Mo. lawmakers pass $1.7B incentive plan for Boeing
Originally published December 6, 2013 at 11:55 a.m., updated December 6, 2013 at 9:39 p.m.
JEFFERSON CITY, Mo. (AP) — Missouri lawmakers gave final approval Friday to a plan offering up to $1.7 billion in incentives over more than two decades if Boeing agrees to assemble a highly sought-after passenger plane in the St. Louis area.
The incentives will be a key part of Missouri’s bid for the Boeing 777X jetliner in a competition featuring more than a dozen states from coast to coast — many of which, like Missouri, already have a sizable Boeing workforce.
The aerospace giant plans to announce a decision by early next year.
“For whatever state is the lucky winner, it will provide thousands of stable, solid, high-paying jobs and will reinvigorate the manufacturing industry,” said Missouri House Speaker Tim Jones, R-Eureka.
The Missouri House voted 127-20 to pass the legislation after a one-week special session called by Gov. Jay Nixon for the sole purpose of crafting a package for Boeing. The Senate passed the bill 23-8 on Wednesday.
Nixon praised the quick bipartisan passage of the legislation and said the incentives will put Missouri “in a very strong position to compete.”
Boeing Co. already makes military aircraft in the St. Louis area and employs about 15,000 people in Missouri.
The proposed incentives would come from an expansion of four existing state programs that base the amount of aid on the number of jobs businesses add.
A gain of 2,000 jobs — an amount associated with the production of the airplane’s wings — could result in an aggregate of $435 million of incentives by 2040. But if Boeing picks Missouri to assemble the full plane, the state could gain about 8,000 jobs, and Boeing could get $1.74 billion of incentives over that same period.
An analysis released by Nixon’s administration predicts Missouri would gain more in tax revenues than it would give away in incentives under any of the job-growth scenarios. That’s partly because the Boeing facility is presumed to result in thousands of additional jobs for construction workers and for other businesses that supply aircraft parts.
Besides the state incentives, Missouri’s offer also includes local aid from St. Louis-area governments, an agreement among community colleges to provide specialized training and a pledge by local construction unions to build the Boeing facility quickly by working around the clock without overtime pay.
Among the others rallying support for the legislation was Rep. Doug Funderburk, R-St. Peters, a longtime electrician for Boeing who asserted the incentives posed no conflict of interest for him because he plans to retire in a few years.
Another Boeing employee, Rep. Clem Smith, D-Velda Village Hills, didn’t vote on the legislation. Smith, a machinist on Boeing’s F-18, said it would have been a conflict of interest, “because this could ultimately benefit my pocketbook.”
Critics of the incentives largely kept quiet Friday. One lawmaker said he was filing a written objection asserting the bill violated the state constitution by directing taxpayer dollars to a private business. Others opposed the measure because it was tailored for a single corporation.
“Just because you’re big, doesn’t mean you should get to pay a lower tax rate than the hard-working small business owner,” said Rep. Stephen Webber, D-Columbia.
Boeing solicited proposals from numerous locations after a machinists’ union in Washington state last month rejected a proposed contract that sought to replace their traditional pension with a defined-contribution savings plan. The company gave states until Tuesday to submit proposals.
The long-range, twin-aisle 777 is Boeing’s second-largest plane and has been a best-seller since its first flight in 1994. The new 777X is expected to carry as many as 400 passengers, about 35 more than the current model, and be more fuel efficient.
Boeing already has commitments from airlines worldwide to buy 259 planes valued at more than $95 billion, though the first planes aren’t expected to be ready for delivery until the end of the decade.
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