In an effort to keep Boeing 777X assembly work in Washington, Gov. Jay Inslee proposed last week to extend to 2040 the tax breaks that expire after 2024. This is a good opening move.
Gov. Inslee would attach two important conditions. One is that final assembly of the new 777X remains in Washington. The other is that work on the wing would not be farmed out, which it was on the 787, but be done here. That keeps the engineering expertise here.
“We needed to demonstrate our seriousness before Chicago started making decisions,” said David Schumacher, director of the state’s Office of Financial Management — he may be presumed to know something about decisions at Boeing’s headquarters. For two years he was Boeing’s Northwest director of government affairs.
During the past 10 years, Boeing and its suppliers have enjoyed $1 billion in state tax breaks and $400 million in subsidized worker training. It is a policy that works.
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Boeing and its suppliers are not just any industry. They are an irreplaceable industry that brings in money from around the globe. They use it to employ 130,000 people here — jobs that can move.
Movement doesn’t happen all at once, but it can happen in billion-dollar increments, as Boeing showed with its investment in South Carolina. And there is only so much the Evergreen State can do about it.
Washington shows no inclination to adopt South Carolina’s right-to-work laws. What then? Long-run success will take more than tax breaks. Our state has to do better on education, from preschool through graduate school. It has to do better on keeping traffic flowing on public roads. It has to adopt water-quality standards that improve the environment and are economically possible to meet. It has to finish the halfway reform of workers’ compensation.
None of these is an aerospace agenda as such. They are a business agenda.
Do all these things and Boeing may still put its 777X investment in South Carolina. But each commitment that makes Washington better for business improves the state’s long-term future. Each demonstrates seriousness about remaining a high-innovation, high-wage state.