MICROSOFT’S announcement that it will build a new $1.1 billion data center in West Des Moines, Iowa — and not in Quincy in Eastern Washington, where it already has one — ought to be a wake-up call for the state Legislature.
When lawmakers return for business in January, they should reauthorize Washington’s server-farm tax break, and pronto.
Microsoft, the leading player in the state’s high-tech biz, senses an attitude problem at the statehouse. A sales-tax exemption for computer and electrical equipment at server farms, due to expire next year, received no action during this year’s Legislature. Some lawmakers are hostile toward extension of a research-and-development tax credit, due to expire in December. The complaint is that tech firms are making plenty of money, and Washington is such an outstanding place to do business that it doesn’t need to give anything away.
Yet, the same principle is at work here as in last year’s decision to grant $8.7 billion in tax breaks to Boeing. Sensible legislators admit they weren’t giving away a dime, because the 777X line wasn’t coming here if the state didn’t deliver what Boeing wanted.
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Some say tech is miffed because it didn’t get the same treatment. This is too simple a view of an industry whose strength lies in the synergy of hundreds of firms and thousands of talented workers.
The key is keeping the business here. No single siting decision is likely to have the impact of a 777X plant, but the Iowa decision ought to send a message. Iowa courted the business, offered breaks, didn’t groan at all. Microsoft’s DeLee Shoemaker warns the state’s attitude toward tech incentives “is making Washington uncompetitive for future siting decisions by Microsoft and other technology-based employers.”
Lawmakers need to take a pragmatic view. In a fluid business like tech, tax breaks are seldom a matter of giving money away — they are the price of attracting the business in the first place.
Editorial board members are editorial page editor Kate Riley, Frank A. Blethen, Ryan Blethen, Sharon Pian Chan, Lance Dickie, Jonathan Martin, Erik Smith, Thanh Tan, William K. Blethen (emeritus) and Robert C. Blethen (emeritus).