HONEYWELL FTZ IMPACTS FINAL 060617.PDF

ECONOMIC AND REVENUE IMPACTS
FOR HONEYWELL SITES IN FTZ 75
JUNE 2017
PREPARED BY:
APPLIED ECONOMICS
11209 N. TATUM BLVD, SUITE 225
PHOENIX, AZ 85028

INTRODUCTION
Applied Economics has been contracted by Honeywell International, Inc. (Honeywell) to
perform a third party economic and revenue analysis of the operations of Honeywell within
Foreign Trade Zone (FTZ) 75. There are four existing Honeywell sites within the FTZ including
Deer Valley (AZ75), Tempe (AZ18), Sky Harbor (AZ17) and Airport (AZ70/AZ43). There is a 5th
site located on Grant Street in Phoenix that is in progress for a Minor Boundary Modification.
Labor and equipment related to distribution operations from the Deer Valley and Sky Harbor
sites will be relocated to the Grant Street Facility. Since this new site will not result in any
expansion, the jobs and capital investment in this report are reported at the existing four FTZ
sites.
Honeywell is not currently receiving any of the property tax benefits related to Foreign Trade
Zones in Arizona, and is in the process of applying to receive a property reclassification for
future capital investment at sites within the FTZ. The purpose of this report is to show the
economic and revenue impacts of Honeywell’s current operations and the benefits to local
jurisdictions, as well as the impact of future capital investment and how the property tax
reduction will affect local taxing jurisdictions.
Honeywell is currently the second largest manufacturer in Maricopa County, after Intel. They
manufacture aircraft engines, systems and components locally and make millions of dollars
annually in local vendor purchases. The Honeywell Aerospace Global Headquarters is located at
the Sky Harbor site. Honeywell has a total of five sites in Maricopa County (seven in Arizona
overall), of which four are currently located in FTZ 75. These four sites employ close to 7,000
people in Phoenix and Tempe at an average wage of $96,300, which is 173 percent higher than
the county median wage.
FIGURE 1
HONEYWELL JOBS AND PAYROLL BY SITE
Jobs by Type
Distribution/ Management & Average
Site Manufacturing Supply Chain Administration Total Jobs Annual Payroll Wage
AZ17‐Sky Harbor 154 583 452 1,189 $109,596,879 $92,176
AZ18‐Tempe 403 697 423 1,523 $139,636,115 $91,685
AZ70/AZ43‐Airport 1,206 662 178 2,046 $195,062,538 $95,338
AZ75‐Deer Valley 1,549 270 372 2,191 $224,856,109 $102,627
Total 3,312 2,212 1,425 6,949 $669,151,641 $96,295
Source: Honeywell International, Inc., 2016.
As an aerospace manufacturer, Honeywell has a very capital‐intensive operation resulting in a
significant investment in plant and equipment in Maricopa County. At the four sites combined,
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Honeywell has an assessed value of $95.3 million in real property and $67.4 million in personal
property based on information from the Maricopa County Assessor. This existing investment,
which would not be affected by the FTZ property reclassification, generates a significant
amount of property tax revenues for local jurisdictions.
FIGURE 2
HONEYWELL PROPERTY VALUE BY SITE
Site Real Property Personal Property Total
AZ17‐Sky Harbor* $0 $3,847,100 $3,847,100
AZ18‐Tempe $51,901,815 $5,151,900 $57,053,715
AZ70/AZ43‐Airport $15,405,780 $26,942,600 $42,348,380
AZ75‐Deer Valley $28,000,000 $31,504,000 $59,504,000
Total $95,307,595 $67,445,600 $162,753,195
Source: Maricopa County Assessor, 2016.
Note: Sky Harbor site is owned by City of Phoenix and leased to Honeywell.
The information and observations contained in this report are based on our present knowledge
of the components of development, and of the current physical, socioeconomic and fiscal
conditions of the affected areas. Estimates made in this analysis are based on hypothetical
assumptions, current tax policies, and the current economic structure of the region. However,
even if the assumptions outlined in this report were to occur, there will usually be differences
between the estimates and the actual results because events and circumstances frequently do
not occur as expected. This analysis is based on the best available information and, as noted is
intended to aid Maricopa County and the cities of Phoenix and Tempe in quantifying
Honeywell’s impacts on the local economy. Applied Economics will not be liable for any
damages resulting from the use of the report. This report may be used only for the purposes
that it was intended.
