Stronger-Than-Expected Revenues Present Opportunity
Sacramento, Calif. – As Governor Newsom prepares to release the May Revise, the California Manufacturers & Technology Association (CMTA) is urging the administration to prioritize California’s economic competitiveness by including funding for the Manufacturing Investment Credit (MIC) in the state budget. Click here for the factsheet on the MIC.
Recent budget updates show the state’s fiscal outlook is stronger than expected. California brought in $1.5 billion more in tax revenue than projected last month, and the California Legislative Analyst’s Office reports the state’s cash position is up $8.6 billion above expectations (year-to-date). This improved outlook presents a clear opportunity to invest in policies that drive economic growth and job creation.
“California manufacturers are ready to invest, grow, and create high-paying jobs, but they need a competitive environment to do so,” said Lance Hastings, President & CEO of CMTA. “The Manufacturing Investment Credit is a proven tool to strengthen our economy, and given recent updates to the state’s fiscal outlook, the May Revise is the right moment for the Governor to include it in the budget.”
The MIC would incentivize companies to purchase new, modernized equipment and expand operations in California, helping ensure that the state remains a leader in manufacturing. CMTA strongly urges lawmakers to invest $210 million in the MIC, which would pay for itself with an estimated $4.5 billion return for California’s economy. It would also support the creation of over 163,000 new jobs.
Earlier this year, more than 25 statewide business and industry organizations sent a letter to the Senate and Assembly Budget Committees urging the inclusion of the MIC in the 2026-27 State Budget.
With the May Revise approaching, CMTA calls on the Governor and legislative leaders to seize this opportunity to support California manufacturers, strengthen supply chains, and drive long-term economic growth.
The MIC is also reflected in SB 587 (Grayson), which unanimously 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.
Industry Voices: Why the MIC Matters
“This helps level the competitive landscape for investing in the state of California.”
— Medium-sized machinery manufacturer in the Sacramento region
“California must become more friendly and competitive for manufacturing so future generations can continue operating here.”
— Small aerospace & defense manufacturer in Southern California
“California facilities are losing out on million-dollar investments within our own company due to the lack of ROI. The MIC would make California a prime location to grow jobs.”
— Large paper products manufacturer with statewide operations
“California has so many hurdles to investment…the Manufacturing Investment Credit helps ease one of those barriers.”
— Large energy manufacturer with several California facilities
Contact: Nina Fisher, nfisher@cmta.net
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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.