Boeing has received roughly $1 billion in tax incentives and credits from Washington state over the past four years.
Washington is one of 30 states that regularly evaluates corporate tax incentives.
Only a few cities regularly track and assess these business deals to see if the promised results were achieved.
Last year, Massachusetts and Michigan became the latest states -- bringing the total up to 30 -- to require regular assessment of business tax incentives.
Typically, there’s little transparency and accountability after a corporate tax deal is announced. Without a system for reviewing tax incentives, it’s difficult for most states to even say whether the giveaways achieved what they were supposed to. That, in some cases, has led to governments giving away money without getting the job growth that had been promised.
Evaluating incentives can prevent that from happening.
When Maine studied its marquee economic development program in 2017, analysts found a loophole that allowed businesses to receive tax incentives for up to two years merely by promising to create jobs. Even if they didn't create any jobs after that point, the companies wouldn't have to return any of the benefits they already received.
The following year, state lawmakers passed a reform that requires businesses to prove they have created at least one eligible job before they can receive benefits.
When it comes to cities, only New York, Philadelphia and Washington, D.C., have passed legislation to create independent corporate tax evaluation programs, according to Pew.
It can be more difficult for cities to set up these systems, says Goodman. For starters, the office evaluating incentives should operate with a level of independence from elected officials, which can require more legwork for cities. Philadelphia is hiring external contractors to do the job. (D.C. and New York City already had independent fiscal offices in place.) Resources are also an issue. Evaluators often face obstacles like locating and organizing the necessary data.
It’s too soon to tell whether the grounding of the 737 MAX jets will have a ripple effect on the local economy in Washington state, where Boeing is one of the largest employers. The tax incentives will continue, according to an $8.7 billion deal, through 2040. If policymakers want to reevaluate them, they have a lot of the information they would need.
But the discussion in Olympia now, says state Sen. Reuven Carlyle, is primarily about safety -- not jobs or economic concerns.
"As the main production home of Boeing, we take the long view," he says. "There’s a time for politicking and a time for serious policy work, and this is the latter."