OLYMPIA – The Legislature opened its third special session, which some have dubbed the Boeing session, with a look back 10 years, trying to make sure the aerospace giant keeps jobs in Washington in return for some $8.4 billion in proposed tax breaks.
Gov. Jay Inslee and most others testifying at a House Finance Committee hearing on the tax break package extolled the economic and civic virtues of the state’s largest manufacturer. It employs tens of thousands in its factories, has hundreds of suppliers around the state, keeps ports busy, stimulates the Puget Sound economy and even provides work for more than 100 visually impaired machinists through Lighthouses for the Blind in Seattle and Spokane.
“This would give all of us what we need to secure our economic future,” Inslee said of a package of tax breaks for building the assembly line and manufacturing parts like a carbon fiber wing for the 777X, a new high-efficiency jetliner.
The legislation would allow the state to cancel the tax breaks if Boeing moves 777X work out of state or opens a second line for the plane elsewhere. That’s an effort to prevent what happened after Washington awarded tax incentives to Boeing in a two-day special session in 2003 to land the 787 production facility. The company opened an assembly line in Snohomish County, but in 2009 it opened a second line in South Carolina.
Some critics said the Legislature should demand more, such as “clawback” provisions that would require Boeing to repay some of the tax money it saved if the jobs are moved elsewhere or make tax breaks dependent on not moving jobs for any of its planes out of state.
“Washington has invested in Boeing. It’s not too much to ask that Boeing hold up its end of the deal,” said Andy Nicholas, of the liberal Washington Budget and Policy Center.
In the rush to help the aerospace industry, the Legislature is ignoring its usual process for public notification and review, said Patrick Connor, of the conservative National Federation of Independent Business. That makes it seem as though the rules don’t apply to Boeing, he said.
“Small businesses rarely enjoy such beneficial tax incentives,” Connor said, adding that if they did “they’d flourish, too.”
Rep. Larry Springer, D-Kirkland, said at least 50 small businesses that make parts for Boeing could benefit from the tax incentives too. But there are a half-million small businesses in the state, Connor said.
Rep. J.T. Wilcox, R-Yelm, said after the hearing that many of the incentives, which include faster processing of building permits, would be good for all businesses. The bill is written in such a way that it can’t be amended to include the rest of the state, but he expects a “good faith effort” to do that in next year’s regular session.
Finance Committee Chairman Reuven Carlyle, D-Seattle, said some legislators have certain levels of angst or resentment over Boeing opening a second 787 line in South Carolina after the tax breaks passed in 2003. This package has more protections and greater scrutiny to determine if the jobs show up, he said.
There is concern that legislators will miss something in the hurry-up session, but support for the package seems strong, Carlyle said. It could get voted out of committee as early as this morning.