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It’s brutal when states battle for business | WALLY'S WORLD
As many of you know, The Boeing Company was founded shortly after the turn of the 20th century by William Boeing in a single, wood-framed building, which is preserved today as part of the Museum of Flight. During the following 100 years, the incredibly innovative and revolutionary business expanded by leaps and bounds until it became one of the largest, most successful and profitable international corporations on the Wall Street board and a prominent member of the Dow Jones Average. (Praise be to your parents and grandparents if they bought a sizeable chunk of Boeing stock when it first appeared on the Exchange.) Through the years, though it opened a few relatively small operations in other cities, the company’s major production lines, developmental work and executive suites remained in Seattle. Boeing and Seattle were simply synonymous.
But, alas, that’s changed in the 21st century. In 2001, Boeing’s corporate headquarters pulled up its roots and went to Chicago. King County residents and our state government were quite surprised and shaken by this sudden, rather unexpected move. The company president complained that the local infrastructure – our highways and shipping lanes – were two crowded and congested, but mostly he bemoaned the high state and local taxes and real estate prices. Then, a few years later, corporate execs decided to build a whole new production line in South Carolina, much to Seattle’s chagrin. As best it could, our state offered various incentives to construct the new operation here, but to no avail. The subsidies and exemptions Carolina offered were just too great; that is, far beyond anything our state could afford.
There’s nothing new about such business practices. According to a report in the New York Times, each year American corporations are nailing states and local governments for at least $80 billion in cash grants, free land, free buildings, income tax credits and property tax abatements.
And what do the companies provide in return? They promise the city or state that they’ll move their operations and all the jobs it provides onto the new site or promise they won’t leave a facility that’s already there. In short, corporations play one state or town against another, getting the best subsidy they can find. General Motors has received nearly $2 billion in local incentives during the past five years. Twitter recently won $22 million in tax exemptions to stay in San Francisco. Every year for the last several years, Texas has been handing out at least $19 billion in incentive programs and such “gifts” have been quite effective in bringing jobs to that state.
Boeing execs have explained that they built a production line in South Carolina because the economy of that state was in dire straits, while the Seattle area was relatively wealthy. Well, one has to admire such compassionate and benevolent motives, but somehow I suspect the more important reasons for the move stemmed from the fact that South Caroline gave Boeing several acres of land, billions in property tax exemptions, has among the lowest wages in the nation, has a nonunion, “right-to-work” labor force, has fewer safety regulations and has friendly, anti-tax politicians.
Economically speaking, that’s what our state is up against. It’s a ruthless, cut-throat world out there.