Bill would kill Boeing tax breaks

A Mount Vernon lawmaker wants to claw back tax breaks from the Boeing Co. if the company ever starts building the majority of its 787 Dreamliner jets outside Washington state.

Rep. Jeff Morris, D-Mount Vernon, is proposing the take-back in response to Boeing’s decision last fall to set up a second 787 final assembly line in Charleston, S.C., rather than in Everett, where the original 787 line is located. Washington lawmakers approved $3.2 billion in tax incentives in 2003 to win the initial 787 line. As of Monday, a hearing on the bill had not been scheduled.

“Boeing has changed the nature of our relationship with the South Carolina decision,” Morris said. “They made a business decision. This is a business decision we need to make to protect Washington state taxpayers’ interest.”

Morris’ legislation, House Bill 3107, would eliminate Washington’s tax incentives for Boeing or for “airplane manufacturers transferring substantial manufacturing operations to other states.” The bill defines “substantial” as “more than 50 percent.”

When Boeing ramps up production on its delayed 787, the majority of final assembly will remain here in Everett. Boeing has said it plans to produce each month seven 787s in Everett and three in South Carolina. Therefore, Boeing would still get its tax incentives here under Morris’ bill and the company will get the nearly $1 billion in incentives offered by South Carolina, as estimated by the Post and Courier newspaper of Charleston, S.C.

Morris said that he wants to insert in state law the same type of protections of taxpayer dollars as South Carolina wrote into its agreement with Boeing. It behooves to state to take steps to protect the investment of taxpayer dollars, he said. Morris said he had spoken with House Speaker Frank Chopp, Boeing representatives, other aerospace officials before filing the bill.

But Morris’ bill isn’t likely to win support from Mike Hewitt, R-Walla Walla.

“It’s pathetic. Why don’t we just send Boeing a letter and ask them to leave,” said Hewitt, who serves on the Washington Council on Aerospace.

Boeing also won’t support Morris’ legislation, said company spokesman Bernard Choi. Regardless of Boeing’s work in South Carolina, the company, which employs more than 70,000 workers in Washington, remains committed to Washington state, Choi said. In 2008, Boeing donated $24 million to various projects and charities in the state and made $3.6 billion in payments to suppliers here, he said.

“I don’t know how you don’t call that a partnership,” Choi said.

But Morris isn’t the only lawmaker still smarting from Boeing’s South Carolina pick. Rep. Brendan Williams, D-Olympia, has sponsored legislation that would require Boeing and other aerospace firms to demonstrate their loyalty to the state or face the loss of the tax breaks they receive. Williams’ legislation has 14 sponsors, including lawmakers from Snohomish County.

“Washington taxpayers’ dollars should not be invested in South Carolina,” Williams wrote in an e-mail.