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Originally published November 12, 2013 at 9:13 PM | Page modified November 13, 2013 at 8:08 AM

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Tax breaks for Boeing: We’re No. 1

The tax breaks the Legislature just passed for Boeing are apparently the largest state-tax subsidy deal for a private company in American history.


Seattle Times staff columnist

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Here’s a factoid that’s been floating around, but of course was not to be heard last weekend amid the din of politicians a-swooning, en masse, over Boeing.

The $8.7 billion over 16 years for Boeing that the state Legislature passed lickety-split, and the governor signed Monday, is the largest state-tax subsidy granted to a private company in American history.

The next largest corporate favor ever doled out was in 2007, when New York granted $5.6 billion over a 30-year-period for an Alcoa aluminum plant. The third-biggest subsidy deal? That was us again, when we gave Boeing $3.2 billion in tax breaks back in 2003.

“You were already one of the national leaders in corporate-subsidy deals. Now you are head and shoulders above everybody else. It’s not even close,” says Greg LeRoy, of a Washington, D.C.-based policy group called Good Jobs First that tracks tax-break deals to companies.

So shout it: We’re No. 1!

At corporate welfare.

LeRoy, who was in Seattle to speak at Town Hall on Monday, has tracked the 240 largest such corporate subsidy “megadeals,” going back to the 1980s. In only 12 deals has a state or local government given more than $1 billion in breaks to spur the building of a plant or to keep a company from leaving town. Our favorite Chicago-based company and the pols in Olympia now are the stars in two of the top three.

I am on record as concluding that the last time we “kissed Boeing’s fuselage,” in 2003, it did turn out OK for us. Boeing obnoxiously built a line in South Carolina, setting up this latest shakedown. But Boeing’s Puget Sound hiring boom of recent years helped carry Seattle through the recession.

Would those jobs have been here anyway? Some, but not all. It’s admittedly not possible to know whether we needed to grant Boeing such a lavish sweetheart deal to keep them here. But my bias is that I grew up in the Midwest, so I’ve seen firsthand the padlocked factories and dead downtowns that spurned industry can leave behind.

Even LeRoy, a corporate-welfare critic, agreed that if you subsidize any company, Boeing is a decent choice. It’s not like we’re giving huge tax favors to, say, Wal-Mart, which then pays its employees so little that some end up on social-welfare programs such as Medicaid.

“Boeing jobs are pretty good jobs, with a better than average ripple effect out across the economy,” he said.

But still, now what? If you’re, say, Microsoft or Amazon, and you saw what Boeing just scored, wouldn’t you maybe start fretting that your own tax loopholes seem a tad shallow? How will this pattern — of corporations threatening jobs to wrest greater favors out of the public treasury — ever end?

It matters, because here’s another tidbit I noticed when looking at the state’s fiscal note on Boeing’s big bonanza weekend. The state of Washington is on track now to subsidize Boeing, supposedly a private corporation, more than it subsidizes the University of Washington, supposedly our flagship public seat of learning.

It’s true. Right now the UW gets $250 million a year in taxpayer dollars from the state (down from more than $400 million a few years ago.) In that three-day legislative party last weekend, Boeing was just forgiven more than $500 million per year in taxes over the span of 16 years to come (some other aerospace companies benefit, too, but it’s mostly Boeing.)

I know, Boeing won’t be worth a thing to us if they pack up all their jobs and move. But as LeRoy notes: “When companies play states against each other like this, they can extract enormous public goods. There is a cost to that. At some point there’s going to have to be some pushback on this practice. By someone. Somewhere.”

Here? Doubt it. We are, after all, No. 1. Nobody does it better.

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



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About Danny Westneat

Danny Westneat takes an opinionated look at the Puget Sound region's news, people and politics. Send tips or comments to dwestneat@seattletimes.com. His column runs Wednesday and Sunday.
dwestneat@seattletimes.com | 206-464-2086

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