The Washington state Senate gave overwhelming backing to two Boeing Co. bills Saturday morning, including a 42-to-2 vote in favor of favorable tax rates worth $8.7 billion for aerospace firms through 2040. The House approved a training bill and was debating the tax measure in the afternoon.
Only two liberal Democratic senators from the Seattle area – Bob Hasegawa and Adam Kline – voted against the tax measure. Hasegawa questioned the speed of the vote on tax incentives and the lack of proof to show the number jobs that will be created. He also said he fears passage of the tax and workforce training bills sought by Boeing would undercut Senate Majority Coalition interest in passing a transportation package.
Republican Sen. Michael Baumgartner of Spokane later supported both measures but complained of the quick votes that he suggested won't look good to voters back home.
Both measures – Senate Bill 5953, which puts about $10.5 million over the next 18 months into worker training and environmental reviews for permits; and SB 5952, which extends tax rates into 2040 for aerospace – were assured of passage in the House, which had its own versions ready. It appeared Gov. Jay Inslee might sign both bills right away in the afternoon.
In floor speeches, Republicans who control the Senate and many Democrats spoke in favor of the legislation. A vote to suspend rules let lawmakers add their names after-the-fact as co-sponsors of the “historic” legislation, including Republican Sen. Pam Roach of Auburn.
“We calculate this is going to generate over $20 billion (in new tax revenue) over the life of its exemption,” Senate Ways and Means chairman Andy Hill, R-Redmond, said in a floor speech. “That’s a big deal. That’s without raising taxes.’’
Hill said what Inslee and Democrats have been saying for days – the bill ensures 56,000 jobs in the manufacture of Boeing’s new 777X jet and a carbon-fiber jet wing. “This is a generational opportunity. You usually don’t see this body talk about things out to 2040,” Hill said.
“We can’t afford to have the aerospace industry slip out of our fingers,’’ said Sen. Jim Hargrove of Hoquiam, top Democrat on the budget committee.
“This is a great day for our state,” said Senate Majority Leader Rodney Tom, D-Medina, who leads the Republican-dominated coalition that controls the Senate. He said the key word in the 1960s was "plastics" and today it's "composites," and he argued that Boeing's placement of its carbon-fiber jet-wing assembly in the Northwest will have a huge impact for the regional economy.
The Legislature is not the last word on Boeing's decision where to do its work on the wing and 777X jet. It needs the Machinists union to approve an eight-year contract extension on Wednesday that includes major give-backs on pensions that the company believes it needs to remain competitively with global competitor AirBus and whatever other international players step into the ring.
Tom, whose voting record has angered labor groups in the past, gave kudos to the aerospace workforce already here, which may be why Boeing chose to offer the manufacturing jobs to Washington before considering other states.
“I think the tipping point here was the incredible workforce we have here in Washington,’’ Tom said.
But some lawmakers contended the tax rates – about a 40 percent lower business-occupation tax on aerospace than for general business – should be extended to other businesses in the form of a rate cut by 2020. Republican Sen. Janea Holmquist Newbry of Moses Lake offered amendments to achieve that goal, but these were voted down.
"What's good for Goliath should be good for David," Holmquist Newbry said of the Legislature's treatment of Boeing that is more favorable for taxes and permits than for other enterprises.
UPDATE: The House approved its version of the the training bill, HB 2088, on a 77-to-9 vote with 12 members excused. Most voting against the $10.5 million job-training measure were Republicans but two Tacoma Democrats - Rep. Steve Kirby and Rep. David Sawyer voted against it too.