption would do exactly that and create the particular opportunity that California so badly needs.

 

(There are two sales tax exemption bills.  Assm. Kevin Mullin's AB 486 will be heard in Assm. Revenue and Taxation Committee on Monday, April 22 and Sen. Lou Correa's SB 376 will be heard in Sen. Governance and Finance Committee on Wednesday, April 24)

STE one pager |  Coalition letter in support

 

 

STE DAY pic

 





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