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HONEYWELL FTZ IMPACT SUMMARY
Jobs and Payroll
Total Employees ~6,900
Total Annual Payroll $669.2 M
Capital Investment
Land and Buildings $95.3 M
Existing Equipment $67.4 M
Future Equipment Purchases $285.6 M
Economic Impacts
Annual Impact of Operations $3.4 B
Total Job Impacts 6,949 Direct/7,020 Indirect
Total Payroll Impact $669.2M Direct/$363.1 Indirect
Annual Revenue Impacts
Existing Sales and Property Taxes* $6.3 M
Maricopa County $0.6 M
City of Phoenix $0.7 M
City of Tempe $0.5 M
Other State and Local Governments $4.5 M
New Property Taxes with FTZ Benefits* $1.1 M
Maricopa County $0.1 M
City of Phoenix $0.1M
City of Tempe $0.1 M
Other Local Governments $0.8 M
*Existing taxes include Honeywell 2015 sales and property tax paid by jurisdiction. New
property taxes based on new capital investment with FTZ reclassification.
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IMPACT SUMMARY
Honeywell’s operations in the FTZ provide a wide range of economic benefits to the area. As an
export industry, Honeywell sells its products outside the local market and brings new wealth
into the region. The economic impacts in this analysis measure the effects of economic stimuli,
or expenditures, in the local economy. These impacts include direct and indirect jobs, personal
income and economic activity, or output that is generated by Honeywell’s operations. Indirect
and induced impacts are the result of the multiplier effect and capture supported supplier and
consumer businesses and their employees that benefit from the company’s operations.
Revenue impacts, which are in addition to the economic impacts, are defined as tax revenues to
cities, school districts, special districts and the county that flow directly and indirectly from
expenditures made by the company in Maricopa County.
Economic Impacts
• On‐Going Operations Impacts. In total, the four Honeywell sites in the FTZ create an
annual economic impact of $3.41 billion in Maricopa County. The company’s operations
directly and indirectly support an approximately 13,969 jobs (including approximately
6,900 direct jobs) and generate $1.03 billion in annual personal income in the county.
• Jobs and Income. Honeywell directly employs approximately 6,900 people at sites
within the FTZ with an annual payroll of $669.2 million, or an estimated average salary
of $96,295. Through the multiplier effect, approximately 7,020 additional jobs (1,666
supply chain jobs plus 5,353 jobs related to employee spending) and $363.1 million in
annual payroll are supported at other local businesses in Maricopa County.
• Supply Chain Impacts. In 2015, Honeywell spent an estimated $183.3 million with
Maricopa County‐based vendors. This supply chain spending supports an estimated
1,666 additional jobs and $102.4 million in payroll at local vendor businesses. These
indirect or supply chain impacts are part of the total economic impact created by the
company. The fact that Honeywell makes a sizeable share of vendor purchases from
local companies increases the multiplier effect in terms of the share of economic
benefits that stay in Maricopa County. These local vendors, in turn, are likely to make
purchases locally, resulting in a cascade of economic benefits to the region.
• Employee Spending. The approximately 6,900 employees at the four Honeywell sites in
the FTZ create a significant amount of consumer demand in the region. Through their
household spending, they support an additional 5,353 jobs and $260.7 million in payroll,
or personal income, at the local businesses where they make purchases and at suppliers
to those businesses.
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ƒ Supported Population. The approximately 6,900 direct jobs and 7,020 indirect jobs
associated with Honeywell’s local operations support a population (including
families) of about 31,000 people in Maricopa County, supporting demand for retail,
housing and other commerce.
Revenue Impacts
• Future FTZ Property Tax Impacts. With $285.6 million in new capital investment
planned over the next three years, Honeywell will generate $1.1 million in new
annual property tax revenues to local jurisdictions, net of the property tax
reductions in the FTZ.
