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Dear Friends and Neighbors,
Last week when Gov. Inslee abruptly called the third special session of the year, it caught most lawmakers off guard, including me and Sen. Ann Rivers. We had a town hall meeting scheduled for Saturday in Camas, which we had to cancel. The special session finished late Saturday afternoon after lawmakers approved two bills to help Boeing stay in our state – including a nearly $9 billion tax break for the aerospace industry. As reported by the Seattle P-I, it is the biggest state subsidy in U.S. history. As I will explain below, I did not support the entire package.
TOWN HALL MEETING RESCHEDULED
We really feel it is important to hear from the constituents we represent, so that is why Sen. Rivers and I have re-scheduled our town hall meeting:
Saturday, Nov. 23
1 p.m. – 3:30 p.m.
Camas Public Library
625 N.E. 4th Avenue
Please mark your calendars and join us!
BOEING/AEROSPACE INCENTIVE LEGISLATION UNDERSCORES WASHINGTON'S DIFFICULT BUSINESS CLIMATE
This latest special session was the 63rd Legislature's FOURTH session in 2013. It began Thursday and lasted three days. The governor announced last Tuesday that he was calling the Legislature back to pass legislation that would ensure manufacturing work of the Boeing's 777X is completed in Washington state. He wanted the Legislature to act prior to a vote scheduled tonight by the rank and file of the International Association of Machinists and Aerospace Workers. The Machinists are deciding whether or not to ratify a new contract with The Boeing Company. (I spoke more about this in my previous e-newsletter.)
As I returned home to the 18th District following passage of two Boeing incentive bills, I realized this latest session shed light to how difficult it can be to do business in our state. As other states roll out the welcome mats and recruit our employers, we are in “crisis mode.” We need to ask ourselves: How did our state get in this situation in the first place?
I believe it is a result of many years of direct government assaults on business. There are too many rules and regulations, and a cumbersome, expensive environmental review process.
Saturday on the House floor, I commented that in today's regulatory climate, I doubted Bill Boeing would be able to start his aerospace business here today. (Click here to listen to my floor speech) I don't begrudge Boeing for trying to negotiate their best deal possible or the Machinists for trying to negotiate its best contract possible. This is capitalism. Boeing competes in a global marketplace. I am reminded of this every time my significant other, Neil Cahoon, goes to work. He flies to Seattle and heads to the Delta Airlines Flight Office. After flight planning and a walk around the aircraft, he enters the cockpit of an Airbus 330 and then flies the aircraft to Asian or European destinations. Delta has made the decision that for some routes, an airplane built in France works best. This is the global competition facing Boeing today.
WE MUST HELP ALL WASHINGTON BUSINESSES THRIVE, NOT JUST ONE INDUSTRY
The tax incentives passed by the Legislature will help our aerospace industry. That's a good thing. But it would be a shame if we were to send the message to other job creators that we'll pay attention only if you can afford a team of lobbyists.
The end of this special session must be the beginning of a broader discussion on how we can help all employers through lower taxes and regulatory reform. This isn't just about Boeing – it's also about the advanced manufacturing and production sectors of our economy. We need to find ways to help all sectors of our economy.
After hearing calls by the governor and his party earlier this year during the budget debates to “close tax loopholes” and “repeal tax incentives,” I am pleased he and Democrats may finally understand the importance of tax incentives to help job growth. This legislative action will return billions of dollars in revenue to the state in economic activity via direct and multiplier effects. I hope the enthusiasm the governor and his party showed for the Boeing incentives will not end here, but extend to other important sectors of our economy – big and small. We need to send the right message to all employers and not hold the threat of tax increases over their heads.
TRANSPARENCY IN GOVERNMENT REQUIRES A REASONED AND DELIBERATE APPROACH
As I noted in a press release early last week, I was very concerned that a special session called in such a quick manner would deny citizens the ability to read, digest and provide input on proposed legislation. In fact, until Friday, most lawmakers had not seen or read the legislation they would be voting on a short 24 hours later.
Our citizen Legislature should be inclusive and deliberative. The public deserves more time to understand and weigh in on proposed legislation. This special session lacked transparency. Our legislative process should be inclusive to the people is serves, not exclusive. And it should be deliberative, not rushed.
HOW I VOTED AND WHY
I have never been so conflicted on pieces of legislation as I was with Senate Bill 5952 and House Bill 2088.
I voted “yes” on Senate Bill 5952, which extended a business and occupation (B&O) tax incentive for the aerospace industry from the current 2024 to the year 2040 to entice Boeing to construct its new 777X jet and carbon fiber wings in Washington. I'm not in favor of the B&O tax because it taxes businesses on gross receipts rather than profits. A company could lose money and still be required to pay B&O taxes. It is my hope we can eliminate the B&O tax for all major business sectors in Washington, not just the aerospace industry. Like other legislators, I support our current jobs and I want to attract more jobs to our state. This ideal compelled me to vote “yes.”
I voted “no” on House Bill 2088 because I am not convinced it is the government's duty to use taxpayer dollars to pay for workforce development for a multi-national, multi-billion dollar industry. This bill appropriates $8 million from the state's General Fund to community and technical colleges specific to aerospace, $500,000 to develop a fabrication composite wing training program at Paine Field, and $2 million to make grants to local governments to help pay environmental permitting costs related to construction of Boeing's new 777X facility. I would rather see the Legislature reduce environmental permitting costs than throw money at a problem. The bill did not address the root of the problem to fix our state's onerous environmental review and permitting process. The measure will also spend $5 million to complete construction of the Renton Aerospace Training Center and $1.5 million for modifications and specialized training equipment at the Aerospace Training and Research Center at Paine Field.
One of my colleagues made a great point on the House floor. He said, “If lower taxes and less regulation is good for one business in Washington, it should be good for all businesses in Washington state.” Let's make this the beginning – not the end – of the conversation on how we can make our state's business climate better. That's the conversation I have been having with my Business Kitchen Cabinet. (See the story in The Columbian. | Read The Columbian editorial about my proposals.)
Let's use the Boeing and aerospace tax incentives as a springboard to extend the same considerations to other employers across the state. As another lawmaker noted, “If we can save Goliath, we can save David too!”
I welcome your comments.
"Protecting life, liberty and the pursuit of happiness!"
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