Boeing recently declared itself a free agent and asked states to submit a list of financial inducements they will offer the aircraft maker. In return, Boeing offers to locate its new 777X airliner assembly plant, as well as the 8,500 jobs that come with it, in the state with the most generous package.
Among Boeing’s demands, according to confidential documents leaked to the press:
• “Site at no cost, or very low cost, to project.”
• “Facilities at no cost, or significantly reduced cost.”
• “Infrastructure improvements provided by the location.”
• Public subsidies for “procuring equipment/tooling” and in “recruiting, evaluating and training” employees
• “Entire applicable tax structure including corporate income tax, franchise tax, property tax, sales/use tax, business license/gross receipts tax and excise taxes to be significantly reduced.”
In other words, hard-pressed taxpayers are being asked to provide a free site, build a free factory, finance all infrastructure for the plant, train workers for the plant, buy equipment for the plant and pretty much surrender all tax revenue that the plant might generate. This, to benefit a company that projects a profit of $6.7 billion in 2013 and whose stock price has soared 77 percent in the past year.
Welcome to “free-market” capitalism, 2013.
Bids had to be submitted to Boeing by close of business Tuesday, and Georgia is among the states that rushed to meet the deadline. In fact, Gov. Nathan Deal told the AJC last week that “we are are very encouraged” by the process.
Unfortunately, we don’t know what Georgia’s proposal contains. Like the Braves’ deal with Cobb County and the controversial, secret conversion of a Paulding County airport to serve commercial flights, such deals are done behind closed doors in Georgia. Even though public officials may be pledging significant amounts of taxpayer-provided benefits, the public typically can’t see the details of the offer until it has already been accepted and it’s all but too late to change it.
And while Boeing probably won’t get all that it is asking, it will get a lot of it, and if not from Georgia, from somebody. To get an idea of the scale involved, state and local officials in Missouri have already pledged an incentive tax package worth almost $3.5 billion, plus other inducements such as a free site, etc. In Washington, where much of Boeing is currently located, state officials had already approved a record $8.7 billion in incentives to keep the jobs, but even that may not be enough. The company had also demanded significant concessions from the local machinists’ union, including an end to its longstanding pension plan and pay hikes of 1 percent a year every other year.
Given the company’s profitability, the fact that Boeing’s CEO will keep his own pension of at least $265,000 a month, and that executive compensation at Boeing soared by 54 percent last year, union members didn’t think that was quite fair.
It’s worth noting that many of the states groveling for Boeing’s business — North Carolina, South Carolina, Georgia, Utah, Alabama, Missouri, Texas, Pennsylvania, Kansas, Wisconsin — are led by Republicans who otherwise champion a hardy version of free-market conservatism and who condemn what they call the “welfare state” and the taxpayer subsidies that support it. For example, every state listed above has blocked expansion of Medicaid for its lower-income citizens through Obamacare, in most cases arguing that state taxpayers simply can’t afford it.
In Georgia’s case, the decision means that up to 600,000 of its citizens will lose their chance at having health insurance, most of it financed by the federal government. Overall, it will cost the state $40 billion in federal funds over the next decade as well as some 70,000 new jobs, according to a study by a health-economics expert at Georgia State University. A similar story can be told about every state on the list.
Because as you know, taxpayers subsidizing health care for their people is socialism, while taxpayers subsidizing shareholders of a $100-billion out-of-state corporation is just bidness.
Read more here: http://www.charlotteobserver.com/2013/12/05/4522166/states-grovel-before-boeing-in.html#.UqHDUmRgY8k#storylink=cpySomeone will overpay. They always do.
