Democrats willing to exempt Boeing from higher business taxes

Democrats hope to rely partly on higher business taxes to comply with a court ruling on state education funding. But The Boeing Co. would be exempt.

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In announcing their budget plan Monday, House Democrats didn’t explain why Boeing wouldn’t be included, other than to say it was a compromise made to ensure their plan would move forward.

The aerospace company has benefited much from tax breaks in recent history. Just last year, for example, The Seattle Times reported tax breaks saved Boeing about $500 million over the past two years. In 2014, Boeing saved $217 million. In 2015, it saw a savings of $305.

More tax breaks would come as Boeing trims its workforce in order to stay competitive in the market. At least 170 Boeing workers in the Puget Sound area received layoff notices on March 17.

When it comes to the budget, Representative Kristine Lytton says another exception will have to be made when it comes to class sizes.

“While we continue to make progress on class size reduction we do delay the provisions of Initiative 1351 for another two years as we continue to focus on more pressing needs moving forward,” she said.

Overall, the Democratic budget includes more than $7 billion in additional funding for education over the next four years. The Democrats’ $44 billion budget includes about $3 billion in new taxes. The Democratic budget relies on raising business taxes and a new 7 percent capital gains tax.

Tacoma Representative Laurie Jenkins says Washington state is one of the only states that doesn’t tax capital gains right now.

“We are so outside the mainstream and how we’re handling capital gains in the fact that we’re not handling it at all.”

Funding education may be the priority, but Democrats say their budget proposal would also support some of the state’s most vulnerable by pumping billions into human service programs.

It’s a stark contrast to the Republican proposal released last week, which relies on government cuts and a property tax swap to fund education.

Republican Senator John Braun says the House plan uses education as an excuse to raise taxes for everything else.

“Our proposal and their proposal is similar. If anything we’re higher in K-12, and yet they need $8 billion over the next four years to pay for theirs. That tells me these taxes are not about K-12. They are about everything but K-12.”

The House proposal was set for it’s first public hearing later Monday.