Washington state lawmakers pass tax breaks, aiming to win Boeing work

Washington state lawmakers pass tax breaks, aiming to win Boeing work

OLYMPIA, Washington - The Washington state legislature on Saturday passed a measure to extend nearly US$9 billion in tax breaks for Boeing through 2040 in an embattled effort to entice the company to locate production of its newest jet, the 777X, in the Seattle area.

Lawmakers acknowledged, however, that their efforts would likely be undermined if the airplane maker's key machinists union votes down a proposed labour contract due to go before the membership on Wednesday.

A contract locking in Boeing's labour costs, along with the tax incentives, is key to state officials' plan to keep the 777X production local. Boeing has said that barring a "yes" vote on the contract, it would be looking at other potential locations.

Industry experts say Washington faces competition from states including South Carolina, where Boeing assembles some of its 787 Dreamliners, as well as Texas and Utah.

Japan, whose heavy industry builds wings for the Dreamliner, is seen as a contender to build the wings for the 777X, the longest wings designed for a Boeing jetliner.

The tax measure passed the Washington state Senate by a vote of 42-2 on Saturday.

The $9 billion measure would extend aerospace tax breaks set to expire in 2024 through 2040 and enact incentives for building airplane factories on the condition that Boeing site its 777X wing fabrication and final assembly in Washington state.

"Our vote isn't near as important as theirs," Democratic state Senator Brian Hatfield of Raymond, Washington, said of the union vote.

"It's a big deal," he added. "It is your job and your family and your pension, but it also has lots to do with the future of the state."

Hours after the Senate action, the state House passed the measure by a vote of 75-11.

Lawmakers also passed a measure on Saturday to streamline permitting for the airplane maker and to commit more state funds to aerospace worker training programs.

After passing the measures, lawmakers adjourned the three-day special session called by Governor Jay Inslee, a Democrat.

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