Understanding the importance of tax policy in attracting investment and employment

Although the close margins and short calendar suggest that the 2016 legislative session won’t result in much ground-breaking policy, tax incentives are sure to be discussed. That discussion may begin with an attack.

Yesterday, leaders of the two largest Boeing unions again argued for legislation tying tax incentives to jobs. Here’s their statement.

This has been proposed, evaluated and rejected here before. And the renewed flap misses the point. As Washington Research Council president Lew Moore told KIRO news,  

“The incentive was passed in 2003,” said Moore. “And there were over 30,000 jobs created as a result of that incentive.”

Boeing, he insists, has paid the state back in thousands of jobs and job security.

“The question is ‘are they going to stay here, are they going to have a major investment here,'” said Moore. “That answer is clearly yes.”

Much of the problem comes from the overstatement of the value of the incentives

Not only are the aerospace incentives working as intended, there’s additional evidence of how the state’s data center tax policy is working to boost the Central Washington economy. More on that here. And we like this report on how the incentives are expanding opportunity to communities that may otherwise be left behind (h/t Research Council).

Since computer makers already have Quincy facilities, area leaders see opportunity.

“Someone born 18 years ago in George or Coulee City or Wilson Creek now has the opportunity to do a local internship with some of the largest internet and technology companies in the world,” said Jonathan Smith, executive director of the Grant County Economic Development Council. “Nowhere else in rural America are these kinds of opportunities available.”

It makes sense to assess the value of tax incentives. They’re not all created equal. But the data center and aerospace incentives are working as intended, spurring and retaining investment and economic opportunity.