Does Boeing owe more for Washington tax breaks?
May 5, 2015, 1:43 PM | Updated: May 6, 2015, 9:21 am
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What is it with Oklahoma City? First the Sonics, then Woodland Park Zoo elephants, now about 900 Boeing jobs are moving there.
This despite the state giving Boeing a record $8.7 billion in tax incentives to land the 777X.
Does Boeing owe our state more? That’s the question as lawmakers in Olympia debate a measure that would tie incentives to Boeing keeping jobs in Washington state.
The company announced last fall it planned to consolidate its defense and space services in a few places including Wichita and Oklahoma City, moving hundreds of jobs out of Washington.
Boeing is now reportedly negotiating with Oklahoma City for $6 million in new incentives to relocate about 900 jobs there from Washington.
Representative June Robinson, whose district includes Boeing in Everett and thousands of Boeing workers, accuses the company of taking advantage of us.
“What we’re seeing is Boeing essentially double dipping where they’re getting their tax incentive in Washington state and then moving jobs to another state where they’re also getting tax incentives,” Robinson said of the measure she’s sponsoring.
A Boeing spokesman who didn’t want to talk on the record says the company has more than adhered to the letter of the agreement it made to build the 777X in Washington in exchange for the $8.7 Billion tax break passed in 2013.
The company provided the following statement:
“Since the 2003 incentives were enacted, Boeing has added nearly 30,000 employees in Washington. And the 2013 incentives require Boeing to build the 777X exclusively in the state-an unprecedented safeguard for taxpayers. Changing the legislation undermines the confidence of all businesses that the state will honor its commitments.
We continue to hire thousands of new employees in Washington state each year, and have publicly committed to building the 777X, including its all-new composite wing, and the 737 MAX in Washington. However, workforce adjustments are part of a long-term strategic vision to successfully manage our unprecedented backlog of more than 5000 airplanes. Competitive pressures-not to mention supply chain considerations and efforts to co-locate with customers-have compelled Boeing to diversify our footprint which, in some cases, entailed migrating functions outside the Puget Sound area.”
But Robinson says the incentive package also called for an increase in Boeing hiring, and with no word on how many new jobs the 777X will create – if any – she says there are legitimate concerns.
“Currently that is not happening. There are approximately 3,000 jobs less in Washington state than there was when that bill was passed, so we certainly are not maintaining or growing jobs,” she said.
The recent job losses have primarily hit engineers, professional and technical workers in defense, space and security.
Bill Dugovich with SPEEA, the union which represents thousands of white collar workers, argues the state needs to stand up to Boeing now before far more jobs are shipped away.
“Every other state in the country tied tax incentives to maintaining and actually enhancing jobs Washington needs to do the same and we need to do it soon before more aerospace jobs fly away,” Dugovich said.
While the job relocations have primarily targeted the white collar workers, Boeing’s machinists union worries about the long-term impact on their ranks.
“Boeing has shipped out about 3,000 jobs since November 2013 and announced plans for 3,500 more,” said Bryan Corliss with IAM District 751.
“The concern for us is once the engineering jobs go, the manufacturing jobs will follow. We have more skilled machinists and the smartest engineers. If the company continues to erode that, we lose our ability as a state to compete in the global economy,” he said.
Robinson’s bill would cut or ultimately eliminate Boeing’s tax break passed in 2013 if the number of aerospace jobs statewide falls below a certain level.
“Washington state gave Boeing the largest corporate tax incentive in U.S. history,” Dugovich said “It is only fair and right that tax breaks be tied to jobs in our state.”
The bill has been stalled in the House Finance Committee as lawmakers continue working on a state budget plan. Robinson is cautiously optimistic the measure will at least make it to the full House for a vote before the end of the special legislative session. But House leaders are likely unwilling to back the bill and tweak Boeing, and Governor Jay Inslee would almost certainly oppose it.