Lawmakers listened to different plans for reforming the state's unemployment tax and benefit system on Wednesday, but a vast gulf still separates the business and labor approaches to fixing one of Boeing's top complaints about doing business in Washington.
Time is running out. The Legislature's 30-day special session ends Tuesday. The state's pitch for Boeing to choose Washington as the assembly site of its new 7E7 jet is due June 20.
In Thurston County, there are about 290 people who commute to Boeing plants. That's down from about 384 at its peak.
Washington has one of the most generous unemployment benefits systems in the country, offering a maximum of $496 a week for 30 weeks. (The average unemployed Washington worker gets $323 a week for 19 weeks.)
Businesses pay a tax, based on how many people they have recently laid off, to support unemployment benefits. Because of the tax system's structure, some businesses, including Boeing, pay more than their workers use in benefits and other businesses pay less than their fair share. Since the current system started in 1984, Boeing officials say the company has overpaid by more than $268 million.
"How much longer can the Boeing Co. afford to build the products in this state that we have since 1917?" Boeing lobbyist Al Ralston asked lawmakers on Wednesday. "This will be an issue" as states compete for the 7E7 location, Ralston said.
Ralston said Boeing endorses the business groups' proposal, which would cut employer costs by limiting eligibility, potentially making more than 40,000 seasonal workers ineligible for unemployment benefits. The business proposal -- also endorsed by the Association of Washington Business, the National Federation of Independent Business and the Building Industry of Washington -- would create a whole new tax schedule for businesses to address the equity and overpayment issue that bugs Boeing.
The Washington State Labor Council, the local arm of the AFL-CIO, submitted a proposal that makes more modest changes and works within the current tax structure. It would limit benefits to 26 weeks instead of 30, but would not restrict eligibility.
The Machinists' union, which stands to benefit or lose tremendously depending on whether Boeing builds the 7E7 here, doesn't totally like either proposal.
"We believe the business proposal has gone too far, but we also believe the labor proposal does not go far enough," said Machinist lobbyist Linda Lanham. She said the labor proposal needs to do more to address tax equity for employers, and the business proposal is too drastic about cutting seasonal workers off unemployment.
The seasonal workers provision in the business proposal has probably drawn the most ire. Workers would have to earn annually at least twice what they make in their best quarter to qualify for unemployment benefits. That means someone who earns $6,000 in the summer would have to make at least another $6,000 over the rest of the year to qualify for benefits.
Business group leaders say the change is needed to ensure that people don't just work one season and rely on the state dole the rest of the year.
"Unemployment benefits were never intended to help workers who work only a quarter of the year," said Association of Washington Business lobbyist Clif Finch. "They were never intended as a welfare system."
But others warned that the double-earnings provision may unfairly burden farm workers, who work like mad during the harvest season to provide for their families the rest of the year, and might not qualify for benefits under the business proposal.
Labor leaders also expressed doubts over the business community's proposal for a brand-new tax structure.
"Makes us nervous," said Jeff Johnson, lobbyist for the Washington State Labor Council, who called it a "radical new tax structure."
Business and labor have been negotiating for about a month now, but negotiations slowed in recent days as their differences became more intractable. Pressure on the Legislature to pass an unemployment reform bill is high; no politician wants to be the one who dropped the Boeing ball. But without agreement between business and at least most of labor, it will be hard to get a bill through both the Republican-led Senate and the majority-Democrat House.
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