• Local Revenue Impacts. Honeywell’s existing operations generate significant tax
revenues to the cities of Phoenix and Tempe, Maricopa County and local schools, in
addition to the economic impacts described above. The company currently pays
$2.2 million in annual city, county and state sales and use taxes on vendor
purchases. In addition, Honeywell pays $4.0 million in on‐going property tax
revenues to the city, county, schools and other special districts. These annual
property tax revenues on existing buildings and equipment would not be impacted
by the FTZ reclassification. However, of the $6.2 million total existing annual tax
revenues, $4.0 million in sales and personal property taxes depend on Honeywell
maintaining its current level of operations at these sites.
• Employee Revenue Impacts. In addition to revenues generated by the company,
Honeywell employees, and employees at vendor businesses and businesses where
employees shop, also generate property and sales tax revenues in Maricopa County.
Employee‐based revenues from direct and indirect jobs are estimated at $48.1
million per year, including $6.4 million in revenues to the county, $23.8 million in
revenues to local cities, school districts and other special districts and $17.9 million
to the state.
Honeywell is a significant contributor to the region’s economy. The approximately 6,900 high‐
paying jobs associated with the company’s FTZ sites are export industry jobs that bring new
wealth into the local economy. Honeywell is a key player in the aerospace and aviation sector,
which is a primary component of the region’s industry base. Through millions in annual local
vendor purchases and spending by employees, Honeywell also supports thousands of jobs and
payroll at related local supplier and consumer businesses throughout the region. Supporting
aerospace and aviation manufacturing operations is critical to maintaining Arizona’s role as a
leading location for the global aerospace industry.
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ECONOMIC IMPACT ANALYSIS
The economic benefits resulting from Honeywell’s operations in FTZ 75 can be measured in
terms of jobs, personal income and output or economic activity. These impacts include direct
jobs, payroll and production generated by Honeywell. Indirect impacts are the result of the
multiplier effect and capture supported vendors as well as local suppliers to those vendors.
Induced impacts capture the jobs, payroll and sales at consumer businesses that sell products
and services to employees of Honeywell and its vendors.
Operations Impacts
Honeywell’s operations in the FTZ have an estimated annual economic impact of $3.41 billion
on Maricopa County’s economy. The company directly and indirectly supports close to 14,000
jobs and $1.03 billion in annual payroll throughout the county (Figure 2). This includes the
value of the manufacturing, distribution and headquarters operations, as well as the impacts of
vendor purchases and employee spending at other local businesses.
Economic impact analysis is a means for identifying the nature of changes in jobs, personal
income and business activity that can occur in a given area. Economic impacts include direct
and indirect jobs, personal income, and economic activity, or output that is generated by the
company through its operations in the FTZ. Indirect impacts are the result of the multiplier
effect, and capture supported supplier and consumer businesses and employees throughout
the county that benefit from Honeywell.
Direct impacts from Honeywell’s operations include the value of goods and services produced,
including the cost of labor and other inputs. Vendor purchases by Honeywell, in turn, become
sales for other local businesses. These indirect or supply chain impacts are part of the total
economic impact created by the company. In 2015, Honeywell sites in the FTZ spent an
estimated $183.3 million with local vendors (excluding capital equipment). This supply chain
spending supports an estimated 1,666 additional jobs and $102.4 million in payroll at local
vendor businesses and their suppliers.
Impacts in Related Industries
Honeywell provided detail on the types of goods and services they purchase from local vendors.
Multipliers specific to each of those industries were used to estimate the supply chain impacts.
Major purchase categories include engineering services, machining, fabricated metal parts,
electricity, mechanical assemblies and plastic/rubber products.
The employees of Honeywell, as well as employees at local vendors, re‐spend a portion of their
paychecks in the region. Total employee spending, including spending by supported vendor
employees, is estimated at $685.9 million, which translates into sales at local retail and service
establishments in the communities where employees live. This spending supports an estimated
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5,353 local jobs and $260.7 million in payroll at the consumer businesses that benefit from
employee purchases.
