In 2003, Boeing used the threat of outsourcing jobs to blackmail our legislature into giving them billions in tax breaks. The legislature caved on June 11, 2003 by passing House Bill 2294. The Boeing tax break was achieved by passing House Bill 1449 that same week which gutted hundreds of millions of dollars from our public schools in order to give Boeing hundreds of millions of dollars in additional tax breaks. As a direct result of these massive tax give aways, our public schools are now among the lowest funded and most over crowded schools in America.
Those tax breaks were supposedly to “save jobs.” But Boeing still outsourced thousands of the jobs anyway later that same year. So we lost the money and the jobs. A Boeing Lobbyist called it turning our State legislature into a “Cash Cow.” Boeing union workers have referred to it as the “Disappearing Boeing Airplane” because outsourcing of high paying jobs has been going on for many years. Many legislators privately refer to it as Corporate Welfare. In reality, it is nothing more than blackmail.
On June 18, 2003, the Seattle Times published an article called “Gov. Locke signs
Boeing tax breaks worth $3 billion” It described the tax break as including a 40% cut in Boeing’s Business and Occupation tax from 0.5% to 0.3%. But it also noted that all of Boeing’s property taxes on the new facility will be set off against the amount of the B & O tax Boeing pays - making Boeing’s effective B & O tax rate ZERO. The State has reported that the entire tax break (which includes many other components is worth $3.2 billion over 20 years. This comes to $160 million per year.
In 2008, the Washington State Department of Revenue issued a tax exemption report indicating just the B & O tax exemption is worth $104 million per year:
Democracy for Sale
Boeing goes to extraordinary lengths to pay off State and federal politicians in order to maximize its corporate tax breaks. The Center for Responsive Politics lists Boeing as number 11 in its list of the 20 biggest financial donors in American politics in 2010. Boeing spends about $18 million lobbying politicians and providing them with campaign contributions every year. Nearly all of this money went to incumbents in both political parties – recognizing and re-enforcing the principal that incumbents win re-election over 90% of the time. The amount of money Boeing has been spending on lobbying has also increased dramatically in the past 10 years doubling from about $8 billion to $18 billion per year.
Boeing is also a major contributor to Washington State Incumbents
According to the Washington State Public Disclosure Commission, Boeing also spent another $350,000 in 2010 bribing incumbents in the Washington State legislature. Among its many legislative recipients were 24 Repubilicans (including 5th LD Glenn Anderson) and 10 Conservative Democrats including 45th LD State Rep Larry Springer. Boeing also donated to non-incumbents in 2010: Andy Hill (R-45) Kevin Hastings (R-45). In addition, Boeing donated up to $10,000 each to the House and Senate and State Republican and Democratic Committees – all of which are used to re-elect incumbents. Boeing also donated $75,000 to defeat Initiative 1098 (High Earners Income Tax) and $100,000 to the Initiative to Privatize Workers Comp. SOURCE: http://www.pdc.wa.gov
Our State’s Taxpayers Paid for Boeing’s South Caroline Plant
In 2009, Boeing paid over one billion dollars to buy an airplane production plant in South Carolina. Boeing will need to invest another billion dollars to upgrade this plant so it can be used to build “787” airplanes. This means thousands of high paying airplane construction jobs may be lost from our State and outsourced to South Carolina. But the real question is: where did Boeing got the $2 billion dollars it is using to move jobs away from our State? The answer is from $3 billion in tax breaks granted to Boeing by our State legislature. So not only has the Boeing tax break cost the jobs of thousands of teachers, it will also lead to the loss of thousands of manufacturing jobs.
Boeing executives have the nerve to complain about how poor the education and transportation systems are in our State. They demand better “accountability” on how public dollars are spent. I agree. We should demand better accountability on how the $3 billion we give to Boeing is spent. For starters, we should demand that the money only be spent keeping jobs in our State… not moving them out! It is time for corporate accountability. Instead of closing schools and cutting teachers, it is time to start closing tax loopholes and cutting tax breaks for millionaires.
We can no longer afford to fund our schools and pay these enormous corporate give-aways. We are sacrificing the future of our children just to keep corporate blackmailers happy. As a consequence of hundreds of millions in tax breaks to Boeing and other wealthy multinational corporations, our State is now facing a record $5 to $8 billion budget shortfall. For more information on the financial crisis facing our State, visit our website: realwashingtonstatebudget.info.
David Spring is the Director of the Fair School Funding Coalition, a non-profit research and educational organization dedicated to restoring school funding in Washington State to the national average. Their webpage is fairschoolfundingcoalition.org. You can reach David at: