Inslee pushes tax break to win Boeing 777X project

After seeking to expand a Boeing tax exemption, the governor convened a legislative task force out of public view.
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Jay Inslee

After seeking to expand a Boeing tax exemption, the governor convened a legislative task force out of public view.

As Gov. Jay Inslee urged tax breaks for Boeing, a Washington legislative task force on winning future Boeing 777X aircraft work for the state began its work Wednesday in secret.

The task force's first meeting was closed of the public. A Crosscut reporter was escorted out of the meeting in Everett's Comcast Arena while being told by an Inslee administration official that it could be kept closed because a majority of the House or Senate was not present. Washington legislative committee and task force meetings have been routinely open to the public. A climate change task force involving legislators and Inslee also has been meeting in public.

Inslee and several legislators were present in the aerospace task force meeting. The task bipartisan force, which Inslee reportedly picked, has six House members and six Senate members. 

A lawyer in the Washington Attorney General's office who handles open meetings questions was on a plane Wednesday, and could not be reached for comment on the legality of closing the meeting. Many legislative practices are matters of policy rather than law. 

The meeting's agenda included background on the 777X situation plus time to "hear high level recommendations from the Washington Aerospace Partnership’s consultant team who conducted an analysis of Washington’s competitiveness," according to a House Republican Caucus press release that announced the appointments of Reps. Matt Manweller, R-Ellensburg, and Drew MacEwen, R-Union, to the task force.

The Washington Aerospace Partnership is a collaboration of union, Puget Sound cities, economic development organizations and colleges to help develop the state's aerospace industry. Boeing is not listed among the partners on the organization's Web site. A full list of the legislative members was posted late Wednesday by The Herald in Everett, which added that representatives of two unions, the Aerospace Partnership and the Aerospace Futures Alliance of Washington were also invited to take part.

The task force is expected to meet five times before the Dubai Air Show, which is scheduled for Nov. 17 to 20, the Republican press releases said. There is speculation that Boeing might announce whether it will go ahead with its 777X program at the air show. If a green light is announced, observers expect a Boeing decision on Washington's role in the new aircraft production would be announced in the subsequent months.

On Tuesday during the Governor's Aerospace Summit in Everett, Boeing Senior Vice President Pat Shanahan was publicly asked about whether the 777X production would be located in Washington. He stayed silent for a half-minute before giving a noncommittal answer, the Daily Herald of Everett reported.

Inslee spoke to roughly 200 people at the summit Wednesday before going into the closed meeting. Inslee said he would push for extend the same tax breaks that Boeing currently uses for its 787 aircraft manufacturing from the current 2024 expiration date to 2040, which is when 777x production would likely end.

In its last session, the Legislature passed a bill that requires specific job-related goals and expiration dates on new and extended tax exemptions. Companies seeking those tax exemptions must assume their financial information sent to the Washington Department of Revenue will be automatically made public, except when they can convince the department that such disclosure would cause economic harm to a business.

"We understand we're in a competitive environment for this airplane. ... It's tens of thousands of jobs for decades," Inslee said. He said the current 777 programs contribute $20 billion annually to the state economy, out of a yearly $70 billion aerospace contribution to Washington's economy.

Inslee said Boeing has not given his office a list of items that it seeks from the state regarding any new 777X production.

One item is expected to pop up in the legislative session in January. Last session, Boeing sought a study on the numbers and types of fish consumed in Washington, and an accounting of who caught the fish and where. Boeing wanted these studies done prior to the Washington Department of Ecology writing new fish-related industrial discharge regulations for the state's waters.  The House Democrats want the Ecology Department to adopt the new regulations because of concerns about Boeing's discharges affecting the health of fish eaten by local tribes, whose diets are heavy with fish. InvestigateWest reported on Boeing's opposition to the new regulations in March; the company says it is worried that the regulations will require costly changes at its facilities in the state.

The Ecology Department — under the close eye of the Senate Energy & Environment Committee — is studying what numbers to plug into formulas to determine whether industrial pollution will increase the chances of someone developing cancer from eating the fish swimming among the discharges.

"I'm fully committed to work with everyone involved to make this right," Inslee said. Factors on any decisions should include how residents are affected, whether the science is sound, and whether the businesses needing the discharge permits have access to the appropriate technology to fix identified problems, he said.

Boeing this year employs 84,300 people out of 132,500 Washington's aerospace employees, compared to 72,300 out of 115,300 in 2010, according to a Washington Aerospace Partnership report. Approximately 19,800 people work directly on Boeing's current 777 program. Boeing received $120.7 million worth of tax exemptions in 2011, and $177 million in exemptions this year.  Boeing paid $381.3 million in taxes to the state in 2011, and another $476.2 million in 2012, the last year that figure was available.

Inslee said Washington has provided Boeing with $1.4 billion in tax breaks since 2003 and received $3 billion in taxes in return.

For exclusive coverage of the state government, check out Crosscut's Olympia 2013 page.


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About the Authors & Contributors

John Stang

John Stang

John Stang is a freelance writer who often covers state government and the environment. He can be reached on email at and on Twitter at @johnstang_8