FIGURE 3
ANNUAL ECONOMIC IMPACT OF HONEYWELL OPERATIONS IN FTZ 75
Site Jobs Payroll Output
Direct Impacts
AZ17‐Sky Harbor 1,189 $109,596,879 $272,302,668
AZ18‐Tempe 1,523 $139,636,115 $368,118,774
AZ70‐Airport 2,046 $195,062,538 $841,603,706
AZ75‐Deer Valley 2,191 $224,856,109 $924,400,690
Sum of Direct 6,949 $669,151,641 $2,406,425,839
Supply Chain Impacts
AZ17‐Sky Harbor 161 $9,381,404 $24,876,558
AZ18‐Tempe 463 $26,429,490 $77,614,302
AZ70‐Airport 794 $50,883,686 $173,300,605
AZ75‐Deer Valley 249 $15,701,248 $37,415,108
Sum of Supply Chain 1,666 $102,395,829 $313,206,573
Employee Spending Impacts
AZ17‐Sky Harbor 877 $42,701,684 $112,332,746
AZ18‐Tempe 1,117 $54,405,721 $143,121,852
AZ70‐Airport 1,561 $76,001,241 $199,931,884
AZ75‐Deer Valley 1,799 $87,609,561 $230,469,192
Sum of Employee Spending 5,353 $260,718,208 $685,855,673
Total Impacts
AZ17‐Sky Harbor 2,226 $161,679,967 $409,511,972
AZ18‐Tempe 3,103 $220,471,327 $588,854,927
AZ70‐Airport 4,401 $321,947,465 $1,214,836,196
AZ75‐Deer Valley 4,238 $328,166,918 $1,192,284,990
Grand Total 13,969 $1,032,265,678 $3,405,488,085
The new jobs generated directly and indirectly by Honeywell sites in the FTZ support a resident
base in Maricopa County of about 31,000 people. This includes families of direct employees, as
well as families of employees at related supplier and consumer businesses.
The secondary or indirect/induced impacts described here are called multiplier effects.
Multiplier effects are a way of representing the larger economic effects on the local economy.
The multiplier effects translate an increase in output (defined as wages plus supply costs plus
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profits) into a corresponding increase in jobs and personal income. In essence, the multiplier
effect represents the recycling of local spending. This recycling process creates new business
opportunities.
The multipliers used in this analysis are from IMPLAN, a national vendor of economic impact
software, and are specific to the economic base of Maricopa County. Industry specific
multipliers for aircraft engines and other aircraft parts manufacturing industries were used for
direct impacts. Multipliers for 74 additional supplier industries were used to estimate the
indirect impacts, and household spending multipliers were used for the induced impacts. The
overall output multiplier for Honeywell’s operations in the FTZ is 1.42. This means that for
every $1 million of output created by the company at these four sites, an additional $420,000 in
economic activity is generated in Maricopa County, along with about 6 jobs and $429,000 in
payroll.
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TAX REVENUE IMPACTS
In addition to supporting jobs and output at related businesses through multiplier effects,
Honeywell generates significant tax revenues for Maricopa County, as well as for the cities of
Phoenix and Tempe, local school districts and other local taxing jurisdictions. The employees at
Honeywell and at other supported businesses generate an estimated $71.0 million in sales and
property tax revenues to local governments each year, based on the assumptions used in this
analysis.
Existing Company Revenue Impacts
The existing local tax revenues generated by Honeywell would not be affected by the FTZ
application. The company generated nearly $6.3 million in annual sales and property tax
revenues in 2015 (Figure 4A). Honeywell pays sales tax on many of their local purchases. They
also pay use tax on purchases and repair services performed outside the region. Additionally,
they generate taxes on sales to local customers. Those sales tax revenues are divided between
the state, Maricopa County, Tempe and Phoenix, based on the tax rates of those jurisdictions
and the Honeywell site where the purchase or sale originates. Annual sales taxes to state and
local governments totaled $2.2 million in 2015.
FIGURE 4A
2015 STATE AND LOCAL REVENUE IMPACTS
OF EXISTING HONEYWELL OPERATIONS IN FTZ 75
Sales Tax
Maricopa Total Annual
Site Phoenix Tempe County State Revenues
AZ17‐Sky Harbor $179,099 $0 $54,508 $436,067 $669,674
AZ18‐Tempe $0 $236,621 $92,019 $736,153 $1,064,793
AZ70/AZ43‐Airport $92,572 $0 $28,174 $225,393 $346,139
AZ75‐Deer Valley $43,802 $0 $13,331 $106,648 $163,781
Total $315,473 $236,621 $188,033 $1,504,260 $2,244,386
Honeywell also generates a significant amount of property taxes from their operations in the
FTZ. These sites have an assessed value of $95.3 million in land and buildings and $67.4 million
in equipment and other personal property. This results in an estimated $4.0 million in annual
property tax revenues (Figure 4B). About half of these revenues go to local school districts.
