Opening the books on Boeing’s taxes & investment in Washington
Does a tax break work? Does it provide a compelling return on investment for taxpayers? The public now has a new level of visibility to decide for themselves. In my view, today we are able to learn first hand with hard data that the deal Washington taxpayers struck with The Boeing Company is, in fact, a win-win.
One of the driving passions of my work in the Legislature has been the powerful idea that the public has a right to know the value of a tax preference for companies, organizations and industries so they can more effectively and objectively determine the return on investment themselves. The legislation I crafted as chair of the House Finance Committee has transformed the accountability, transparency and analysis of tax preferences and in many cases opened the books for the public. Following the legislation’s passage, the public activism for open data and transparency by the Seattle Times played a key role as well in pushing and prodding for comprehensive disclosure.
As an architect of the Boeing tax and investment package, I’m proud of the fact that today Boeing proactively met the spirit of the law as well as the letter and opened the books of their tax preferences. They did so in a comprehensive, responsible fashion that provides broad context to allow the public to measure the effectiveness of the tax preferences granted by the Legislature in both 2003 and 2013.
Boeing received in 2015 tax preferences valued at $305 million. That number–previously hidden from public view– should be analyzed in the context of the overall $13 billion investment in our state including wages, supplier payments, capital investments, state and local taxes paid, community giving, tuition waivers for employees and more.
Washington is the global center of innovation in the aerospace sector. In 2003 we represented about 32% of Boeing global workforce. Today, we represent about 49% of their global workforce at more than 79,000 employees. While that is down slightly from 2013, it is up dramatically since 2003 as we continue to grow as the anchor of Boeing’s workforce.
I worked hard with our team strongly behind accountability to negotiate solid accountability provisions in the Boeing package. We proposed formal job requirements, levels, clawback provisions, inclusion of engineers in the package and much more. We did pass key provisions to secure the future of carbon fiber in our state and those elements will help our state for generations. Many of the other accountability provisions did not survive the final cut, and I regret the Legislature’s failure in that area. I hope the company and machinists and engineers and others can continue to build bridges to protect the jobs of tomorrow. Yet, I stand by the overall package as a compelling return on investment for the taxpayer of Washington as we march into the 21st Century of aerospace with the 777x and carbon fiber as the material of tomorrow.
I learned and grew a great deal during the Boeing tax negotiations. The special session was personally difficult and politically fraught, and yet we found a pathway forward. The idea that we can come into special session and pass a major tax package without more due diligence, process and transparency itself remains frustrating. It was a flawed process that did not serve the public as well as a longer, more thoughtful effort could have. But in the end, our state moves forward, learns and adapts to the economy of tomorrow.
In my view, we are a great state in part because of the enormous economic powerhouse of our aerospace sector. Today’s public data is just more hard, objective evidence that respects the intelligence of the public and allows them to judge for themselves.
Your partner in service,