Morning Fizz: David vs. Goliath
Caffeinated News & Gossip featuring Boeing comparisons, tax breaks, big oil, and R&D.
"I'm hoping this bill can become one vehicle in which we can help all the Davids of Washington since we've already gone to bat for the Goliath."
Q: Which state rep said this at yesterday's house finance committee hearing, comparing his proposed tax policy to help "the small guy" to the recent $8.9 billion Boeing giveaway. And from which party?
A: Rep. Matt Manweller, a Republican from Central Washington.
Everyone expected the GOP to use last November's Boeing vote as a trump card to push Democrats to slash state workers' pensions (and they are doing so), but yesterday, Rep. Manweller (R-13, Ellensburg), a constitutional law and political science prof at Central Washington University, a former producer and host of "A Christian Viewpoint" on Yakima Christian Broadcasting, and an occasional writer for the conservative Washington Times, used the Boeing tax breaks to argue: "If we can help the big guys, will we help the small guys?"
In one of the most fascinating discussions you're likely to see all session, Republican Rep. Manweller used the Boeing breaks as a foil to demand economic equity for rural counties that are still hurting from the Great Recession.
In one of the most fascinating discussions you're likely to see all session, Manweller, pitching his bill to give tax breaks to manufacturers in high-unemployment, rural counties, faced off with state Rep. Reuven Carlyle's (D-36, Queen Anne) powerful finance committee, using the Boeing breaks as a foil to demand economic equity for counties that are still hurting from the Great Recession. The tax breaks would go to rural counties at 20 percent above the state's unemployment rate or to economic zones with 51 percent of families at 80 percent of the the county's median income and with an average unemployment rate at 120 percent above the county average.
Manweller's bleeding-heart plea not only included Occupy-style juxtapositions against the state's Boeing policy—"every dollar for Boeing would be a half a penny" for companies investing in distressed rural districts; the estimated $50 million investment would be .0055 percent "of what we did for Boeing"—but he got into the kind of intangible and emotional "Do-the-right-thing" arguments that traditional liberals pull out when arguing to fund certain social programs, arguing that young residents in rural communities face an existential dilemma: either leave the commuity to reach their professional dreams of becoming an engineer or a chemist ... or to stay, take over their family farm.
Manweller, who voted for the Boeing tax breaks, said his bill, which has 10 cosponsors, all Republicans, would help diversify the economies of rural communities and allow people to live and work their in professional jobs rather than fleeing.
In another reversal, it was the Democrats who questioned Manweller with cold-hearted questions. Finance committee member Rep. Steve Tharinger (D-24, Clallam and Jefferson Counties) turned the Boeing analogy back on Manweller, asking the Ellensberg rep if he could guarantee the same 4-to-1 return on the investment. Manweller said he could not.
A Republican on the committee, Rep. J.T. Wilcox (R-2, Yelm) also questioned Manweller's Boeing comparison, noting that Boeing was actually threatening to leave Everett and wanted to know if any companies were threatening to leave rural communities.
Manweller, acknowledging that he didn't know of any, said his bill represented the flip side of the same coin: Sometimes you have to play offense to attract jobs rather than defense to save them.
"We hope the legislature will step forward for everybody," Manweller concluded.
The tax break will cost the state $20 million in the 2015-17 biennium.
2. Speaking of tax breaks, a crew of Democrats have signed on to Rep. Carlyle's bill, introduced yesterday, to end a roughly $50 million tax break for oil companies; Carlyle introduced the bill last year too as part of the Democrats' failed effort to close $500 million in tax breaks to help fund K-12 education.
At that time, the oil exemption was only worth $40.8 million, which shows you how fast oil company profits have grown in one year.
The tax exemption was originally intended—when it was established in the late 1940s— to encourage wood products companies to upcycle their own waste to power their own facilities with wood byproducts (known as "hog fuel"). But oil companies, in a loose interpretation—take advantage of the exemption when they power their own oil production process. Seriously? That's like giving soda companies a break for providing free sodas to its workers at lunch.
That's like giving soda companies a break for providing free sodas to its workers at lunch.
It is the environmental community's top priority bill and Carlyle is earmarking the money for education.
3. And in still more tax break news: A batch of house Democrats and Republicans are presenting a bill today to extend a B&O tax break on research and development costs for tech companies.
In another Boeing comparison, a tech industry white paper boasts that the break will provide $169 billion "in fiscal benefits to the state in the next 26 years ... compared to $21.3 billion projected to be generated by the most recent incentives to attract Boeing's 777-X program." They also note that companies participating in the breaks, 600 a year saving $434.2 million, have an annual employment growth rate of 2.9 percent.
However, a Joint Legislative Audit Review Committee (JLARC) report on the bill in 2012 found that the break only created 454 jobs between 2004 and 2009 for a net cost to the state of about $25,000 per job.
4. And finally: Be sure to check out the three posts we frantically put up after 5 pm yesterday, including a C is for Crank on Jezebel that also got crossposted on national feminist website Shakesville (go Erica); a report on WSDOT's testimony in front of the state senate transportation committee where WSDOT's tunnel project manager Todd Trepanier, sounding like he was prepping for a deposition, squarely blamed Seattle Transit Partners for the boring machine debacle; and an Afternoon Jolt on K-12 education funding.