Boeing tax break on track for swift passage from state Legislature

Inslee says lawmakers must act quickly with 56,000 jobs at stake and the world waiting to ‘poach’ them away

Staff writersNovember 8, 2013 

Wash. Gov. Jay Inslee speaks to reporters Friday about the need for a transportation package as part of legislative incentives to ensure Boeing builds its 777x airplane in Washington state.

MELISSA SANTOS — Staff writer

The $8.7 billion tax incentive package to weld Boeing’s 777X manufacturing work to Washington state for the long term was clearing its first legislative hurdles Friday.

Lawmakers in the state House and Senate hoped to give it final votes as soon as Saturday morning, possibly leaving a transportation tax deal for another day. Gov. Jay Inslee called them to Olympia for a special session that began Thursday.

“This is a recommittal of a marriage between Washington state and the Boeing Co. and the aerospace industry,” said House Finance Chairman Reuven Carlyle, D-Seattle, after his committee agreed to extend the favorable tax rates for aerospace for 16 years, until 2040. “It’s an essential commitment.”

Few lawmakers are opposing the measure in public, and the tax bill passed on a 10-3 vote in Carlyle’s committee. Support is strong in the Senate, too, for both the tax plan and a bill putting more public dollars into community college training programs for aerospace workers.

“I’m confident that support is there in both caucuses’’ to pass the Boeing policy bills, Senate Republican Leader Mark Schoesler of Ritzville said.

Gov. Jay Inslee, who wants a transportation deal as well as a tax deal favorable for aerospace, made pitches for both pieces Friday.

He said 56,000 jobs depend on the state winning a long-term commitment from Boeing in exchange for lowering taxes through 2040.

“People around the world are envious and want to poach these jobs from the state of Washington. There are 49 governors that will be calling Boeing if, in fact, this doesn’t go through this week,” Inslee said of the bills lowering taxes for aerospace and investing more in aerospace worker training programs. “I can tell you we are at risk if we do not move forward on multiple tracks to assure these jobs.’’

It was less clear when a transportation deal might emerge out of the special session — or if a roads package would come together at all.

Inslee reiterated Friday that he believes transportation improvements and a tax plan to pay for them are critical to ensure that Boeing builds the 777X in Washington. Inslee called a meeting between transportation leaders Friday “very productive” and said talks would continue Saturday morning.

Senate Majority Leader Rodney Tom said he hopes the Legislature can adjourn Saturday after passing the tax and training bills. Schoesler said that is his preference, as well, while House Majority Leader Pat Sullivan, D-Covington, said the House Democrats had not decided.

Tom, a Medina Democrat who leads a coalition of mostly Republicans, said he wasn’t so sure the Legislature needs to reach a transportation deal in the next week to cement Washington as the manufacturing home of the 777X.

“Boeing has been clear they want a transportation package,” Tom said. “But Boeing has been saying they want a transportation package for the past several years.”

Neither Tom nor Schoesler would specify details Friday of what they hoped a transportation package would include.

Yakima Sen. Curtis King, the Republican co-chairman of the Senate Transportation Committee, didn’t return calls for comment Friday.

But Tom made a pitch for taking time with it, noting his caucus had led a series of town hall meetings around the state to talk to skeptical voters. “The worst thing we can do is jam out a package out of Olympia that then gets the thumbs down when the voters get their final say” if it is challenged by referendum, Tom said.

Lawmakers are not the only player in the game. Boeing Commercial Airplanes and its Machinists Union must also agree on a long-term labor contract — which appeared in jeopardy Friday. On Thursday night, after a heated meeting with members, Machinists District 751 President Tom Wroblewski tore up the company’s latest contract offer, which the union is scheduled to vote on next week.

Boeing Co. Commercial Airplanes Chief Executive Ray Conner on Friday urged union members to consider a new labor contract that would help ensure that Boeing builds its newest jet in the Seattle area.

The letter, handed out on the factory floor Friday, warned that Boeing’s major “competitor wants to take more than 60 percent of the market,” referring to Airbus.

Boeing said Friday that without the labor deal and a set of tax breaks and other legislative measures, it will consider building the jet elsewhere.

“I urge you to take the time to fully understand this proposal, and to talk with your family to determine how this affects our future,” Conner wrote.

Against that backdrop, most lawmakers were staying focused on legislative proposals, saying they needed to let Boeing and the labor union work out their differences.

Brad Shannon: 360-753-1688
Melissa Santos: 360-357-0209
Reuters contributed to this report.


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