Note that the Sky Harbor site is leased from the City of Phoenix and therefore does not
generate any real property taxes. Hence, the property tax revenues from that site are less than
from the other sites listed in Figure 4B.
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FIGURE 4B
2015 STATE AND LOCAL REVENUE IMPACTS
OF EXISTING HONEYWELL OPERATIONS IN FTZ 75
Property Tax
Maricopa Comm Special Total Annual
Site Phoenix Tempe County Schools College Districts Revenues
AZ17‐Sky Harbor $12,837 $0 $9,598 $83,383 $10,537 $8,280 $124,635
AZ18‐Tempe $0 $241,190 $130,278 $658,713 $143,019 $117,163 $1,290,363
AZ70/AZ43‐Airport $141,712 $0 $105,965 $802,391 $116,329 $91,405 $1,257,802
AZ75‐Deer Valley $198,241 $0 $148,234 $688,832 $162,732 $135,468 $1,333,506
Total $352,790 $241,190 $394,075 $2,233,319 $432,617 $352,315 $4,006,306
Existing Employee Revenue Impacts
Along with the taxes paid by the company, there are also taxes generated by employees,
including both employees of Honeywell and supported employees at other local businesses.
Using the results from the economic impact analysis, it is possible to estimate employee
revenue impacts.
The direct and indirect employees supported by Honeywell pay an estimated $21.5 million in
property tax revenues each year to local jurisdictions (Figure 5). Property tax revenues from
employees are based on average residential assessed value per capita in Maricopa County,
times the annual supported population related to Honeywell, times the county average
property tax rate. The impacts accrue to individual cities and school districts depending on
where employees live.
Employee sales taxes on household purchases are estimated at $26.6 million per year to local
cities, Maricopa County and the state. Sales taxes are estimated by multiplying total personal
income from the economic impact times 31 percent (share of taxable expenditures), times an
average state and local sales tax rate of 8.3 percent.1
1 According to the Census Bureau Consumer Expenditure Survey, persons in the median income range spend about
31 percent of their income on taxable goods.
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FIGURE 5
ANNUAL EMPLOYEE REVENUE IMPACTS
Property Tax Sales Tax
Special
Cities County Schools Districts Cities County State Total
Direct Employees $879,315 $2,071,463 $6,594,862 $1,166,783 $4,148,740 $1,452,059 $11,616,472 $27,929,694
Indirect Employees $888,263 $2,092,542 $6,661,969 $1,178,656 $2,251,307 $787,957 $6,303,660 $20,164,353
Total $1,767,577 $4,164,004 $13,256,831 $2,345,439 $6,400,047 $2,240,017 $17,920,132 $48,094,047
FTZ Impacts of Future Capital Investment
Honeywell has plans to invest an estimated $285.6 million in new equipment and other
personal property in 2016 through 2018. If the application for FTZ benefits is approved, these
investments would be reclassified as Class 6 property within the FTZ, reducing the assessment
ratio from 18 percent to 5 percent. Purchases by Honeywell would include software, tooling
and hardware. Appropriate depreciation schedules are applied to each type of purchase.2
Accelerated depreciation does not apply to reclassified property within the FTZ. Each of the
Honeywell sites is located in a different tax rate area, and the Airport site is split between two
tax rate areas. Based on current mill rates within each of these tax rate areas and site specific
capital purchases, Figure 6 shows the amount of new property taxes by year and by jurisdiction
if the FTZ application for property reclassification is approved. This would result in $5.1 million
in new tax revenues to cities, school districts, the county, community colleges and other special
districts over the next five years.
In order to clearly show the results of the FTZ property reclassification and the impacts to local
jurisdictions, Figure 7 details the amount of new property taxes by jurisdiction over the next
five years at a normal 18 percent assessment ratio. This calculation also includes accelerated
depreciation on all equipment. Under these conditions, the new capital purchases by
Honeywell would generate $9.0 million in tax revenues over the next five years.
