Keeping the Promise—the Long-Term Tax Incentive Policy Is Working for Washington

In 2003, state legislators and Governor Gary Locke enacted an economic incentive package to help the aerospace sector of Washington’s high-tech economy. The policy goal was to encourage The Boeing Company and hundreds of smaller companies and contractors to continue doing business in Washington state, rather than re-locating business activity to other states or to other countries.

The purpose of a policy of long-term tax incentives is to build on this historic base of technical knowledge and the billions of dollars in private investment Washington-based aerospace companies have made over the decades.

The policy initiative made sense in light of growing globalization and the rapid development of the internet and other technologies. As leaders in other U.S. regions have learned, public officials can no longer assume that traditional industries that developed in their states will always be located in the geographic areas where they began.

The tax-incentive policy was viewed as a success, with the result that final assembly work for the Boeing 787 program is based in Washington. In 2013, recently-elected Governor Jay Inslee signed legislation to extend the program to fiscal 2040. Under the renewed policy Boeing’s production of the 777X airplane and its advance carbon fiber wing technology will be based in Washington state. As a system of economic incentives the policy worked, and continues to meet its goals today.

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