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Boeing gets its way in Olympia By
ANGELA GALLOWAY 6/12/03 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. "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. |