Work on new airplane would create 800-1,200 jobs in Washington State

Gov. Gary Locke is reviewing possible tax incentive proposals to entice The Boeing Co. to build its new 7E7 jet in Washington state, the governor’s office announced Friday.

Associated Press The Spokesman Review

Locke briefed legislative leaders Thursday night on cutting the three major business taxes — business-and-occupation, property and sales taxes, Fred Kiga, his chief of staff, told The Seattle Times.

On Friday Locke released a statement that seemed to back away from The Times’ report, with his spokespeople saying that "no decisions have been made" on an incentive package.

Boeing would only receive the tax breaks if the company selects Washington as the site for building the proposed 7E7, a mid-sized, fuel-efficient jet.

Communities from around the country are preparing bids for Boeing to review as the Chicago-based aerospace manufacturer considers where to build the new jet. Boeing estimates the 7E7 program would employ 800 to 1,200 employees in production and support.

The deadline for communities to submit their proposals to Boeing’s consultant, McCallum Sweeney, is June 20.

Locke is still weighing how deeply the state needs to cut taxes for Boeing, Kiga told The Times.

"I don’t think we’re trying to be the low-cost state, but we need to be pretty close," he said.

But House Minority Leader Cathy McMorris, R-Colville, told The Times that in the briefing, Locke warned, "We’d gulp."

Boeing has long complained that Washington state, where it builds all but one of its commercial jets, is a less competitive place to do business than other states. Boeing has particularly criticized the unemployment and workers compensation taxes that it pays. Legislators have been trying to hammer out revisions to both those issues.

The tax breaks, if approved, would not affect the budget for the next two years.

http://www.spokesmanreview.com/news-story.asp?date=060703&ID=s1363375&cat=section.business