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Originally published November 19, 2011 at 9:00 PM | Page modified November 20, 2011 at 11:38 AM

Danny Westneat

A tax break that actually paid off

Despite a 2003 tax break given to Boeing after moved its headquarters to Chicago and jobs to South Carolina, Boeing's job growth is saving us right now.

Seattle Times staff columnist

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Few things are as unpopular right now as government doing special favors for the already special.

But also at this moment, the largest sweetheart deal ever done around here is looking like it may have been a bargain.

Last week Boeing announced its biggest plane order ever. A few days later it trumped that with an even bigger order. The orders, for 777s and 737s, come on the heels of the company finally getting its act together to deliver the 787 Dreamliner, for which is has a backlog of 800-plus orders.

After so much trouble for so long, Boeing is absolutely on fire right now. And it shows around here. We're suddenly like the old Jet City company town again.

In the past six months, the economy in this state has produced a paltry 11,500 jobs. Boeing alone hired 5,700 in that time — and is adding more at a clip of 800 to 1,000 per month.

Boeing is responsible for nearly a quarter of the job gains in this state during the past year.

Then there was the news last week that Boeing is opening a Seattle office on the top floors of the old Washington Mutual headquarters. So our legacy company has come home, at least in part. Remember when the headline was "Boeing, Boeing, gone?"

I bring all this up because it's good news and we need some. But also because buried in Gov. Chris Gregoire's plan last week to persuade Boeing to build its next generation 737-MAX plane here was an item that got no notice.

"Gregoire will ask the Legislature to extend an existing aerospace tax incentive for preproduction expenses from 2024 to 2034," her news release said. "The incentive was first enacted Dec. 1, 2003."

Remember 2003? Boeing had jilted us for Chicago. In a panic, state leaders lined up to "smooch the shiny backside of Boeing's corporate fuselage," as this newspaper called it.

The result was a $3 billion, 20-year deal — what some called a bribe — that remains the largest package of tax breaks in state history. It was such an obvious gift to one company that some questioned whether it was constitutional.

"If they'd wanted us to bulldoze Mount Rainier so their planes would take off easier, we'd have done it," one rueful lawmaker said at the time.

But is there any doubt today that that deal, as hard as it was to take, was worth it?

Gregoire's proposal to extend part of it got nary a squawk. Maybe that's because since 2003, Boeing's in-state work force has grown by 30,000. These are jobs with average wages of $90,000. In the next few years it's projected to go up another 10,000 — this after it was assumed by many Boeing was out of here.

Our Boeing smooch can't take credit for all that. The tax breaks are linked directly to a few thousand jobs in Everett. Then there was how Boeing chose to kiss us back — by gallivanting off with South Carolina.

That insult aside, Boeing's growth is saving us right now. Would we have had a shot at that, or at being the company's job center for the coming decades, if we had been principled and aloof back in 2003?

None of this means sweetheart deals like this aren't problematic. They tilt the system for the powerful. Many are unnecessary. But they also sometimes work.

Last week also brought a reminder of the time we said no to a special favor — in fact became one of the few places ever to stand up to the shakedown that is pro sports. Last week pro basketball collapsed — went into "nuclear winter," they said.

No city is more relieved right now than Seattle.

Can you imagine how duped we'd be feeling if we'd said "yes" to building a $500 million taxpayer-financed basketball arena back in 2008? One that reserved all the risk for us, and all the profits for the NBA team?

Our public palace would be done now. Only there'd be nobody to play in it, nor jobs at it, because of the league's broken business model.

Kissing Boeing's fuselage while spurning the Sonics were two of the toughest calls of the past decade. You don't hear this often, but both times we got it right.

Danny Westneat's column appears Wednesday and Sunday. Reach him at 206-464-2086 or dwestneat@seattletimes.com.

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