Tax breaks cloud talk on aerospace industry

  • By Jerry Cornfield Herald Writer
  • Wednesday, February 3, 2016 8:54pm
  • Local News

OLYMPIA — Gov. Jay Inslee on Wednesday trumpeted the accomplishments of Washington’s aerospace industry the past century and declared “the sky’s the limit” in the years ahead.

“We’re growing everywhere we want to grow. We look forward to another 100 years, at least,” he told a room full of executives of aerospace firms, including the Boeing Co. which is the state’s largest private sector employer.

But Inslee, without mentioning Boeing by name, cautioned that a recent decline in jobs may compel the state to look to link industry-wide tax breaks with levels of employment.

“It is a frustration that Washington machinists and engineers have lost jobs after the aerospace incentive package was enacted awhile back,” he said at the event hosted by the Aerospace Futures Alliance.

“I don’t know that anyone has figured out the perfect answer to this problem,” he continued. “But I do believe that some measure of future job accountability is worth considering as maintaining and growing our aerospace industry is a priority that I know we all share.”

Rep. June Robinson, D-Everett, has introduced a bill this year to require the company to maintain certain job levels in order to reap the full benefits of tax incentives extended to the industry in 2013.

That deal, which helped secure manufacturing of Boeing’s 777X jetliner in Everett, will save the aerospace industry an estimated $8.7 billion in tax payments through 2040, with the bulk of it accruing to Boeing.

As written, her House Bill 2638 would result in the aerospace icon losing half its tax breaks because it’s trimmed 4,000 jobs in Washington in the past two years.

She tried something similar in 2015 without success. This year, two Republican lawmakers signed on as co-sponsors which helped it receive a hearing in the House Finance Committee on Jan. 19.

But the chairwoman of the committee, Rep. Kristine Lytton, D-Anacortes, told reporters last week it won’t be coming up for a vote.

“I’m disappointed,” Robinson said earlier this week. “I knew we had more momentum this year than the last.”

Meanwhile, on Wednesday, Robinson’s effort drew minimal attention probably because most of those attending knew its fate.

No one quizzed the governor about the bill or his comments. And a Boeing official only referred to Robinson’s bill indirectly.

The legislation that passed in 2013 “has a very strict clawback provision that we are complying with,” said Susan Champlain, Boeing’s director of state and local government operations in the Pacific Northwest region.

Sen. Steve Hobbs, D-Lake Stevens, said if it did reach the Republican-controlled Senate, “I don’t think it ever has a chance of coming up” for a vote.

As for his view, he said he’s opposed.

“We all made an agreement and we all shook hands and we need to move on,” he said.

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