A lawmaker from Washington state introduced a bill on Monday that could reduce the value of Boeing’s tax incentives if the company does not create what the company calls an “arbitrary” number of jobs in the state. The measure, sponsored by state representative June Robinson, would tie tax breaks for Washington’s aerospace companies to a requirement that they maintain a certain level of employment.
Figures cited by the Society of Professional Engineering Employees in Aerospace (SPEEA) show that Boeing has reduced the size of its employment rolls in Washington by more than 3,000 since November 2013, when the state’s governor, Jay Inslee, called a special session of the legislature to extend aerospace tax preferences to 2040 in exchange for Boeing’s pledge to build the new 777X widebody there. The extension amounts to $8.7 billion worth of tax breaks, according to SPEEA.
“Within days of getting tax breaks from Washington, Boeing started moving work out,” said SPEEA executive director Ray Goforth. “Boeing cuts employment in Washington and moves the work to states that required the company to add workers in exchange for tax breaks. Boeing doesn’t add a single employee, but is able to get tax breaks from two states.”
South Carolina, for example, required Boeing to create 3,800 jobs in return for $900 million in tax incentives for locating a second 787 plant in North Charleston. Four years later, South Carolina gave Boeing a new, $120 million tax incentive package to expand the plant. However, in exchange for the tax break, Boeing had to agree to create another 2,000 jobs for South Carolina.
“Our legislation will ensure aerospace tax incentives are used to benefit the people who grant them—taxpayers in Washington,” said Robinson. “Other states require Boeing to bring jobs to receive tax breaks and it’s only fair that the citizens of Washington demand the same treatment.”
Boeing, however, disputes the premise that a lack of an employment level proviso in Washington’s tax incentive package in any way compromises accountability, calling the 2013 incentive’s requirement that Boeing build the 777X in the state “an unprecedented safeguard for taxpayers.”
“Washington state’s aerospace tax incentives have the strictest accountability standards of any incentives in the state,” said Boeing in a statement.
The company estimates that the 777X program will support more than 56,000 jobs in Washington state alone, and employ about 10 percent more Boeing employees than the current 777 program does. Since Washington granted $3.24 billion in tax incentives in 2003, Boeing has added nearly 30,000 employees in the state, the company adds.
“Washington’s aerospace incentives are also used by more than 450 aerospace companies in communities across the state, from Vancouver to Bellingham to Spokane, which have created significant numbers of jobs in the last decade,” said Boeing. “Changing the legislation undermines the confidence of all businesses that the state will honor its commitments...Attaching arbitrary job creation numbers to an industry that is already boosting Washington’s economy is harmful and unnecessary, and Boeing strongly opposes such a change.”