Aerospace companies that save millions of dollars through tax breaks — or billions in the case of the Boeing Co. — could face new rules if they want to keep them.
A group of House Democrats are pushing to set a minimum wage of more than $20 an hour for veteran employees of those firms and to shrink the tax break for the Boeing Co. if the firm cuts its job force too much.
As Cornfield reports, more is in the works.
A second bill, which could become public this week, will target Boeing. As drawn up, the company would have its tax break reduced if it trims its workforce in the state by a certain number of jobs. Rep. June Robinson, D-Everett, is expected to be the prime sponsor.
Read the whole story, it’s good reporting. Here’s how HB 1786 would change the rules.
Each September, the companies would report the annual earnings of each employee who has been with the firm for three or more consecutive years. As written, the bill covers all jobs including assemblers and engineers, executives and janitors.
Under the bill, each of those employees must be paid at least the state median wage for a one-earner family as reported in the American Community Survey by the U.S. Census Bureau. That wage is currently $52,384 a year.
This mandate is phased in over three years. Starting in 2016, workers must be paid at least 80 percent of this year’s median wage or $41,900, which works out to $20 an hour for a full-time worker. Workers must make 90 percent of the median in 2017 and 100 percent by the start of 2018.
If one employee does not earn the standard in any year, the company loses its entire tax break, according to the bill. A firm can get it back the following year if it complies.
We noted earlier today the importance of manufacturing to our state. A Washington Research Council report last year put the Boeing incentive package in context, dubbing it a mythical $8.7 billion tax break.
Cornfield’s story closes with the Everett mayor asking the right question.
Everett Mayor Ray Stephanson said he couldn’t comment on the specifics of either bill yet, because he has not seen them. If lawmakers impose new conditions on receipt of the tax breaks, it could quiet the interest of any firms eyeing a move to the city or state, he said.
“I think the risk is this: What kind of message does it send to other companies that you’re recruiting to your state?” he said.
The question answers itself, but as KPLU reports, The Boeing Company provides a clear answer.
“The 2013 incentives require Boeing to build the 777X exclusively in the state — an unprecedented safeguard for taxpayers,” the company said in the statement. “Changing the legislation undermines the confidence of all businesses that the state will honor its commitments.”