Democratic Lawmakers Want To Toughen Aerospace Tax Breaks After Boeing Job Losses
Democratic legislators in Olympia are taking aim at the huge tax incentive package the state passed to win Boeing’s 777X production line. Those tax breaks extend existing preferential rates and amount to $8.7 billion over 15 years.
Boeing’s two biggest unions have argued for months that the state needs to get more out of Boeing and other aerospace companies in exchange for the tax breaks.
"We find it very reprehensible, disgusting that after our members made a huge sacrifice [and] the state made a big investment that The Boeing Company would start shedding engineering jobs, shipping them out of state," said Larry Brown, the legislative and political director for District Lodge 751 of the International Association of Machinists and Aerospace Workers.
'They Don't Feel Like It's Fair'
Boeing’s workforce in Washington state has shrunk by about 2,500 jobs since October 2013, right before lawmakers passed the tax break extension. That’s prompted Rep. June Robinson to agree to sponsor a bill that would raise the tax rate for Boeing and other aerospace companies if they have a net loss of jobs. Robinson says she’ll introduce the bill in the next two weeks.
"People are frustrated that we gave Boeing a big tax break at the same time we’re having trouble funding education and other things that are really important to folks in the community, and they don’t feel like it’s fair," Robinson said.
In a statement, Boeing said it strongly opposes any changes to the incentives, which the company says have worked over the long haul. Boeing has added almost 30,000 workers in Washington since the lower rates were first enacted in 2003.
"The 2013 incentives require Boeing to build the 777X exclusively in the state — an unprecedented safeguard for taxpayers," the company said in the statement. "Changing the legislation undermines the confidence of all businesses that the state will honor its commitments."
And keeping the 777X in Washington yields more benefits than the value of the tax incentives, according to Gov. Jay Inslee. His office estimates that keeping that production line in the state will yield $21.3 billion over 16 years in fiscal benefits to the state — everything from additional business and occupation tax paid by aerospace suppliers attracted here because of the 777X to sales tax paid by aerospace workers.
More than 450 other aerospace companies also use the tax breaks, and those companies are the target of a separate bill sponsored by Rep. Mia Gregerson. It would require that they pay all their workers the state median wage — about $52,000 a year, or about $25 an hour.
An analysis by the machinists union recently found that many non-Boeing aerospace workers earn less than $15 an hour.