Unions again working to tie Boeing tax breaks to job retention

OLYMPIA — The two largest aerospace worker unions will try again to tie the future of the state’s huge tax break for the Boeing Co. with the number of people the plane-builder employs in Washington.

Officials with the Machinist and the engineer unions say a response is needed to the company’s steady shedding of jobs since the Legislature extended those tax incentives to help land the 777X program.

They point to the company’s employment data showing there are 11,414 fewer Boeing workers in Washington than when lawmakers approved the extension in a hurried special session in November 2013.

Meanwhile, Boeing used those incentives to save nearly $217 million in tax payments in 2014 and $304.8 million in 2015, according to state data. And it could add up to as much as $8.7 billion through 2040, they note.

“It is amazing,” said Larry Brown, political director of the International Association of Machinists and Aerospace Workers District 751 .

Machinists and the Society of Professional Engineering Employees in Aerospace contend the state gave Boeing too good a deal and are drafting a bill to revise the terms. There’s no time frame for when it will be finished and introduced.

“We do not have all the particulars settled so far,” Brown said. “We’re going to attempt to provide legislation that hopefully will protect jobs for Washington state so that Boeing will not be permitted to move jobs out of state without that affecting their tax break.”

The two unions also might need someone to find a sponsor for the bill. Rep. June Robinson, D-Everett, championed the cause the past two years. But she’s not yet committed to do so again because of other legislative initiatives.

“There’s conversation. There’s interest,” Robinson said in a recent interview. “The Legislature continues to watch this. A lot of folks are dismayed at the continuous job losses.”

Bills carried by Robinson in 2015 and 2016 sought to require Boeing sustain a minimum number of jobs in Washington in order to reap the full benefits of the incentives. Under those bills, the company faced the loss of its tax break if its total workforce dipped below a certain threshold.

This year’s version will likely focus on the shipping of jobs to other states and not contain any threshold, Brown said. And it will not “punish” Boeing for job-related moves caused by a downturn in the aerospace industry, he said.

Even with a retooled approach, the union will face long odds at getting anything passed. Robinson’s bills lapsed in the House Finance Committee the past two years and there are no signs the panel would act differently in 2017. No tax break bill has been heard in the Republican-controlled Senate the past two sessions.

It’s also unclear what degree of support they can count on from Democratic Gov. Jay Inslee.

A year ago, in a speech to executives of Boeing and other aerospace firms, Inslee warned that accountability measures might be needed if the outflow of jobs could not be stemmed. Since getting re-elected, he’s continued to express disappointment in the loss of jobs and a willingness to listen to proposals. At the same time, he’s focused on passing a plan to fully fund public schools.

“There have been decisions by management that have been disappointing that are not necessitated by lack of orders, that are not necessitated by recession, are not necessitated by any WTO (World Trade Organization) decision, but simply an effort to move some jobs out of state. That’s not acceptable to us,” he said in a recent interview in Everett.

“I’m open to ideas,” he said. “I’ve got a principal obligation right now to finance schools. But I’m happy to consider ideas that will improve employment because we know people are concerned about this.”

Union leaders said that’s the message they heard when they met with the governor in November.

“We’re hopeful. He seems to be more open to look at it. Certainly the discussions in Olympia have changed,” said SPEEA spokesman Bill Dugovich, a reference on the Legislature’s focus on school funding this session. “We certainly realize that bringing up the jobs issue is important.”

Meanwhile, Boeing and Aerospace Works for Washington, a newly formed alliance of businesses and government leaders, is primed to oppose any clawback bill. Snohomish County Executive Dave Somers and Everett Mayor Ray Stephanson are members of the new coalition, as is Boeing.

In a statement, a Boeing spokesman noted that the company has lived up to its commitments and already has invested more than $1 billion in the 777X Composite Wing Center in Everett.

“Changing the parameters of the incentives now would simply increase the cost of building airplanes in this state, and unnecessarily put excellent, family-wage jobs in Washington at risk,” said Paul Bergman, who handles communications and media relations for Boeing Commercial Airplanes division.

Hundreds of companies use the tax incentives and aerospace jobs are up overall in the state since the Legislature acted in 2013, he said.

“It’s clear the incentives are working as intended to keep the industry an economic driver for the state,” he said.

The 2017 legislative session is scheduled to run through April 23.

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

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