By Shelby Sebens | Northwest Watchdog
Boeing Co. is doing a little Christmas shopping, and it’s finding bargains galore.
States are scrambling to gather their best tax incentive packages to lure a new commercial jet from Washington after union members voted down a contract deal that could have kept the company in the Evergreen State.
Boeing is looking at more than a dozen states to build its 777X commercial jet, and the gifts are piling up — from the Missouri Legislature set to consider a $1.7 billion tax incentive plan to South Carolina’s $13.8 million land sale near an existing operation.
Some states, such as South Carolina and Alabama, are hoping their right-to-work laws, which mean employees cannot be forced to join unions or pay dues, will give them an advantage.
It’s unclear what Boeing is aiming for, exactly. A representative for the company could not be reached for comment. Washington lawmakers last month approved nearly $9 billion in tax incentives for the company, the largest tax incentive package in U.S. history. While it’s no surprise Boeing would do everything it can to get the best deal, failing to extend tax breaks to all could hurt businesses and taxpayers in Washington and elsewhere.
“If it’s good for a global corporate titan like Boeing then shouldn’t it be good for the rest of us as well?” Patrick Connor, Washington state director for the National Federation of Independent Businesses, asked Northwest Watchdog. “Maybe it’s time we have a conversation about the difficulties for all business of all sizes to be in Washington state.”
States can hardly ignore tax incentive deals these days, and the big companies know it. But what about the little guys?
“Washington is a difficult state to do business in,” Connor said.
Not just taxes. Union or not, employee wages and benefits are higher in Washington, compared to other states.
But lawmakers, even conservatives who say they want all businesses to get the same tax treatment, argue they have little choice.
“That was a really tough vote for me to vote for that tax preference, because whatever money we don’t collect from Boeing we have to collect from someone else,” state Rep. Liz Pike, R-Camas, told Northwest Watchdog. “I was fearful that, you know, this may be just a bargaining chip to take to other states.” And that’s what happened. “On one hand I feel a little duped.”
Pike voted against a part of the deal for Boeing that paved the way for more aerospace workforce training. That part, she said, was unfair to other businesses that also need access to better workforce training.
Connor said Boeing’s demands were not off the mark, but everyone else should get them, too.
“A lot of what they asked for didn’t’ seem to be necessarily unreasonable if it applied to all,” he said.
Connor and Pike pointed to a 1930s-era business and occupation tax that taxes businesses on gross receipts. Basically, the government makes money before the business or employees, even if the business doesn’t make a profit.
“We’ve got to retool how we tax business in this state, otherwise they’re going to continue to leave,” Pike said.
The stalemate between the machinists’ union and Boeing led to talking of Washington becoming a right-to-work state. Lawmakers in Missouri echoed that sentiment, with some calling for it to help lure Boeing.
“I don’t think this is about whether Washington is a right-to-work state or not. I think it’s about cultivating a relationship of mutual respect between labor and management, period,” Pike said.
Washington officials are working on the state’s proposal to keep Boeing.
Contact Shelby Sebens at [email protected]
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