More Than $1B In Tax Breaks For Boeing? Inslee Says It's Worth It

Oct 2, 2013

Governor Jay Inslee said on Wednesday that he will propose to extend tax breaks to Boeing -- so long as the aerospace giant agrees to build the 777X in Washington.

Inslee said the incentives offered to the company would normally end in 2024. But if Boeing agrees to the deal, Washington would extend them until 2040.

The governor said that the industry has saved $1.4 billion so far through tax incentives, and that Boeing's presence in Washington has brought in $3 billion to state coffers. 

At an aerospace conference in Everett on Wednesday, Inslee also suggested that Boeing help with an issue Boeing fears could cost millions: Environmental rules that could impose heavy costs on the company for polluting water in the region.  

Inslee told reporters he’s confident a standard could be set so fish will be safe to eat at a cost acceptable to Boeing. "We want to have good health and a growing economy, and I’m fully convinced we can do both," Inslee said.

Washington is trying to give Boeing a reason to keep its production of 777 in the state after the company moves to the successor, the more fuel-efficient 777X. Boeing’s launch of the plane is expected in November, and an announcement of where the airplane will be built is expected to follow.

The 777 is a popular wide-body, long-range jet. In Washington state, 20,000 Boeing employees work on it. That’s a quarter of the Boeing workforce in the state.  Washington derives $130 million in revenue from this production line alone.

But Boeing has other options, including manufacturing the plane in South Carolina. Boeing opened a second production line for the 787 there and is acquiring land that would allow it to expand. South Carolina and other states that compete with Boeing had representatives at the conference describing their state's tax-incentive packages.

South Carolina allows workers to choose whether they will become a member of their workplace's union. Boeing has signaled in the past that it wants a hedge against work disruptions from strikes. 

Staying Competitive

Sen. Doug Ericksen, D-Bellingham, told The Record on Thursday that tax breaks alone won’t keep large private industry in Washington state.

“It has to be a comprehensive package that we’re looking at that will deal with the issues that are important to overall competitiveness – not only with South Carolina but competing with foreign countries,” Ericksen said.