More than one year ago, the state Legislature moved quickly to extend Boeing a package of economic incentives to encourage the aerospace giant to stay in Washington State and complete the “final assembly of the new generation of the 777 and its carbon-fiber wings in Everett.” Some opponents attacked these as “tax breaks,” overlooking the very basic economic fact that if Boeing moved 777 production out-of-state, there would be no tax revenue generated by the project – thus the package was helping keep tax revenue in Washington State, by keeping the next 777 here.
So, the state lost zero money by extending the incentives. And, currently, “work is under way to prepare the site where this will happen.”
The Legislature’s ability to come together to secure a future for key Boeing production in our state was viewed as a win for jobs. Lawmakers proved they could work together to ensure a friendly business environment for a key employer. Unfortunately, that’s not where the story ends.
According to the Everett Herald, freshman Democrat Rep. June Robinson (of Everett no less) is proposing to rewrite the tax incentive law “in ways that would slice the tax break in half immediately and force Boeing to pay millions — maybe tens of millions — of dollars in additional taxes this year.” Under her bill, Boeing would key lose tax breaks if the in-state workforce falls below a certain level. Of course, the bill is the “handiwork of the unions representing machinists and aerospace engineers.”
Boeing has expressed strong opposition to the bill. The company issued the following written statement,
“Attaching arbitrary job creation numbers to an industry that is already boosting Washington’s economy is harmful and unnecessary, and Boeing strongly opposes such a change. The 2013 incentives require Boeing to build the 777X exclusively in the state. This is an unprecedented safeguard for taxpayers.”
Everett Mayor Ray Stephanson agrees. Stephanson also issued a statement criticizing the bill,
“The proposed legislation would be detrimental to the hundreds of aerospace companies in Washington state, including those that make up the state’s largest job center here in Snohomish County. It’s critical that the state stand by its commitments to businesses who invest in our economy.”
The most notable reaction is, however, found in Jay Inslee’s lack of reaction at all. Inslee has done very little to discourage the assault on Boeing, and the jobs (and tax revenue) it generates in Washington. No one from his administration will testify when the House Finance Committee holds a public hearing on Robinson’s bill on Friday.
Inslee’s choice to remain silent is reminiscent of his reaction to the Washington Education Association’s budget busting Initiative 1351. As Herald points out, Inslee is staying silent in order to, once again, cater to the demands of special interest groups—including the unions that pumped millions into his gubernatorial campaign. The Herald,
“By staying neutral, Inslee might be trying to make amends with the unions, especially the International Association of Machinists and Aerospace Workers, some of whom are still seething at what they considered undue pressure put on them by the governor to approve a concession-laden labor contract to accompany the tax break. That vote landed the 777X.
“The governor will want their support in next year’s re-election campaign, and staying out of this fray now should help in that pursuit.
“But if the governor won’t defend the tax break he signed, might enough lawmakers who voted for it in 2013 agree to rewrite it?
“This week’s hearing might offer clues to the answer.”
Perhaps those clues might even change the clueless approach of the current occupant of the Governor’s mansion.