Missouri senate OKs $1.7 billion in Boeing incentives

Missouri’s enticement package for a new Boeing assembly plant cleared its most daunting obstacle Wednesday as state senators passed a plan that could offer up to $1.7 billion of incentives over two decades.

The Senate’s 23-8 vote in a special session sends the measure to the House, where final approval could come as soon as Friday.

Then it will be up to Boeing to determine how Missouri’s offer stacks up.

Missouri is among more than a dozen locations invited by Boeing to bid on assembling all or part of its new 777X airplane. The cross-country competition includes states such as Alabama, South Carolina and Utah and comes after union machinists in Washington state rejected a proposed Boeing contract that sought concessions on benefits.

While his home state lawmakers were considering incentives, Missouri congressman Blaine Luetkemeyer met Wednesday in the nation’s capital with Boeing CEO James McNerney.

“He didn’t tip his hand as far as whether Missouri was ahead or behind in regards to the decision to be made. Obviously, they’re going to wait until all the proposals have been received,” Leutkemeyer said. “But he was very supportive of the people who work for Boeing right now in St. Louis.”

Missouri already makes military aircraft in the St. Louis area, and Boeing employs about 15,000 people in Missouri, making it the state’s fourth-largest private sector employer.

A Boeing spokesman has said the company isn’t commenting about specific proposals being developed by states, which are due by next Tuesday.

Most states are crafting their proposals privately. But Missouri Gov. Jay Nixon called a special session because he wanted to offer more incentives than currently allowed under state law.

Nixon, a Democrat, on Wednesday praised the Senate’s bipartisan vote for the incentives. Majority party Republicans split in the Senate, with 15 supporting the legislation and eight opposing it. All eight Democrats who were present voted “yes.”

The legislation “will put Missouri in a strong position to win the Boeing 777X and create thousands of new high-paying jobs across our state,” Nixon said.

Boeing has said that the 777X should be larger — carrying as many as 400 passengers instead of 365 — and more fuel efficient than the current 777. It already is taking orders for the new airplane and is aiming to deliver the first jets by the end of the decade.

Under Missouri’s proposal, the amount of incentives Boeing gets would depend on the number of jobs created.

Supporters of the incentive package say Missouri could gain 8,000 additional Boeing jobs if it chooses to assemble the new commercial airplane in Missouri, and 2,000 to 3,000 jobs if Boeing decides to build only the airplane wings in St. Louis. Thousands of additional employees could be added at businesses that supply parts to Boeing.

Boeing could get an aggregate of about $435 million of incentives by 2040 if it adds 2,000 jobs in Missouri and up to $1.74 billion if it adds about 8,000 jobs, according to an analysis released by Nixon’s office.

The company also could receive a still unspecified amount of aid from local St. Louis-area governments.

“These are high quality, good-paying jobs that are around for a very long time,” said Sen. Eric Schmitt, R-Glendale, who sponsored the legislation. “These are the kind of jobs you want for your state.”

Some senators who voted against the Boeing incentives questioned the wisdom of tailoring tax breaks for a specific company instead of cutting taxes for all businesses or individuals. Nixon vetoed a broad-based income tax cut earlier this year, and Republican legislative leaders are expected to push again in 2014 for another general income tax cut.

•Wisconsin economic development officials are crafting a proposal for Boeing to build its new commercial airplane in the state. The Wisconsin Economic Development Corporation said Wednesday that Wisconsin was not one of the states Boeing approached to submit a request for proposal. However, WEDC is developing a proposal for Boeing with plans to present it soon.

•Alabama Governor Robert Bentley said Alabama will be among the states submitting a proposal next week to land the assembly plant for Boeing’s new 777X aircraft. Bentley said he will meet today with the state’s chief industrial recruiter, Greg Canfield, to work on the proposal.

•Kansas officials said Wednesday they were optimistic that an economic incentive package geared at landing a Boeing contract to build the 777X commercial aircraft will pay off. The Kansas package would likely span several years and be worth tens of millions to Boeing through credits and other financial incentives.