Bill on Boeing tax breaks rejected

  • By Jerry Cornfield Herald Writer
  • Sunday, February 14, 2016 8:32pm
  • Local News

OLYMPIA — For the second straight year, an attempt to put more strings on the state’s generous tax breaks to the Boeing Co. has failed.

But, unlike in 2015, this time it took a vote to quell those wanting to tie the amount of tax savings the company could receive to the number of jobs it maintains in Washington.

The state House Finance Committee voted 8-7 to reject a bill to reduce, and even eliminate, incentives approved by the Legislature in 2013 if the workforce shrunk too far below the 83,295 jobs Boeing reported at that time.

Seven Republicans and one Democrat united to defeat House Bill 2638 introduced by Rep. June Robinson, D-Everett. Robinson, a committee member, and six other Democrats backed the measure in the Feb. 5 vote.

“I introduced common-sense legislation to hold Boeing accountable to the taxpayers of Washington by requiring that job growth occur in order for Boeing to continue taking advantage of the tax exemption,” she said. “But, under pressure from corporate interests, the bill did not have enough votes to pass out of committee.”

Lawmakers extended those incentives to Boeing and the rest of the aerospace industry through 2040 to help land the manufacturing of the 777X passenger jet in Everett. The first planes could be ready for delivery by 2020.

In an email, Boeing spokeswoman Deborah Feldman said had the bill passed, the company “would have been hamstrung from competing to win in the market and to operate as a healthy business.”

“Legislators have considered these incentives in 2013, 2015 and now 2016,” she wrote. “Each time the result has been the same —maintaining incentives that allow Boeing to run its business, anchor Washington’s aerospace industry and significantly enhance the state’s broader economy.”

But the International Association of Machinists and Aerospace Workers District 751 and the Society of Professional Engineering Employees in Aerospace see things differently.

Since lawmakers acted in November 2013, Boeing has trimmed more than 5,000 jobs in the state with many of those getting shifted to sites in other states.

The unions worked with Robinson to craft the bill to recapture tax dollars if jobs continued to flow elsewhere. Following the committee action, union leaders said the bill’s opponents were ignoring the public’s desire to hold the aerospace firm accountable.

“With more than 4,000 jobs lost… how many more jobs must be lost before something is done?” SPEEA President Ryan Rule said in a statement.

Holding the vote did force lawmakers in both parties to get on record on the issue.

Democrats outnumber Republicans on the panel by a margin of 8-7. But one of their members, Rep. Larry Springer, D-Kirkland, had said in advance he would oppose the bill.

That meant Robinson needed support from at least one Republican.

She thought it might be Rep. Cary Condotta, R-Wenatchee, one of the bill’s two Republican co-sponsors.

But he voted against it. He said executives of Boeing and other aerospace firms made a strong case in a January public hearing not to change the terms of the 2013 deal.

“I just don’t think this is a good time to remove a tax preference and make it more difficult to compete,” Condotta said. “I’m not saying we won’t revisit it at some point. Right now is not the time to change it.”

The other target was Rep. Drew Stokesbary, R-Auburn, whose legislative district is home to roughly 5,500 aerospace workers.

Union leaders and Boeing representatives lobbied him hard and were in the audience the day of the vote.

“They were both giving me the stare down,” Stokesbarry said. “It was a really difficult decision and one I wrestled with for a long time.”

Stokesbary said the tentative contract agreement reached between the company and SPEEA helped push him to oppose the bill. As he understands the deal, he said it would create a financial disincentive for the company to move jobs out of state just as Robinson’s bill sought to do.

“I don’t know if the issue is 100 percent closed for me,” he said. “If it becomes apparent that this is needed and Boeing is still moving jobs even with the new contract, I told Boeing privately and in public I reserve the right to not only go to a yes but become a strong proponent of the bill in the future.”

Robinson said the outcome might have been different had the vote occurred after Boeing’s announcement Feb. 10 of potential layoffs in its commercial airplane division. That news may still stir House leaders to revive the bill this session, she said.

“I’m not ruling it out,” she said.

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

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