Boeing: extortion pays, again.........

[Ian Murray <seamus2001@xxxxxxxxx>]

Thursday, June 12, 2003
Boeing gets its way in Olympia
By ANGELA GALLOWAY
SEATTLE POST-INTELLIGENCER CAPITOL CORRESPONDENT

OLYMPIA -- Majority House Democrats acquiesced to business and GOP demands
for sweeping cuts in Washington's unemployment benefits last night, and
the Legislature wrapped up a special Boeing session and finally concluded
work for the year.

Gov. Gary Locke is expected to sign the Senate bill, which will
substantially cut benefits for thousands of seasonal workers, including
some farm and construction laborers. It limits all jobless to 26 weeks of
benefits, rather than the current 30-week cap. And it reduces the state's
maximum benefit amount.

Unemployment insurance reductions, workers compensation and passing a
multibillion-dollar tax break were the substantial measures aimed at
persuading The Boeing Co. to build its next commercial jet here that
dragged lawmakers into a second overtime session early yesterday.

"Today marks a victory for our state," Locke said. "These are tough times;
but this is an opportunity for our state to move forward." But many labor
unions didn't see it that way, including the Washington State Labor
Council and representatives of farm and construction workers.

"This is the day that corporate greed won in Washington state," said Jeff
Johnson of the Washington State Labor Council. "The business community --
along with various Republicans and Democrats, including the governor --
decimated our unemployment insurance system."

Dozens of labor activists picketed the capitol campus this week in protest
of the business-friendly proposals. But the package did divide the labor
community somewhat: Aerospace unions supported the reforms.

Boeing plans to decide later this year where to assemble the upcoming line
of the commercial airliner, the 7E7. Washington is competing with other
states for that work -- and many say the company's future in this state
rides on winning that work. Washington officials must submit a bid for the
plant next week.

To sweeten it, lawmakers this week approved $3.2 billion in tax breaks
Locke sought for Boeing and its contractors if the aerospace giant builds
the new jets in Washington. And lawmakers approved relatively modest
reductions in the state's workers compensation system.

Boeing officials have claimed they spend $20 million a year on the
unemployment insurance system subsidizing seasonal industries -- which
often hit a cap on their tax burdens. Locke has said the change is
projected to save Boeing between $5 million and $7 million a year.

Chuck Cadena, a Boeing spokesman, declined to discuss whether the measures
would help Washington's chances of landing the 7E7 project. However, he
said, "we appreciate the continued focus and effort by the governor and
the Legislature to address the competitiveness of the state."

The unemployment insurance change, which will affect hundreds of thousands
of out-of-work Washingtonians, proved a sticking point.

Politicians wanted to offer the company tax relief to help Washington's
chances of landing the 7E7 project. Many businesses have long sought
changes to the state's unemployment system -- considered among the
nation's most generous and costly to employers.

"This bill will improve Washington's business climate, and it will help in
our effort to land Boeing's 7E7 project," Sen. Jim Honeyford, R-Sunnyside,
said in a written statement. "Without this bill, we have no chance at all
to get the 7E7. This at least keeps us in the game."

But House Democrats felt the Senate unemployment plan unfairly targeted
poor and minority workers. They had offered a counterproposal for
across-the-board benefit cuts in the unemployment program.

"We felt that amendment made this a more balanced approach," Majority
Leader Lynn Kessler, D-Hoquiam, told her House colleagues. "We felt that
it was fairer to our workers."

But Locke, Boeing and other business interests, and majority Senate
Republicans insisted on the plan, which was negotiated among a range of
businesses. The House gave in and approved the upper chamber's version
last evening 57-33.

The Senate version saved businesses, including Boeing, about $167 million
a year, $37 million more than the House plan.The multibillion-dollar tax
break for Boeing is, by some measures, the largest ever given to one
company, said state tax officials.

In 1995, lawmakers approved a sales tax break for manufacturers who buy
machinery and equipment, which is worth more overall. But that break is
open to all Washington manufacturers, from Boeing to tiny machinery shops.

The 7E7 package proposed by Locke is dedicated to aerospace companies. The
phased-in breaks are worth about $400 million over the next six years and
an estimated $3.2 billion over 20 years.

The changes to the state's injured workers compensation system include a
limit on hearing loss claims. Boeing, with noisy factories, stands to be a
major beneficiary.

.Businesses said the Senate unemployment plan better addresses systemic
inequities, because the current system forces some industries to subsidize
those most likely to lay off workers.

The measure passed yesterday changes how the state calculates benefit
amounts for seasonal workers. Currently, the amount is based on the
average of what workers earn in the most lucrative two quarters of the
previous year. Under the measure, starting in 2005, those payments would
instead be based on an annual average. Beginning in 2009, the workers
would only qualify during designated seasons.

House Democrats and non-aerospace unions say those changes unfairly target
poor, rural, minority and women workers, such as those who labor in
agriculture, construction and fishing.

And Johnson, of the labor council, said the new formula would hurt
thousands who qualify as seasonal workers because of their part-time
schedules -- from grocery checkers to community college professors.

The reforms also limit benefits to workers who quit voluntarily but still
qualify for unemployment benefits. Current law allows some workers to
qualify if they have "good cause," such as workers forced to relocate with
a transferred spouse or forced out of their jobs by poor working
conditions. The reforms limit those exceptions.

Also, the package cuts the maximum weekly benefit from 70 percent of the
state's average weekly wage to 63 percent.

Under the new system, benefits to many laborers who earn very little or
nothing in off-seasons -- such as farm and construction workers -- will
likely drop dramatically.

The plan also reduces the maximum length of benefits from 30 to 26 weeks,
once the state's unemployment rolls drop to 6.8 percent. It limits maximum
weekly benefits to $496.

Also yesterday, a package of education bills that included allowing
independent, publicly funded charter schools and millions for local school
districts died in the Legislature.

Locke said he regretted that, but commended lawmakers for other
accomplishments since the first legislative session that convened in
January.

For example, the Legislature approved a $4.2 billion transportation
improvement package and filled a $2.7 billion operating budget shortfall
without raising general taxes.

They reformed water laws and passed a measure aimed at helping the elderly
and disabled afford health care.