April 25, 2013The Honorable Kevin de León California State Senate Chair, Senate Appropriations Committee California State Capitol, Room 5108 Sacramento, CA 95814
Re: SB 376 (Correa) – Support
Dear Senator de León:
For many decades, California has enjoyed a robust and productive manufacturing sector, the engine of the economy. Manufacturers in the state have created high wage jobs through a constant cycle of innovation and investment in new machinery and equipment. As a result, we are among the most productive and energy efficient manufacturers in the world. It is no surprise that other states and regions want what we have built over the last decades – manufacturers to propel their economies and employ their citizens in skilled jobs with high wages.
California manufacturers are diverse, with every type of product represented. One constant feature is every manufacturer has a need for continual modernization to build new products, to meet environmental and safety standards, and to increase the skill level of its workforce.
The equipment needed to meet these needs can be very expensive with relatively long pay back. The risks are high and investors are looking for locations that will provide the best outcomes. With improvements in transportation and logistics, manufacturers increasingly have choices to locate facilities all over the country and the world. Competition for manufacturers is fierce – other states and countries are attempting to lure investments and hiring to other locations.
How can we make sure California is on the short list for manufacturing investment that would succeed in the state? To beat the competition we need to keep our tax and regulatory policies up to date to remove barriers to investment and hiring.
One obvious barrier to investment in California is the requirement that manufacturers pay sales tax on the purchase of manufacturing and R&D equipment. Only five other states do not fully, or partially, exempt these purchases from payment of sales tax.
We must address this competitive disadvantage for California manufacturers and encourage them to invest and employ in California.
We urge your “yes” vote on SB 376.
Sincerely,Acclamation Insurance Management Services Anheuser-Busch Baxter Healthcare Corporation Bishop-Wisecarver Corporation Bayer HealthCare, LLC California Asian Pacific Chamber of Commerce California Business Properties Association California Cement Manufacturers Environmental Coalition California Chamber of Commerce California Chapter of American Fence Association California Concrete Contractors Association California Fence Contractors’ Association California League of Food Processors California Manufacturers & Technology Association California Nevada Cement Association Caterpillar Chemical Industry Council of California Consumer Specialty Products Association The Dow Chemical Company Engineering Contractors’ Association Flasher Barricade Association General Mills Intel Corporation Inline Translation Services, Inc. International Paper Company Kimberly-Clark Corporation Lockheed Martin Space System Company Los Angeles County Economic Development Corporation Marin Builders Association