Last week Boeing reported that it had skipped out on $305 million in taxes in 2015. Back in 2013, the Legislature enacted a special Boeing exemption from business taxes.
The legislative intent was to keep jobs in Washington. But that was not written into the tax exemption bill. So in spite of, or maybe because of, the tax exemption, Boeing has shed over 10 percent of its workforce since 2012, shifting more than 10,000 jobs out of Washington state.
State Rep. June Robinson, D-Everett, has proposed a solution. She introduced legislation to make this tax exemption dependent on actual jobs. Any loss of jobs since December 2013 would decrease the allowable exemption. So Boeing’s tax exemption would have been cut in half now, because in the past three years, more than 5,000 Boeing jobs have been disappeared. It is a small commonsense step forward. But the Legislature refused to take it up.
Perhaps that is because some legislators believe that the tax incentives have proved justified. One legislative leader stated, “We all feel frustration with short-term layoffs,” he said. But taking a “long view,” landing the 777X and the carbon-fiber industry here “is the future of aviation” and “makes that package worthwhile.”
But these are permanent, not short-term, layoffs with Boeing investing in “centers of excellence” around the world. Was it this $305 million tax avoidance that made Boeing decide to build the 777X here? That $305 million was three-tenths of a percent of Boeing’s revenue in 2015, which exceeded $96.1 billion. Boeing spent $6.8 billion just buying back Boeing shares. The tax exemption amounted to 4 percent of this buyback program, which had nothing to do with positioning Boeing in Washington state.
Boeing’s business decision to place the 777X here was based on the factors of production, mainly that the Puget Sound area is host to the world’s best and most concentrated grouping of mechanical, technical and engineering human capital for aerospace production. In other words, we have the educated, trained and skilled workforce and the state is funding a pipeline of trained workers for future aerospace work. That is what interests Boeing.
If they can position work outside of Washington, they will. They have no commitment to our state. That ended when McDonnell Douglas took over Boeing twenty years ago. No longer was Boeing a northwest company with social commitments and production facilities dedicated to Washington state. Instead, it could be a rogue multinational company, and use Washington’s workers and intellectual capital to seed other production in other states and countries.
You might note that other states are giving Boeing tax exemptions as well. South Carolina, for example, gave Boeing $120 million in 2013 to offset Boeing’s expansion costs there. The South Carolina deal was dependent on the creation of 2,000 jobs. The $305 million Boeing saved in 2015 in our state was part of a $8.7 billion 16-year tax exemption deal. And in contrast to South Carolina, the Washington state deal appears to be dependent on job destruction!
How does this $305 million compared to the cost overruns of the 787? Those overruns amounted to $25 billion, or 84 times Boeing’s 2015 tax break. They were the result of Boeing shifting 787 production to other states and other countries. But the workers and managers in those places couldn’t meet the exact specifications needed to create and fly the 787. So production and repair was shipped back to Washington state, where highly trained and skilled workers put the pieces back together again. What was Boeing’s next move? Accelerate production in South Carolina, having the Puget Sound workforce train the South Carolina workforce to build the 787 correctly, and on time. This means that Boeing will slowly drain jobs out of our state, while also receiving a multi-billion dollar tax break over the next eight years.
Legislative consideration is usually a slow and deliberative process, for good reason. Legislators want to be able to consider all the intended and unintended consequences of their law-making. But the Boeing package was pushed through in a special two-day session, called for just that reason and paid for by the taxpayers of our state. All just to give Boeing a gift. What could that $305 million have paid for? Compensation for 4,000 teachers. Or community college tuition for 80,000 students. But instead it went to bulk up the stock buyback for Boeing shareholders. That is a disservice to the citizens of this state.
Originally published at at the Everett Herald
Marvin Rosete reported on facebook about the King County Democrats’ caucus held at Hazen High School Sunday, May 1:
I am glad Senator Patty Murray left the building safely, until an idiot decided to attempt to bum rush the Senator’s group as she was leaving.
The man in question said he was attacked by Hillary volunteers.
I will say NO.
As one of the people who was in the altercation, I will say that this guy was out of line.
I will say, he was physically blocked by event volunteers as he tried to accost the Senator as she was exiting the building. To us as volunteers, his intentions were unknown as he rushed towards the Senator with no intent of respecting any physical boundaries.
It took myself and two other people to stop the man.
I’m 5’7″ and took minor injury restraining the guy who is close to 6′ and 200+ lbs from chasing down the Senator. The claims himself to be an Army veteran.
I had grab his phone and get it out of his hands to keep from being swatted by it.
If not for the other volunteers pulling the man away, he would’ve gotten to Patty and I would be a pancake on the floor, or worse.
The phone was still recording. And this guy had the nerve to post it.
We now have his name. I hope they find this guy and report him to US Secret Service and Washington State Patrol.
I’m fine with a small scratch and a pulled back muscle.
Thank you to my friend, Caesar Robinson Noel Renggli getting me patched up and making sure I was okay. Thanks to Sharon Mast for getting me the painkiller afterwards.
Although, this person was obviously in Bernie tee-shirt, he is NOT representative of the Bernie Campaign. Just because you have a first amendment right, it doesn’t give you the right to accost a person. For that matter, take a hint. The door is blocked for a reason.
This was a scary day.
It shows that this type of aggressive behavior towards incumbants will only get worse.
Richard Erwin, Chair of the King County Dems said
It was an odd event also because when I barged in behind him to grab him and said “What are you doing?” loudly to distract him, he yelled back “Somebody stole my vote!” Then he decided his phone had been stolen, Marvin gave it back, and the next thing you know, he’s loping away from all of us and out of the opposite end of the gym.
I’m afraid we will have to budget for security next time.
Chad Lupkes (a leader of the Washington State Bernie Sanders supporters) wrote, “I’ve talked to him online in a comment thread. He has apologized. But I will say that I’m very glad I was nowhere near what happened. Because I would not have been as nice as Marvin was”