Panel: Are Boeing's tax breaks paying off?

By Jerry Cornfield, 
Everett Herald Writer

A smart group of ordinary folks, entrusted to advise state lawmakers on the merit of tax breaks, has a suggestion regarding the jumbo incentives enjoyed by the Boeing Co. and the rest of the aerospace industry:

Figure out how we’ll know when they stop paying off.

The five-member panel with a mouthful of title — the Citizen’s Commission for Performance Measurement of Tax Preferences —concluded last week that Washington needs a clear means of measuring benefits received from $8.7 billion in tax savings Boeing stands to covet over the next couple of decades.

On a 4-1 vote, the commission recommended that the Legislature “establish specific economic development metrics and reporting mechanisms” for the tax breaks, which are intended to help the aerospace industry grow.

Commissioners didn’t spell out what they thought those “specific metrics” should include, cognizant of the difficulty faced by lawmakers in devising any degree of check on tax breaks.

They are counting on their broadly worded recommendation to spark a conversation in Olympia. The tax breaks are so big that they shouldn’t be given out unless their value can be justified with an objective measuring stick, commissioners said before the vote.

Leaders of two unions wanted the panel to be bolder — to endorse a requirement that Boeing maintain a minimum number of jobs to receive every dollar of tax savings.

Though that didn’t happen, representatives of the Society of Professional Engineering Employees in Aerospace (SPEEA) and the International Association of Machinists and Aerospace Workers(IAM) applauded the commission’s recommendation.

“This is really the first look at the public’s evaluation of the tax preference legislation. As such, we find the commission’s recommendation an encouraging step toward accountability,” SPEEA spokesman Bill Dugovich wrote in an email.

Larry Brown, IAM’s political director, said the citizen panel is “trying to get closer to where we’d like to see the state when they give tax preferences. We appreciate the progress they’re making but there’s more work to be done.”

The extent of that “work” will be the topic next week when union leaders meet with Gov. Jay Inslee.

Union leaders are crafting a bill dubbed the “Aerospace Tax Incentive Accountability Act,” which they hope will link the quantity and wages of jobs in aerospace with tax preferences. They want to make sure firms can’t lay off or move workers — as Boeing has done to thousands of engineers in the past 18 months — without some financial repercussion.

They’ve lined up a few friendlies in the House and Senate, but the governor isn’t rushing to get on board.

The citizen commission’s recommendation could bolster their pitch.

“The intent of the Washington legislation was to grow our state’s aerospace industry,” Dugovich said of the tax breaks. “The commission’s recommendation is appropriate — the Legislature needs to ensure tax breaks build our state’s aerospace industry and it’s done with jobs that adhere to established wage standards.”

Political reporter Jerry Cornfield’s blog, The Petri Dish, is at www.heraldnet.com. Contact him at 360-352-8623; jcornfield@heraldnet.com and on Twitter at @dospueblos.

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