Sacramento, Calif. – As California faces growing competition from other states for manufacturing investment, Lance Hastings, President & CEO of the California Manufacturers & Technology Association (CMTA), published an op-ed in The Sacramento Bee urging state leaders to reinstate the Manufacturing Investment Credit (MIC). Click here to read the opinion piece.
In the piece, Hastings highlights the growing challenges California manufacturers face as other states try to attract and retain production and investment.
“…Across the country, manufacturing is having a pivotal moment. States are aggressively competing to bring production back home after decades of globalization pushed jobs overseas in search of lower costs and fewer regulatory hurdles. And California, simply put, is not positioned to win in this competition.”
“Today, 38 states support manufacturing through full investment tax credits or other targeted incentives designed to attract and retain these jobs. California is not one of them, and it’s costing us…”
California has lost an estimated 82,000 manufacturing jobs over about 2.5 years. The sector remains critical to the state’s economy, employing roughly 1.24 million Californians and generating an estimated $382 billion in annual economic activity.
The MIC is a proven solution designed to encourage manufacturers to invest in new equipment, expand operations, and grow their workforce here in California. Economic analyses show reinstating the MIC could help create more than 160,000 jobs and spur $4.5 billion in gross domestic product, while effectively paying for itself through increased economic activity.
“…We already know that tax credits can work when California prioritizes them. Just look at the state’s $750 million expansion of the film and television tax credit last year. Lawmakers rightly recognized that production companies are mobile and will chase incentives offered by other states. The result? California stepped up to stay competitive…”
Unlike film production, manufacturing is rooted in heavy equipment, supply chains, and highly trained employees. Once a factory leaves, it rarely returns. That makes the MIC essential for keeping manufacturers in California.
“Over 25 industry groups — from manufacturers to business associations — have sent a letter urging the Legislature to include the MIC in the state budget. The proposal is modest: $210 million. In the context of California’s multibillion-dollar budget, that’s a small, strategic investment with a significant return.”
The MIC is also reflected in SB 587 (Grayson), which passed the Senate and is currently pending in the Assembly Appropriations Committee. SB 587 is the Legislature’s third attempt to re-establish the MIC, following AB 1951 (Grayson, 2022) and AB 52 (Grayson, 2024), both of which Governor Newsom vetoed with direction that the investment credit be included in the state budget. CMTA greatly appreciates Senator Grayson’s commitment to the MIC and manufacturers.
With manufacturing touching nearly every corner of the economy, from medical innovations to automation that produces everyday goods, Hastings says inaction will cost California its competitive edge.
“…If policymakers are serious about protecting middle-class jobs, strengthening the economy, and keeping California competitive, reinstating the Manufacturing Investment Credit should be an easy call.”
Read the entire opinion piece here.
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About CMTA
The California Manufacturers & Technology Association (CMTA) has advocated for pro-growth laws and regulations before the California legislature and administrative agencies since 1918. The total output from manufacturing in California is $382 billion per year, roughly 10 percent of the total economic output of the state. Manufacturers employ 1.2 million Californians paying wages more than $2,500 higher than other non-farm employers in the state.