Andy Bronson / The Herald                                Boeing’s first 777X taxies before its maiden flight from Paine Field in Everett on Jan. 25.

Andy Bronson / The Herald Boeing’s first 777X taxies before its maiden flight from Paine Field in Everett on Jan. 25.

This Boeing deal could have ‘clawbacks’ in the ‘snap-back’

The company wants a tax break temporarily repealed. Some don’t want to give it back without new conditions.

OLYMPIA — Gov. Jay Inslee and state lawmakers moved swiftly during a 2013 special legislative session to give the Boeing Co. a lengthy extension of tax incentives to land assembly of the 777X in Everett.

When Inslee, in just his 11th month as chief executive, signed the package, he said it would secure Washington’s place as the world’s leader in aerospace. Not to mention save the industry giant around $8 billion in future tax payments to the state.

But the governor and the current batch of lawmakers aren’t moving anywhere near as swiftly on legislation sought this week by Boeing to get rid of one of those incentives. That’s because folks aren’t looking back so fondly on what’s occurred since. This time they want to do more than just say yes.

ADVERTISEMENT
0 seconds of 0 secondsVolume 0%
Press shift question mark to access a list of keyboard shortcuts
00:00
00:00
00:00
 

In the months after that 2013 special session, Boeing shed jobs through layoffs, buyouts and transfers to sites in other states.

Aerospace workers and a handful of Democratic lawmakers said the state gave Boeing too good a deal by not prohibiting the company from shifting hundreds of jobs to other states without penalty. Some of those jobs, unions pointed out, went to Missouri, which offered Boeing tax breaks as long as the firm created 2,000 new jobs.

Labor advocates have sought to rewrite the terms to let Washington “claw back” some of the generous incentives in the event aerospace companies fail to create and retain union jobs.

It’s been futile — though maybe not for much longer.

Boeing’s new request is to repeal one of those incentives, a 40% lower tax rate. Doing so could clear the way for resolution of a messy and lengthy trade dispute between the U.S. and the European Union, home to rival jet-maker Airbus. Absent such a settlement, the European Union is poised to impose up to $22 billion in tariffs on U.S. products this summer, about a third of that on Boeing planes and exports of Washington wine, fruit and seafood.

Boeing wants that lower tax rate again someday. Under legislation in the state House and Senate, the tax break would be restored when the U.S. and E.U. reach agreement to resolve World Trade Organization disputes regarding large civilian airplanes.

Union leaders and Democratic lawmakers are OK with repealing the tax break, but they want “clawbacks” in the “snap back” — which is what folks call a provision allowing later restoration of the lower tax rate.

This is an opportunity to hold Boeing’s corporate toes to the fire, and union leaders and lawmakers don’t want to miss out.

They are interested in adding language about things like retaining jobs, employing apprentices and expanding training. An aerospace machinist leader even thinks Boeing should have to commit to building its next new airplane in Washington if it ever wants the lower tax rate reinstated.

Enter Inslee. This might be another moment for him to redeem himself with veteran union members and pro-labor Democrats. They’ve neither forgotten nor fully forgiven the governor for his zeal for the 2013 deal and subsequent distance from their clawback efforts in the Legislature.

It’s no secret Inslee, too, is sour on Boeing. He’s gone on national television and likened what transpired to “corporate extortion” and “blackmail.”

In March, while campaigning for president, he dropped by “The Daily Show,” where host Trevor Noah asked why he gave Boeing the tax break.

“Look, if you’ve ever been mugged, you understand what it feels like,” Inslee said. “I was not happy about the Boeing situation. What happens is these corporations put a gun to your ribs and say, ‘You’re going to lose 20,000 jobs unless you give us a tax break.’”

This is Inslee’s chance for political payback. Not too much, though. The threat of tariffs is real, and Inslee would be among those loudly vilified if legislative inaction leads to the imposition of tariffs. The governor needs to extract a concession that benefits the state, and one which Boeing can tolerate and won’t derail a resolution to the trade dispute. It’s got to happen fast, because the legislative session is winding down.

