WE BOUGHT IT. Now, can we afford it? The biggest public-private partnership in modern state historythe taxpayers' contribution to help Boeing staff, build, operate, and profit from its new 7E7 final-assembly plant in Everettwill cost the public $3.2 billion to save 800 jobs. That's $4 million per worker. The workers will not exactly build planes. They will fit together subassemblies flown in from around the world. But that's close enough to dub Everett as Home of the Dreamliner, and it launched Gov. Gary Locke and Boeing officials into a celebratory state last week. For taxpayers, the fun begins in 2005, when Boeing's $3.2 billion in tax cuts kick in and Washington's business and occupation tax revenue drops $400 million a yearmoney that would have gone into state services.
Billions for Boeing
The states 7E7 bid to Boeing included:
$3.2 billion in tax breaks over 20 years.
$4.2 billion in transportation improvements across the state.
$24 million to establish recruitment, training, and employment programs and a work force center for Boeing and suppliers.
$15.5 million for improvements at the Port of Everett satellite rail-barge facility.
Reforms to the states unemployment insur ance and injured workers compensation systems.
An aerospace manufacturing degree program at state community and technical colleges. (Boeing will consider graduates of this program for work on the 7E7.)
Pledge to provide more tax help and incen tives, as well as assistance on permits and workforce training.
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But Locke won't have to worry about that. He'll be off to that figurehead job at Microsoft or the University of Washington or Boeing?after wiling away a lame year in the Olympia manse. Having rained billions on Boeing, he secretly doled out millions more in the final hours of the aerospace giant's brilliantly conceived beauty contest, feverishly pitting one state's taxpayers against another's to see who could have their wrists cut the deepest without bleeding to death. Lord knows Boeing, with $50 billion in annual revenue, needed the help. And accused milquetoast Locke, desperate not to be known as the wimpy governor who lost Boeing, needed the clips for his scrapbook. He wasn't about to call Boeing's bluff that, without a war chest of perks, it would build the 7E7 someplace other than its ready-and-waiting site in Everett. Instead, Locke just kept bumping the pot in the darkrecently tossing in another $10 million for a new Boeing training center and $14 million more for a Boeing training program. Along with the multi-billion-dollar tax cut Boeing never asked for, creating a savings the company can convert to cover costs such as salaries, Locke obligated the public to effectively hire, train, and pay workers to make a profit for a private corporation. As he said while taking a victory lap last week, "This should be a sign to companies all over the world that we are open for business in a way we have never been before." It appears he has not only adopted Boeing, he's co-opted their ethics policy.
LOCKE, BOEING, and state officials say it's worth every billion if we want to add from 800 up to 1,200 "new" jobs. But the 7E7 hires might simply be "sustained" jobsnew positions filled by current or former employees, and, numerically, offset by other layoffs. For example, more than 800 workers for Boeing Commercial Airplanes were laid off one day in October, 340 more were given 60-day layoff warnings in November, and 165 more got word just last Friday, Dec. 19. There is talk of up to 500 Puget Sound layoffs next month if Boeing's questionable 767 refueling-tanker deal with the Pentagon fails to get approval soon. (That potential $27 billion deal is stalled by yet another review of ethics and possible criminal violations.) By Locke's multiplication, the Boeing 7E7 tax giveaway will save 17,000 jobs that are directly and indirectly dependent on Boeing. By that accounting, howeverif you figure 800 Boeing jobs is effectively 17,000we've already lost 17,000 jobs, as of that 800-person layoff in October. If 600 to 700 Boeing workers are laid off in the next few months, that's a good 10,000 more. Of course, "This has always been about more than just a few thousand jobs," Locke said. "It's about ensuring the future of Boeing commercial airplane production in our state for decades to come." But as 36,500 Boeing job cuts in two years indicate, there's nothing sure about it.
Still, according to Locke, the state can afford these giveaways. In fact, he began sounding darn feisty about it in the wake of his generous Christmas bonus to Boeing. "You will have to go to California or some other state for a story about a budget crisis," he piped to reporters last week. "We don't have one here." Not if you don't count his proposed draining of emergency reserves to pay for a $193 million supplemental budget increase which, if adopted, according to the watchdog Evergreen Freedom Foundation, will nearly double the state deficit to $453 million this bienniumclose to what Boeing will be getting in annual tax breaks. Oh well, in Gary Locke's Olympia, it's the best of times. And for any other businesses or corporations left out of the spending spree, he has opened a new door: If you don't like it, get out of Dodge. Or rather, just threaten towink, wink. Remember, we are open for business in a way we never have been before.