Talmadge criticizes Boeing tax deal, and Locke fires back

OLYMPIA — Gov. Gary Locke blistered gubernatorial candidate Phil Talmadge, a fellow Democrat, on Tuesday for complaining about tax giveaways for the aerospace industry.

Talmadge, a 16-year veteran of the state Senate, said the Olympia establishment, including the governor, has unwisely offered special favors to the Boeing Co. He said Washington needs a "Declaration of Economic Independence."

Talmadge, who complained of a "crisis in leadership," said the key to the state’s economic resurgence is "diversity, not dependence" on Boeing and other big businesses.

Locke, who is informally backing Attorney General Christine Gregoire for the Democratic gubernatorial nomination, said his former legislative colleague was ill-informed and dead wrong. Boeing is a crucial part of the state economy and is a good corporate neighbor, Locke said.

"Another typical tirade of Phil Talmadge," said the outgoing governor, who proposed the multibillion-dollar tax break for the aerospace industry and other legislation backed by Boeing this year.

The tax breaks trigger only if Boeing builds its proposed new jetliner in Washington state, and won’t cost the treasury much before 2007, the governor told reporters.

"I discount much of what Phil Talmadge says," Locke fumed.

The governor went on the radio to complain about Talmadge and to characterize his campaign as fizzling.

Talmadge said he was astonished at Locke’s comments.

"If anyone’s engaged in a tirade, it sounds like the governor is," he said. "I tried to engage in some policy discussions, and he is making it personal.

"The governor apparently has no answer on the merits, so he will engage in an attack on my campaign. It looks like my criticism must have hit home."

Talmadge, a former state Senate leader and retired Supreme Court justice who has struggled to get traction for the 2004 Democratic primary, picked an unusual target to try to create sparks for his campaign.

"It certainly has an element of risk," he said after a Seattle news conference Tuesday. "But that’s what leadership is about. I’ve never shied away from taking on the interests that the traditional establishment protects."

He said the Legislature should revisit and possibly repeal the $3.2 billion, 20-year package of tax breaks that Locke and bipartisan majorities pushed through earlier this year for Boeing and the industry.

The breaks are contingent on Boeing assembling its next-generation jetliner, the 7E7, in Washington.

Boeing spokeswoman Mary Hanson, asked about Talmadge’s comments, said, "We at Boeing appreciate the leadership shown by Gov. Locke and the Legislature as they work to improve the business climate in Washington."

Talmadge, an appeals attorney who lives in West Seattle, said he has no personal animosity toward Boeing. "They provided me my National Merit Scholarship (to go to Yale), and my mother worked at Boeing," he said.

But he said the company throws its weight around in Olympia, asks for special treatment and then gives the state the back of its hand — as when the company moved its headquarters to Chicago and, more recently, when it sought concessions from local unions.

Legislators are far too compliant, he said.

Talmadge accused Boeing of turning its back on a region that has "poured its sweat, tears and soul" into the company.

"For corporate executives to say Washington’s business climate sucks is an insult to the workers who have given their whole lives to the company," he said, referring to a recent comment about the state’s transportation system by Alan Mulally, the head of commercial airplanes for Boeing.

"This state has been very responsive to Boeing over the years," Talmadge said. "There is no sales tax on airplanes, when every other business pays the sales tax."

The company embraced the tax breaks but made no commitment to the state, Talmadge said. It’s not clear how many actual 7E7 jobs would be created in Washington, or for how long, he said.

The Legislature should help all companies, not just a favored and powerful few, he said.

His comments drew criticism from Gregoire’s campaign.

"Boeing is and will continue to be an important employer and a big part of Washington’s future," Christian Sinderman, Gregoire’s campaign consultant, said. "To go on this kind of tirade seems counterproductive."