Name a tax and there’s a break for it.
Actually the number of tax exemptions dwarfs the specific taxes that generate revenue for the state. More than 600 tax exemptions are on the books in Washington state.
You’ve heard the most about tax breaks for the Boeing Co., because it’s the big dog in terms of the tax incentives it receives, which is, itself, a reflection of the size of its economic presence in the state.
Earlier this week, in advance of submitting a required report to the state Department of Revenue, Boeing announced it had recorded $304.8 million in state tax savings in 2015. Added to the $217 million in savings from 2014, that’s more than half a billion dollars in the last two years.
The state’s other economic heavy hitters also benefit, as was reported Wednesday by The Herald’s Dan Catchpole and Jerry Cornfield. Among them, according to preliminary reports the Department of Revenue is expected to update later this month, Microsoft saved $163.7 million last year and Amazon recorded nearly $35 million in savings.
While beneficial to those businesses’ bottom lines, the tax breaks are a deal meant to secure a benefit for the state’s residents. Tax breaks are the multi-tool of lawmakers. The state provides a property tax break to seniors who meet age and income requirements to help them stay in their homes. Other tax breaks encourage policy goals related to education, environment, transportation and other issues. And, in the case of businesses, the incentives are meant to promote jobs and the economy.
Boeing, in announcing its tax break this week, also took the opportunity to remind taxpayers of the billions it has invested in the state and in Snohomish County, including the construction of the new 777X assembly line in Everett.
But there’s been an ongoing debate about whether the tax breaks Boeing received should have resulted in a stronger guarantee of jobs than state legislators secured. In extending a total of $8.7 billion in tax breaks for Boeing and the rest of the aerospace industry in 2013, which secured the 777X line for Everett, some have objected to recent Boeing job cuts and transfers out of Washington state. State Rep. June Robinson, D-Everett, has twice proposed legislation that would require Boeing and others to meet certain job targets to continue to qualify for the tax incentives.
Two Everett officials represent the respective sides of the debate well in Catchpole’s and Cornfield’s story. County Councilmember Brian Sullivan says the “tax shift” for Boeing and others means that taxpayers have to make up the difference in needed revenue. While Everett Mayor Ray Stephanson points to the $13 billion invested by Boeing last year in the state that might have been lost without the tax breaks.
It’s not a simple calculus, weighing what the state concedes in tax breaks against the benefits now and in the future in jobs, economic growth and even the potential for additional tax revenue.
That evaluation, however, now benefits from a recent law that requires Boeing and other industries to provide an accounting of what the tax breaks provide them. Public release of those reports wasn’t certain until earlier this year when, following an appeal by The Seattle Times, the Department of Revenue agreed to make the reports public now, rather than relying on an absurdly literal translation that information couldn’t be released until a 2003 package of tax breaks expired in 2024.
Now, at least, we have one side of the equation to inform that debate.