Letter to Governor Davis

November 2, 2001

Governor Gray Davis
State Capitol
Sacramento.CA 95814

Dear Governor Davis:

Thank you for inviting me to participate in the “Partnership for California’s Future: An Economic Summit.” I am looking forward to an engaging forum as we discuss proposals for California’s economic recovery.

The California Manufacturers & Technology Association (CMTA) brings to today’s debate ideas and insights generated by its member companies. These ideas are meant to provide an immediate stimulus to our faltering economy without a negative impact on the state's budget.

As reported in the Department of Finance's October Bulletin, manufacturing employment in California declined by more than 10,000 jobs in September and by 63,000 jobs during the past year with high tech jobs being the hit the hardest.

And, according to just released data from the National Venture Capital Association (NVCA), venture capital investment in the Bay Area during the 3rd quarter of 2001 has dropped 74 percent from its high in the 2nd quarter of 2000.

High taxes, high regulatory fees and high energy costs have created a California economy ill prepared to cope with the pitfalls resulting from poor consumer confidence, a weakened economy and the fallout from the September 11 attack on America.

We need action now. We’re losing jobs, revenue and wasting opportunity. This summit presents an invaluable opportunity to identify and fix the underlying problems in our State.

As a long time Sacramento resident, I have seen the legislature make policy when there isn’t enough money to go around and it is quite frankly the “unhappiest place on earth”. But just as California families and corporations are making hard choices and figuring out how to spend less, it’s time for our government to do the same. With strong steps, the economy can get better before it gets worse.

Cooperation between the business community and state policy makers is imperative for a united front on future economic policies and I trust the Economic Summit will be the start of that cooperation.

Attached are three documents outlining CMTA’s three main proposals to the summit.

• Sales Tax Exemption on Manufacturing Equipment
• Reduce Electricity Rates and Provide Customer Choice in Energy
• 2 Year Moratorium on New and Increased Regulatory Fees