Following the presentation of the Business Case for Consolidating Line 2 in Everett by the governor to Boeing, a few Republicans, a business association and a few others focused on the fact that Washington isn’t offering new incentives. We discussed why in this posting. The critics of the report also noted that Boeing continues to complain that Washington’s unemployment insurance rates are too high, and a Boeing spokesman also referred to this view when commenting on the report.
South Carolina’s UI rates are lower, these people said. Well, maybe this is why. This four minute news report points out–as did Washington’s study–that SC has a $2 billion hole in its unemployment insurance fund for which taxes are going to have to be raised. SC also has an unemployment rate of more than 11%. If critics are going to talk about Washington’s unemployment tax rate and compare it SC’s, they need to talk about the whole picture. Washington’s UI rate has come down 42% in recent years and the UI fund is solvent. SC’s UI fund is insolvent and it’s going to have to raise these rates to make it solvent. This is the whole story.
Washington’s governor noted that our Legislature is not in session and that Boeing told her the issue over where to put Line 2 is not about tax rates or concessions, it’s about production stability and labor strikes. When the Legislature reconvenes in January, the “business climate” issues will likely be back on the table. In the meantime, locating Line 2 is between Boeing management and union leadership. No amount of political grandstanding will change this fact.