The Boeing Company reports investing more than $13 billion in Washington in 2015.
The bulk of Boeing’s investment is composed of billions of dollars of expenditures for payroll, supplier purchases and capital investments in Washington. It also includes hundreds of millions of dollars Boeing spent in Washington for taxes, as well as more than $40 million in community contributions and more than $30 million towards employee continuing education tuition that includes four-year and masters’ degrees.
These numbers illustrate the direct correlation between the aerospace tax incentives and the amount of money that Boeing pumps into Washington’s economy.
The announcement came ahead of a report on tax incentives to be filed with the state revenue department Monday. According to the company’s press release,
Boeing reported $305 million in savings in 2015 via the Washington aerospace tax incentives.
“This is a good news story,” said Bill McSherry, vice president, Government Relations and Global Corporate Citizenship, Boeing Commercial Airplanes. “The more Boeing invests in Washington, the higher the stated value of the incentives.”
McSherry points out the the billions of dollars invested resulted in significant tax revenue flows to state and local governments. The company also reports that 470 Washington companies use the aerospace incentives. (Stories in the Seattle Times and Associated Press.)
The value of the incentive package adopted by the Legislature in 2013 has been the subject of some confusion. The Washington Research Council published “About that mythical $8.7 billion tax break” in 2014. The WRC concluded,
All told, the 2003 and 2013 tax incentive packages leveled the playing field, making Washington more competitive with other states…
…in the push to quantify the impact of the legislation, a price tag of $8.7 billion was affixed to the package. Because the estimate projects the value of the incentives for 26 years, it is not directly comparable to any other similar legislation. More importantly, the tax policies adopted in 2003 were essential to securing the Boeing 787 here. Not subsidies, these tax adjustments offset extraordinarily high taxes on commercial airplane manufacturing, enabling Washington to prevail in the intense interstate —and international—competition for industries that can transform regional economies.
The WRC was clearly correct: It’s simply impossible to project the value of the incentives 26 years into the future.
What is also correct — and decidedly more relevant — is that the investments made by business in this state, including Boeing, provide good jobs for state residents, support education and other essential public services, and help make Washington a state of opportunity and shared prosperity.
We’d say that’s a very good return on a sensible tax policy.