Perspective: Reasons why I opposed Boeing subsidy

Legislative haste makes taxpayer waste. On Dec. 6, the Missouri Legislature authorized Gov. Nixon to offer more than $2.4 billion in subsidies to entice Boeing to move operations for its new 777X airliner to St. Louis.

From announcement to final vote, this enormous package was conceived, packaged, marketed, and sold in just seven days. Gov. Nixon did not release his financial projections on the measure until the eve of legislative debate, denying legislators sufficient time to analyze the fiscal details of his proposal. The speed was and is still alarming — and included a technical hiccup at the end. Huge decisions with taxpayer dollars shouldn’t be made on such short notice.

I voted no because the actual cost of the package is a bad deal for Missouri taxpayers. Gov. Nixon proposes spending too much over too many years to expect a positive return on the investment. As a result, the bill will make it more difficult to enact broad-based tax relief to benefit the small business owners, entrepreneurs, and working families who drive economic growth in our state.

Why It’s a Bad Deal for Taxpayers

Gov. Nixon has claimed and the press has reported that the Boeing package is for $1.7 billion and is “paid for” because it only comes out of new payroll taxes collected for jobs created at Boeing.

The devil, however, is always in the details. Gov. Nixon’s financial projections hide $707 million in additional benefits that the legislation quietly authorizes, leading to a true grand total potential subsidy package of $2.4 billion for Boeing, which is far more than the anticipated payroll taxes for new Boeing employees. In addition, despite Gov. Nixon’s claims that the subsidies are “paid for,” the subsidies authorized are, in fact, nearly four times higher than the expected state income taxes to be collected from new Boeing employees.

In total, Boeing could receive more than $21,000 in subsidies for every new employee. (At that price, they might as well be state employees.) The tax gap between Gov. Nixon’s proposed subsidies and income taxes collected from new Boeing employees is nearly $16,000 per employee. Thus, the only way this subsidy package makes sense for Missouri taxpayers is if enough non-Boeing jobs are created to close this gap — and a sober analysis shows this is unlikely. F

or taxpayer to “break even” on a $2.4 billion subsidy package, more than 30,000 non-Boeing jobs would have to be created and kept in the next 15 years as a result of the subsidies. If Gov. Nixon manages to keep the package at $1.7 billion, there’s at least a fighting chance of success — but it’s still unlikely. (I’ve posted a detailed analysis of Nixon’s proposal and the non-Boeing jobs that would have to be created here at

I appreciate the perspective of those who voted for this proposal. Growing our economy is important and we need to be aggressive in courting new jobs. In the long-run, I hope my analysis and natural Show-Me State skepticism is proven wrong. But I can’t vote yes on the hope that my analysis will be proven wrong someday in the distant future — even if it’s the popular thing to do at the moment. Since I wouldn’t put my own money in an investment that showed very little chance of a positive return, I won’t vote to put your tax money into such a plan either.

An Opportunity Lost

Instead of picking winners and losers, I believe the best way to grow our economy is to cut taxes for everyone — just as I voted to do in the last legislative session. Broad-based tax relief would help every Missourian. The more deals we cut like this one with Boeing, the further away we get from serious tax reform. It’s time for Missouri government to change its economic development model. Rather than a top-down focus aimed at companies like Boeing, we should aim to grow our economy from the ground up with lower taxes for everyone.

State Rep. Jay Barnes, R-Jefferson City, represents the 60th District, which includes Jefferson City.


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