The deal will provide $8.7 billion in tax breaks to the company. Greg LeRoy,
executive director of Good Jobs First that tracks such megadeals with states said:
“This is the biggest tax subsidy in U.S. history. Nothing is near this deal: The fact it took place in days is breathtaking. This deal happens in the state that already has the most regressive tax code in the nation.”
State Representative Rep. Reuven Carlyle a Democrat, an architect of the deal, was quite positive on the deal calling it an "an authentic marriage" between Boeing and the state, during a speech in the legislature. It seems more like a support agreement in which Washington taxpayers agree to forgo revenue as a bribe to keep a huge corporation from moving production to a state such as North Carolina with weaker labor laws and no doubt other enticements.
In 2003 Governor Gary Locke
also passed a $3.244 billion dollar deal to ensure that Boeing built the 787 "Dreamliner" at its Everett Washington plant. The new sweetener is designed to entice Boeing to build the new 777X plane in Washington state. However, Boeing wants the Machinist Union (IAM) also to donate to the coffers of Boeing by giving concessions on pension benefits and health benefits.
Although the union negotiated an eight year contract as demanded by the company, the 30,000 members rejected
The International Association of Machinists District 751 announced Wednesday night that the proposal was rejected 67 percent of the votes.
The union members who supported a no vote were protesting Boeing's push to end the present pension plan and also increase health care costs. The no vote won even though workers would have received a $10,000 signing bonus if they had accepted the contract.
Good Jobs First published a study of Megadeals. Some of the results can be found here.
It looked at 240 deals that ranged from $75 million to eleven which were more than a billion. The total amount was $654 billion. Based on the information available Good Jobs First estimates that each job created costs about $465,000 to the taxpayer.
a corporate welfare critic, did point out that if you were going to subsidize a company that
" Boeing is a decent choice. It’s not like we’re giving huge tax favors to, say, Wal-Mart, which then pays its employees so little that some end up on social-welfare programs such as Medicaid.Boeing jobs are pretty good jobs, with a better than average ripple effect out across the economy,”
The vote on the tax breaks passed the Washington State Senate
by a vote of 42 to 2. The House of Representatives passed it by 75 to 11. While the company will no doubt be disappointed by the union rejection of the proposed contract, they may not decide to move production from the state as the costs of doing so might be so high as to offset any benefits of lower costs elsewhere.