Union leaders tell legislators that aerospace tax breaks should not be automatically reinstated without strong, specific accountability language to boost aerospace jobs in Washington state
OLYMPIA (Feb. 26, 2020) — Washington state labor leaders testified Tuesday on Boeing-backed legislation to end the state’s aerospace manufacturers’ tax incentive in order to resolve a World Trade Organization dispute and avoid harmful retaliatory trade tariffs. Although they supported Boeing’s effort to end the tax break, labor leaders expressed concerns about a “snapback” provision in HB 2945 that would allow the state, without the Legislature’s authorization, to automatically reinstate the tax preferences if the WTO dispute is resolved and allows the incentives to remain in place.
The union leaders said Boeing’s decisions in recent years to expand manufacturing facilities and create jobs in South Carolina and other countries while reducing its workforce in Washington, despite receiving the extraordinary tax breaks from our state, indicate the need for strong and specific accountability language to any snapback provision for the tax breaks.
“While we still believe in tax incentives to grow and maintain good jobs, we believe the history tells us that the aerospace industry will act in its own self-interest and the state should consider doing the same,” said Larry Brown, President of the Washington State Labor Council, AFL-CIO. “Any future so-called snapback incentives (should be) contingent on retaining, for example, Boeing’s next airplane program.”
Union leaders representing Boeing employees echoed the call for accountability at Tuesday’s hearing on HB 2945 in the House Finance Committee.
“The Legislature should not agree to snapback these tax incentives without knowing the aerospace environment at the time that this could occur,” said Jon Holden, President of the International Association of Machinists (IAM) District 751, which represents more than 33,000 members, the majority of whom are Boeing employees. “What will the 787 production rate be? How will that production rate be split between Washington state and South Carolina? What will the rate of the 777X be? And where will they site their next airplane program? All these are important questions that you don’t have the answers to today.”
Holden said the legislation should have a “commitment to site the next airplane program here in Washington state.”
“We believe that any snapback provision that does not include effective measures to maintain and grow aerospace jobs in Washington state is a continuation of a policy that has failed to provide its intended benefits to our aerospace workforce and our state’s taxpayers,” said Brandon Anderson, Legislative Director of the Society of Professional Engineering Employees in Aerospace (SPEEA) IFPTE 2001, which represents more than 18,000 Boeing engineers and scientists.
He said SPEEA is asking that HB 2945 be amended to include “a strong job-related accountability feature tied to any commitment to reinstate the aerospace tax incentives.”
Here is the full testimony of the three labor leaders from Tuesday:
The Seattle Times reports that House Majority Leader Pat Sullivan (D-Covington), the sponsor of HB 2945 believes the bill doesn’t have enough votes to pass in its current form, as lawmakers consider adding accountability measures to increase support. Ending the tax preference for Boeing and more than 300 other aerospace manufacturers in the state would raise an estimated $363 million in revenue through 2023.
Jerry Cornfield of The (Everett) Herald speculates that negotiations on the bill could push legislators into overtime, past the March 12 scheduled end of the regular legislative session.
SB 6690, the Senate companion bill to HB 2945, will be heard today at 3:30 p.m. in the Senate Ways and Means Committee.