A group of Democratic lawmakers in the Washington House of Representatives is trying again to link Boeing’s tax break to the number of jobs the company keeps in the state. This time, they’ve won support from two Republicans: Rep. Cary Condotta, who represents the Wenatchee area, and Rep. Richard DeBolt from Chehalis.
Boeing’s two biggest unions have pushed for this bill because the company has been shedding jobs ever since the state extended its aerospace tax breaks in late 2013. Boeing’s workforce in Washington state has shrunk by about 4,000 positions.
June Robinson is a Democratic representative from Everett, the site of one of Boeing's factories. She put forward a similar bill last year that didn’t win any Republican co-sponsors, but she says Republicans are starting to come around to the idea of making Boeing’s tax breaks contingent on keeping a certain number of jobs here.
"The idea, the whole purpose behind the tax break was to maintain and grow jobs here, and in fact that’s not what’s happening," Robinson said. "So I think we’ve just seen frustration around this issue continue to grow."
This year’s bill isn’t as tough as last year’s. This one ratchets up the tax rate if Boeing cuts more than 4,000 jobs. Last year’s version would have forced Boeing to boost its headcount back up to the number of workers it had in late 2013 in order to get the lowest tax rate.
Boeing's Opposition
Bill McSherry, Boeing's vice president of government operations and global corporate citizenship, spoke out against the bill at a House Finance Committee hearing on Tuesday. He said the tax incentive package already includes a tough accountability measure that would remove the tax breaks if Boeing ever opted to move production of the 777X wide-body jet out of the state.
And he said the bill would make it hard for Boeing to adjust its workforce in response to downturns in the aerospace industry.
"Today we face a highly subsidized competitor who is intensely focused on lowering its cost structure. We also are seeing a slowdown in some of the world's economies, bringing newfound uncertainty to our business," McSherry said. "When the inevitable downturn comes, this legislation will prevent Boeing from expanding and contracting to meet the world's changing needs."
But former Boeing workers urged lawmakers to pass the bill, giving personal examples of how their jobs were cut at a time when Boeing has been delivering a record number of airplanes and has about 5,800 unfilled orders.
`Bargaining In Bad Faith'
Jeff Kollgaard told legislators that he was laid off from Boeing's research and technology unit last July.
"A company has the right to start up business in another state and has the right to make those types of decisions, but to do that while accepting tax incentives, which are designed to increase aerospace employment just seems wrong," Kollgaard testified. "It's bargaining in bad faith."
Terri Parsons said that she had been working for Boeing since 1988, most recently working on maintenance training for pilots and mechanics. She said she and about 70 other coworkers were recently told their jobs were being outsourced to out-of-state companies. Then she said she was told to train her replacement.
"My work group contained hundreds of years of experience and we worked for many years together, side by side," Parsons said. "We just lost our jobs because we cost money."
