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Legislature OK’s key elements of Boeing’s 777X incentive package

OLYMPIA — The Legislature this past Saturday overwhelmingly approved key elements of Gov. Jay Inslee’s proposed package to help secure an unprecedented commitment from the Boeing Company to assemble its new 777X jetliner - and the plane’s carbon fiber wing - in Washington state.

“This is a great day for everyone in Washington,” Inslee said. “Winning the 777X will secure tens of thousands of jobs and yield huge economic benefits for generations to come. And it will bolster our state’s legacy as the aerospace capital of the world.”

Inslee, who called lawmakers back to Olympia for a special session last Thursday, praised them for working quickly and in a broad bipartisan fashion to approve key measures that will help ensure Boeing will build its new 777X jetliners here in Washington.

The measures approved by the state legislators include extending all commercial airplane tax incentives until 2040, and expands the current sales and use tax exemption on construction of buildings to manufacture “super-efficient airplanes,” which includes all commercial airplanes and suppliers of wings and fuselages.

The hastily approved legislation also expands the state’s investment in education and workforce development to boost enrollment in aerospace fields at community and technical colleges, trains workers for manufacturing of composite wings and funds the completion of the Central Sound Aerospace Training Facility in Renton.

The approved measures, too, streamline permitting actions that will speed up development and expansion of facilities at large manufacturing sites around the state.

“Our legislature stepped up in a big way today to secure our state’s economic future,” Inslee said this past Saturday. “We should all be thankful for that.”

Inslee notes that the bill approved by lawmakers includes a provision that says Boeing will lose its preferential B&O tax rate for the 777X if any of that work is moved out of state.

The governor had also asked lawmakers to approve funding for transportation projects he is pushing, and although they declined to do so while in the three-day special session, Inslee said he is encouraged by progress on a comprehensive transportation investment package and urged lawmakers to move quickly to reach a final agreement. He said lawmakers could consider the package later this month.

“Let’s get this done for all Washingtonians,” Inslee said.

Senate Majority Leader Rodney Tom and Senate Republican Leader Mark Schoesler said Saturday’s legislative action is all about securing the future of aerospace in Washington, and creating the jobs and skilled labor force necessary for the state to be competitive and economically successful for generations to come.

“It’s the equivalent of winning the lottery,” said Tom, (D-Bellevue). “Winning the Boeing 777X deal and composite-wing manufacturing, which this legislation makes more likely, is a huge win for our state.

“Once this package is signed into law and the machinists union ratifies the contract, an estimated 38,000 machinists in Washington will receive a 10,000-dollar bonus come December 12. That’s a 380 million-dollar stimulus for our state, paid for by the private sector - not your state or federal government. And that is just the beginning of the potential value of this project,” Tom said.

Schoesler noted that encouraging job creation in aerospace will be good for families across the state.

The two Senate leaders pointed out that the opportunities provided by a growing aerospace industry will have long-term benefits for the state.

Tom and Schoesler also addressed the possibility of approving Inslee’s package of transportation projects - beyond those funded in the budget lawmakers passed last April.

“Clearly, the aerospace industry would like to see an additional state investment in infrastructure - roads and transit - and it’s not alone,” said Tom. “But all sides recognize that addressing our transportation needs is a complex process, and it’s more important to get it done right than to just get it done right now.”

Both leaders said majority-coalition members will continue to work on building a transportation package capable of receiving broad support from legislators and the public. Schoesler expressed optimism regarding the progress on transportation.

After approving this past Saturday the two tax-preference bills designed to bolster the state’s aerospace industry, Sen. Jim Honeyford of Sunnyside said he’s looking forward to continuing the trend of growing the state’s business community by offering tax incentives.

“The governor called us into a special session in order to pass two bills to keep Boeing in Washington, in exchange for retaining up to 56,000 jobs and creating tens of thousands of new jobs across the state,” said Honeyford, who represents the state’s 15th Legislative District.

“That’s not an opportunity that we can just sit on, but I’m concerned about the appearance of the state playing favorites. Now that it’s been widely accepted that certain tax incentives can grow businesses in Washington and in turn provide jobs, I’m going to pursue expanding that policy to other areas beyond aerospace, such as agriculture and small businesses, and I already have a commitment from Boeing that it will help us work to expand these policies,” said Honeyford.

“Regardless of the haste with which Governor Inslee brought us all back to Olympia, the bottom line is that these bills send a clear message to what is arguably our state’s largest, most highly-coveted private employer: we want it to stay in business here in Washington and keep its workforce here as well,” Honeyford continued.

“I can’t think of another opportunity like this since I started in public service more than 30 years ago.”

Honeyford noted that Yakima County has four aerospace businesses with combined employee payroll of over $24 million annually. Between the four establishments, 409 people are employed and 32 additional businesses are subcontracted, he said.

Inslee was scheduled to appear at the Museum of Flight in Seattle earlier today (Monday) to sign the aerospace legislation passed by lawmakers this past weekend. He was to be joined by U.S. Sen. Patty Murray, officials from the International Association of Machinists, the Boeing Company and other invited guests.

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