Looking Beyond the Ribbon-Cutting: New Honeywell HQ Comes at Steep Cost to Taxpayers

Jon WhitenThis morning Gov. Christie helped cut the ribbon on Honeywell’s new headquarters in Morris Plains – a building that all taxpayers in New Jersey are helping to pay for, and for little reason.

Honeywell received a $40 million state tax subsidy in 2013 after it threatened to leave New Jersey for Pennsylvania’s Lehigh Valley. The corporation argued that it’d jump ship and take 1,061 jobs with it if New Jersey didn’t pony up a tax break, and state officials were eager to do as they were asked. As a result, Honeywell purchased a new location about 5 miles up the road from its old headquarters.

It’s not as if Honeywell needed the tax break. From 2008 to 2012, the company reported $7.1 billion in profits, and paid an effective state tax rate (in all 50 states) of just 1.4 percent – far less than the 50-state average of 6.25 percent and much lower than New Jersey’s 9 percent rate. And Honeywell doesn’t just avoid state taxes; it has $15 billion parked in 5 foreign tax haven subsidiaries, according to the national research group Citizens for Tax Justice.

New Jersey needs to get out of the business of doling out tens of millions of dollars for highly profitable corporations to shift jobs around the state, and it needs to stop rewarding corporations that game the tax system elsewhere with additional benefits here. These subsidy deals may make for great photo-ops for politicians, but they spell real trouble for New Jersey’s economy and the overwhelming majority of its taxpayers.