An investment template for our legislators
The story on page 38 of today's edition of this newspaper is recommended reading for the Cabinet, members of the Opposition and other legislators.
Basically, it is reporting on the efforts being made by a number of American states to have US aircraft manufacturer Boeing set up, in their jurisdiction, an assembly plant for its new 777X aircraft.
Boeing, we are told, opened the contest after a machinists' union in Washington State rejected the aircraft manufacturer's proposed contract for the 777X because it would have replaced their traditional pension with a defined-contribution savings plan.
Boeing, in response, invited proposals from other states and has received "tremendous response", according to the company's spokesman.
What struck us about the proposals that have so far been reported is the overwhelming bi-partisan support for the incentive packages.
For instance, in Missouri, Governor Jay Nixon convened a special legislative session to approve a US$1.7-billion incentive package that will remain in effect for more than 20 years. The plan, we are told, passed the Senate on Wednesday and was likely to win final approval in the House today.
We have also been informed that the measure would be worth US$150 million annually to Boeing if the firm creates at least 2,000 jobs in Missouri.
Before the machinists' union decision, Washington State is reported to have approved nearly US$9 billion in tax breaks for Boeing to assemble the 777X there.
State officials have been reported as saying that keeping the 777X plant in Washington would result in US$21.3 billion in tax revenue for 15 years, based on a total of approximately 57,000 jobs.
In an obvious effort to keep Boeing, Washington State is offering new incentives over 16 years to include a 40 per cent reduction in business and occupation taxes, US$3.5 billion in tax credits for the development of the aircraft, a US$562 million property tax credit on land and buildings, a US$242 million sales-tax exemption for purchasing computers, and US$8 million allocated in fiscal 2015 to train another 1,000 workers.
Boeing, of course, will select the package that best suits its needs. However, there is no doubt that the successful state will benefit financially from the deal.
Jamaican legislators, we believe, can learn a great deal from this case, as it demonstrates how aggressive and forward-thinking we need to be to attract big investors.
We don't expect that our lawmakers will give the country away to investors. However, Jamaican can only benefit if the incentives are very attractive and make economic sense.
These are not the days of small thinking and parochialism. We either want foreign investment or we don't want it. The curmudgeon among us must not hold sway.