One approach could be as simple as delaying the restoration of a lower tax rate for an agreed period. Lawmakers and the governor would gain a windfall of tax collections, around $115 million a year, which they could pledge to any number of undertakings. (Republicans are already offering ideas.)

Within that period, interested parties could keep chatting about ways to permanently amend the long-term agreement.

Moving too quickly is what lawmakers said got them a bad deal before.

Moving too quickly now might not get them the best one now.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Everett Historic Theater owner Curtis Shriner inside the theater on Tuesday, May 13, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Historic Everett Theatre sale on horizon, future uncertain

With expected new ownership, events for July and August will be canceled. The schedule for the fall and beyond is unclear.

Contributed photo from Snohomish County Public Works
Snohomish County Public Works contractor crews have begun their summer 2016 paving work on 13 miles of roadway, primarily in the Monroe and Stanwood areas. This photo is an example of paving work from a previous summer. A new layer of asphalt is put down over the old.
Snohomish County plans to resurface about 76 miles of roads this summer

EVERETT – As part of its annual road maintenance and preservation program,… Continue reading

City of Everett Engineer Tom Hood, left, and City of Everett Engineer and Project Manager Dan Enrico, right, talks about the current Edgewater Bridge demolition on Friday, May 9, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
How do you get rid of a bridge? Everett engineers can explain.

Workers began dismantling the old Edgewater Bridge on May 2. The process could take one to two months, city engineers said.

Smoke from the Bolt Creek fire silhouettes a mountain ridge and trees just outside of Index on Sept. 12, 2022. (Olivia Vanni / The Herald)
County will host two wildfire-preparedness meetings in May

Meetings will allow community members to learn wildfire mitigation strategies and connect with a variety of local and state agencies.

Helion's 6th fusion prototype, Trenta, on display on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Helion celebrates smoother path to fusion energy site approval

Helion CEO applauds legislation signed by Gov. Bob Ferguson expected to streamline site selection process.

Vehicles travel along Mukilteo Speedway on Sunday, April 21, 2024, in Mukilteo, Washington. (Ryan Berry / The Herald)
Mukilteo cameras go live to curb speeding on Speedway

Starting Friday, an automated traffic camera system will cover four blocks of Mukilteo Speedway. A 30-day warning period is in place.

Carli Brockman lets her daughter Carli, 2, help push her ballot into the ballot drop box on the Snohomish County Campus on Tuesday, Nov. 5, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Here’s who filed for the primary election in Snohomish County

Positions with three or more candidates will go to voters Aug. 5 to determine final contenders for the Nov. 4 general election.

Students, educators speak out against Early Learning Center closure

Public commenters criticized Everett Community College for its handling of the closure. The board backed the move, citing the center’s lack of funding.

A ferry passes by as Everett Fire Department, Everett Police and the U.S. Coast Guard conduct a water rescue for a sinking boat in Possession Sound off of Howarth Park on Wednesday, May 21, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Searchers on the scene of sunken boat near Howarth Park

A good Samaritan rescued one person from the water. Crews are still searching for three others.

Gov. Bob Ferguson’s signature on the the 1,367 page document outlining the state’s 2025 operating budget. (Photo by Jacquelyn Jimenez Romero/Washington State Standard)
Ferguson signs budget boosting Washington state spending and taxes

The governor used his veto pen sparingly, to the delight of Democrats and the disappointment of Republicans.

Madison Family Shelter Family Support Specialist Dan Blizard talks about one of the pallet homes on Monday, May 19, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Madison Family Shelter reopens after hiatus

The Pallet shelter village, formerly Faith Family Village, provides housing for up to eight families for 90 days.

Washington State Trooper Chris Gadd is transported inside prior to a memorial service in his honor Tuesday, March 12, 2024, at Angel of the Winds Arena in Everett, Washington. (Ryan Berry / The Herald)
Jury selection begins in Everett trial of driver accused in trooper’s death

Jurors questioned on bias, media exposure in the case involving fallen Washington State Patrol trooper Chris Gadd.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.