Washington Business Fall 2019 | Washington Business | Page 17

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Aerospace Tax Incentives Work for Washington, AWB Tells Citizen Committee
Tax incentives for Washington’s aerospace industry are
working to create more companies and more jobs, AWB told
a citizen oversight commission in September.
The commission examined whether aerospace tax
incentives created by the Legislature in 2003 and extended
in 2013 are accomplishing their goals.
AWB’s Clay Hill said the Legislature’s stated policy
objective has been achieved – that the incentives “maintain
and grow Washington’s aerospace industry workforce.”
Aerospace employment is 38% higher in Washington, and
there are many more companies in the industry compared to
2003, Hill told the Citizens Commission for the Performance
Measurement of Tax Preferences.
“When performance is properly measured, the facts are
unmistakably clear,” Hill said.
Hill urged the citizen commission not to endorse the Joint
Legislative Audit Review Committee’s recommendation that
the Legislature change the performance metric in the 2003
tax package.
Also testifying was Rosemary Brester, CEO of Hobart
Machined Products. She and her husband have manufactured
parts for every Boeing airplane since the 707 at their small
business. As a part of Washington’s rich and growing
aerospace ecosystem, their company brings in 15-year-old
interns who later go to work at high-paying jobs throughout
the state.
Bill McSherry, vice president for government operations
for Boeing Commercial Airplanes, testified that in 2018, the
average wage of a Boeing employee was more than $124,000,
nearly double the average wage of a typical Washington
worker. Boeing employs nearly 70,000 people in Washington.
“The incentives make Washington more competitive. The
incentives have encouraged the continued presence of the
industry in the state, and in fact have encouraged considerable
aerospace industry growth,” McSherry said.
In 2003, 197 companies used the aerospace tax incentive.
In 2018, that number had more than tripled to 663 companies
using the incentives.
“We disagree with JLARC’s conclusion that it is unclear
whether the incentives help maintain and grow the state’s
aerospace workforce,” McSherry said. “As a direct result of the
extension of the tax incentive in 2013, and the contract with our
manufacturing union the IAM, Boeing invested over $1 billion
in Everett to construct the 777X composite wing center. Today
as that program gets closer to flight tests, we are manufacturing
every 777X wing, every 777X fuselage, and every 777X airplane
here in the state of Washington. The incentives were a deciding
factor in siting the 777X in the state.”
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