2 Depreciation schedules from the Arizona Department of Revenue 2016 Personal Property Manual were applied
as follows: Software – Table 5, 4 year life; Tooling – Table 1, 12 year life; Hardware – Table 1, 8 year life.
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FIGURE 6
ANNUAL PROPERTY TAX REVENUES BY JURISDICTION WITH FTZ BENEFITS
New Property Tax by Jurisdiction
Annual Deer Maricopa Flood County First State
New Taxable City of City of Phoenix Wilson Balsz Tempe Kyrene Valley EVIT/ Comm Maricopa Library Control Special District Water Con‐ Equal‐
Investment Value* Phoenix Tempe Union HS Elem Elem Union HS Elem Unified WESTMEC Colleges County District District Health Assist servation ization Total
AZ17‐Sky Harbor
2016 $4,568,000 $200,200 $3,644 $0 $9,924 $13,744 $0 $0 $0 $0 $0 $2,991 $2,725 $111 $319 $605 $23 $280 $1,012 $35,377
2017 $2,172,400 $272,482 $4,959 $0 $13,507 $18,706 $0 $0 $0 $0 $0 $4,071 $3,708 $152 $434 $823 $32 $381 $1,377 $48,151
2018 $1,592,900 $306,443 $5,577 $0 $15,191 $21,038 $0 $0 $0 $0 $0 $4,578 $4,170 $170 $488 $926 $36 $429 $1,549 $54,152
2019 $0 $261,231 $4,754 $0 $12,950 $17,934 $0 $0 $0 $0 $0 $3,903 $3,555 $145 $416 $789 $30 $366 $1,320 $46,162
2020 $0 $215,654 $3,925 $0 $10,690 $14,805 $0 $0 $0 $0 $0 $3,222 $2,935 $120 $343 $651 $25 $302 $1,090 $38,108
AZ18‐Tempe
2016 $63,676,400 $2,066,856 $0 $52,074 $0 $0 $0 $59,416 $82,804 $0 $1,033 $30,879 $28,128 $1,149 $3,290 $6,244 $240 $2,894 $10,446 $278,598
2017 $18,161,400 $2,262,897 $0 $57,014 $0 $0 $0 $65,051 $90,658 $0 $1,131 $33,808 $30,796 $1,258 $3,603 $6,836 $262 $3,168 $11,437 $305,023
2018 $1,707,300 $1,878,831 $0 $47,337 $0 $0 $0 $54,011 $75,272 $0 $939 $28,070 $25,569 $1,045 $2,991 $5,676 $218 $2,630 $9,496 $253,253
2019 $0 $1,431,672 $0 $36,071 $0 $0 $0 $41,156 $57,357 $0 $716 $21,389 $19,484 $796 $2,279 $4,325 $166 $2,004 $7,236 $192,979
2020 $0 $1,036,089 $0 $26,104 $0 $0 $0 $29,784 $41,509 $0 $518 $15,479 $14,100 $576 $1,649 $3,130 $120 $1,451 $5,236 $139,658
AZ70/AZ43‐Airport
2016 $56,155,400 $2,426,393 $44,160 $0 $120,279 $0 $111,141 $0 $0 $0 $0 $36,250 $33,021 $1,349 $3,863 $7,330 $281 $3,397 $12,263 $373,334
2017 $24,500,000 $3,192,261 $58,099 $0 $158,244 $0 $146,222 $0 $0 $0 $0 $47,692 $43,443 $1,775 $5,082 $9,644 $370 $4,469 $16,134 $491,174
2018 $5,214,300 $3,003,829 $54,670 $0 $148,903 $0 $137,590 $0 $0 $0 $0 $44,877 $40,879 $1,670 $4,782 $9,075 $348 $4,205 $15,181 $462,181
2019 $0 $2,552,591 $46,457 $0 $126,534 $0 $116,921 $0 $0 $0 $0 $38,136 $34,738 $1,419 $4,064 $7,711 $296 $3,574 $12,901 $392,752
2020 $0 $2,108,677 $38,378 $0 $104,529 $0 $96,588 $0 $0 $0 $0 $31,504 $28,697 $1,172 $3,357 $6,370 $245 $2,952 $10,657 $324,450
AZ75‐Deer Valley
2016 $70,151,400 $2,731,973 $49,722 $0 $0 $0 $0 $0 $0 $172,770 $1,907 $40,816 $37,179 $1,519 $4,349 $8,253 $317 $3,825 $13,807 $334,464
2017 $36,361,800 $3,684,390 $67,056 $0 $0 $0 $0 $0 $0 $233,001 $2,572 $55,045 $50,141 $2,049 $5,866 $11,131 $427 $5,158 $18,621 $451,065
