Manufacturers Wonder What Happened to California’s “Welcome Mat”

Sacramento, CA - After Gov. Gray Davis signed the state’s budget today, The California Manufacturers & Technology Association (CMTA) expressed disappointment that modest business tax incentives were not included in the package and pointed to other anti-business legislation as proof that the “unwelcome mat” is at California’s front door.

Numerous efforts were made by CMTA to get tax relief in the form of limited increases in the Manufacturers Investment Tax Credit, Research and Development credits and the Net Operating Loss carry-forward. A CMTA-led phone calling and letter writing campaign late last week to Assembly and Senate leadership went unanswered.

“This month has already provided us with examples of businesses closing California facilities and scaling down operations. My in-box is full of operational budget horror stories. If we don’t get some relief soon indicating the state is interested in keeping its employers and the jobs they create, the exodus will be significant,” said CMTA President Jack M. Stewart.

Added Stewart: “It’s hard to believe that we can’t get anyone to listen to a small request for $150 million in targeted tax incentives in a $101 billion budget after our members experienced the largest electricity rate increase in history, kept the lights on by curtailing power in the interruptible program and suffered massive productivity losses.”

In the pipeline are bills to make large industrial users pick up the majority of Edison’s debt, increase workers’ compensation costs and increase unemployment insurance taxes. “These bills send a strong signal that business is not welcome in California. While all of these initiatives are supposedly designed to ‘protect working families’, they are doing just the opposite by sending their jobs to other more hospitable locations,” concluded Stewart.

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