Morning Fizz

Democrats Demand Accountability from Boeing

State Democrats want to close $60 million in corporate tax breaks.

By Josh Feit February 19, 2016

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1. Yesterday, I reported that the Seattle Department of Transportation—which is currently asking city council to approve a $1.4 million check to Pronto—has in fact already cut two checks, totalling $305,000, to the struggling bike share program.

Follow-up: SDOT is making its pitch for the $1.4 million today at 2pm to the council's transportation committee. I don't expect a vote at today's briefing. Just a lot of questions. Here's the council's own report on the Pronto situation.  

I was on KIRO radio this morning talking about the story as well. KIRO tried to turn my story about sloppy city governance into an editorial against bike sharing. Nope. All transportation systems are subsidized. Cars are subsidized. YupYup. And yup.

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2. The state house Democrats introduced a legislative package Thursday to close five tax breaks—including one bill that would penalize Boeing if the local airplane titan didn’t meet the employment goals specified in the controversial $8.7 billion tax break legislators awarded the company in 2013.

The Democrats insist their proposal is not merely political bumper stickering, even though the GOP-controlled senate routinely shoots down Democratic attempts to eliminate corporate tax breaks.

The highest-profile bill of the set would penalize Boeing if it falls below 83,295 employees—which was how many workers Boeing had in Washington in 2013 when the legislature granted the break. Since then, Boeing has lost about 5,000 Puget Sound employees. An earlier version of the bill, sponsored by state representative June Robinson (D-38, Everett), failed to get out of the house finance committee because all the Republicans and one Democrat on the committee voted against it.

Robinson revamped the bill for prime time yesterday. Instead of enforcing a pair of monster-size slashes in the tax break after Boeing’s employment drops by 4,000 and 5,000 workers, the revised bill would trim $2,500 from Boeing’s tax break for every lost job below 83,295. Robinson said the bill has some other changes to make it more palatable to Republicans.

The other targeted tax breaks are an oil refinery tax exemption for recycled fuel (which has been on the Democrats’ list and governor Jay Inslee’s for years); trimming the number of financial institutions eligible for a real estate business-and-occupation tax deduction; repealing an international banking B&O tax break; and repealing a sales tax exemption for buying large corporate airplanes. If all those tax breaks are eliminated, it is estimated that would raise $60 million per budget biennium with the money earmarked for education.

The Democrats' word of choice at Thursday’s press conference was “accountability”—essentially converting the GOP’s 2016 mantra about executive branch agencies into a Democratic weapon against unaccountable corporate favoritism.

“We want to make a statement about what accountability looks like,” state representative Jessyn Farrell (D-46, Seattle) said.

“It’s about holding companies and CEOs accountable for tax exemptions for private corporate jets that shuttle around millionaires, and tax exemptions intended for small banks that now benefit Goldman Sachs and Barclays.” 

State representative Marcus Riccelli (D-3, Spokane) added: “I don’t think the hardworking families in my district want to see millions of dollars handed out to corporations that don’t give us anything back. My accountability to the people of Spokane, tells me, we need to be clear that the tax exemptions we pass [need to] have a direct benefit to Washingtonians. If they don’t, it’s time they go away.”

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