2018 $1,330,900 $3,098,032 $56,384 $0 $0 $0 $0 $0 $0 $195,920 $2,162 $46,285 $42,161 $1,723 $4,932 $9,359 $359 $4,337 $15,657 $379,280
2019 $0 $2,478,555 $45,110 $0 $0 $0 $0 $0 $0 $156,744 $1,730 $37,030 $33,731 $1,378 $3,946 $7,488 $288 $3,470 $12,527 $303,440
2020 $0 $1,880,644 $34,228 $0 $0 $0 $0 $0 $0 $118,932 $1,313 $28,097 $25,594 $1,046 $2,994 $5,681 $218 $2,633 $9,505 $230,240
5 Yr Total $285,592,200 $517,123 $218,600 $720,751 $86,228 $608,462 $249,419 $347,600 $877,366 $14,022 $554,120 $504,754 $20,622 $59,047 $112,048 $4,302 $51,926 $187,451 $5,133,841
*Includes regular depreciation and 5 percent assessment ratio

FIGURE 7
ANNUAL PROPERTY TAX REVENUES BY JURISDICTION WITHOUT FTZ BENEFITS
New Property Tax by Jurisdiction
Annual Maricopa Flood County First State
New Taxable City of City of Phoenix Wilson Tempe Kyrene Deer Valley EVIT/ Comm Maricopa Library Control Special District Water Con‐ Equal‐
Investment Value* Phoenix Tempe Union HS Elem Balsz Elem Union HS Elem Unified WESTMEC Colleges County District District Health Assist servation ization Total
AZ17‐Sky Harbor
2016 $4,568,000 $180,180 $3,279 $0 $8,932 $12,370 $0 $0 $0 $0 $0 $2,692 $2,452 $100 $287 $544 $21 $252 $911 $31,840
2017 $2,172,400 $346,918 $6,314 $0 $17,197 $23,817 $0 $0 $0 $0 $0 $5,183 $4,721 $193 $552 $1,048 $40 $486 $1,753 $61,304
2018 $1,592,900 $500,114 $9,102 $0 $24,791 $34,334 $0 $0 $0 $0 $0 $7,472 $6,806 $278 $796 $1,511 $58 $700 $2,528 $88,376
2019 $0 $574,574 $10,457 $0 $28,482 $39,446 $0 $0 $0 $0 $0 $8,584 $7,819 $319 $915 $1,736 $67 $804 $2,904 $101,534
2020 $0 $596,865 $10,863 $0 $29,587 $40,976 $0 $0 $0 $0 $0 $8,917 $8,123 $332 $950 $1,803 $69 $836 $3,017 $105,473
AZ18‐Tempe
2016 $63,676,400 $1,860,170 $0 $46,867 $0 $0 $0 $53,474 $74,524 $0 $930 $27,791 $25,315 $1,034 $2,961 $5,620 $216 $2,604 $9,401 $250,738
2017 $18,161,400 $2,928,597 $0 $73,786 $0 $0 $0 $84,188 $117,328 $0 $1,464 $43,753 $39,855 $1,628 $4,662 $8,847 $340 $4,100 $14,801 $394,754
2018 $1,707,300 $3,432,914 $0 $86,492 $0 $0 $0 $98,686 $137,533 $0 $1,716 $51,288 $46,719 $1,909 $5,465 $10,371 $398 $4,806 $17,350 $462,733
2019 $0 $3,409,275 $0 $85,897 $0 $0 $0 $98,006 $136,586 $0 $1,705 $50,935 $46,397 $1,896 $5,428 $10,299 $395 $4,773 $17,230 $459,546
2020 $0 $3,033,122 $0 $76,420 $0 $0 $0 $87,193 $121,516 $0 $1,517 $45,315 $41,278 $1,686 $4,829 $9,163 $352 $4,246 $15,329 $408,844
AZ70/AZ43‐Airport
2016 $56,155,400 $2,183,753 $39,744 $0 $108,251 $0 $100,027 $0 $0 $0 $0 $32,625 $29,719 $1,214 $3,477 $6,597 $253 $3,057 $11,037 $336,001
2017 $24,500,000 $4,099,446 $74,610 $0 $203,214 $0 $187,775 $0 $0 $0 $0 $61,246 $55,789 $2,279 $6,526 $12,384 $476 $5,739 $20,719 $630,757
2018 $5,214,300 $5,360,813 $97,567 $0 $265,741 $0 $245,552 $0 $0 $0 $0 $80,091 $72,955 $2,981 $8,534 $16,195 $622 $7,505 $27,094 $824,836
2019 $0 $6,008,602 $109,357 $0 $297,852 $0 $275,224 $0 $0 $0 $0 $89,769 $81,771 $3,341 $9,566 $18,152 $697 $8,412 $30,367 $924,507
2020 $0 $6,164,052 $112,186 $0 $305,558 $0 $282,344 $0 $0 $0 $0 $92,091 $83,887 $3,427 $9,813 $18,622 $715 $8,630 $31,153 $948,426
AZ75‐Deer Valley
2016 $70,151,400 $2,458,775 $44,750 $0 $0 $0 $0 $0 $0 $155,493 $1,716 $36,734 $33,461 $1,367 $3,914 $7,428 $285 $3,442 $12,427 $301,018
2017 $36,361,800 $4,622,700 $84,133 $0 $0 $0 $0 $0 $0 $292,340 $3,227 $69,063 $62,910 $2,570 $7,359 $13,965 $536 $6,472 $23,363 $565,939
2018 $1,330,900 $5,614,692 $102,187 $0 $0 $0 $0 $0 $0 $355,073 $3,919 $83,884 $76,410 $3,122 $8,939 $16,962 $651 $7,861 $28,377 $687,384
2019 $0 $5,900,190 $107,383 $0 $0 $0 $0 $0 $0 $373,128 $4,118 $88,149 $80,296 $3,281 $9,393 $17,824 $684 $8,260 $29,820 $722,337
2020 $0 $5,541,386 $100,853 $0 $0 $0 $0 $0 $0 $350,437 $3,868 $82,788 $75,413 $3,081 $8,822 $16,741 $643 $7,758 $28,006 $678,410
5 Yr Total $285,592,200 $912,786 $369,461 $1,289,605 $150,942 $1,090,922 $421,548 $587,487 $1,526,471 $24,180 $968,368 $882,096 $36,038 $103,189 $195,813 $7,519 $90,744 $327,586 $8,984,755
*Includes accelerated depreciation and 18 percent assessment ratio

Summary
The operations of Honeywell in FTZ 75 create significant economic benefits for Maricopa
County. The company not only supports a large number of high‐paying jobs in Phoenix and
Tempe, but also creates significant additional demand for other local businesses based on
supply chain purchases and employee spending. This, in turn, more than doubles the total
number of jobs supported directly and indirectly by Honeywell. Along with supporting
economic activity in the private sector, Honeywell’s existing operations in the FTZ generate $4.0
million in on‐going annual tax revenues to local jurisdictions, and this is not expected to change.
The $285.6 million additional capital investment that is planned at these Honeywell sites over
the next three years will generate an average of $1.1 million in new annual property tax
revenues, based on approval of the application for FTZ property reclassification. Honeywell is a
key player in the aerospace and aviation industry in Greater Phoenix, and investing in retaining
and growing their local operations through FTZ incentives provides support for long‐term
growth of the regional economy.
Applied Economics Background
Applied Economics LLC is an economic consulting firm, based in Phoenix, Arizona, specializing in
economic development, economic and fiscal impact assessment, socioeconomic modeling,
urban planning and custom software applications. Applied Economics conducts economic and
fiscal impact studies and develops models to measure the effects of a wide variety of activities.
These activities include development land use and policy changes, business‐driven economic
impacts, incentives, and program‐driven economic and fiscal impacts. The partners at Applied
Economics have worked together for more than twenty five years, and are very experienced in
working with local and regional planning and development issues. Applied Economics was
formed in 1995 and specializes in the technical aspects of economic development.