Chapter 4 addresses the question of the soundness of Ohio's investment of taxpayer dollars to assist Honda in locating and expanding its facilities in Ohio and whether there was a reasonable return on that investment. The Study reviewed both the direct (inducement grants for infrastructure and job training) and indirect (state provided highway funding) government investment provided by the state of Ohio on behalf of Honda, as well as the corresponding return on that investment in the form of taxes paid by Honda and its associates.
The state of Ohio provided $26.9 million in direct incentives to Honda from 1977-1988. The state also invested $64.4 million in highway funding for improving and widening U.S. Route 33, for a total state investment of $91.3 million.
In return, Honda and its
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associates have paid a total of $1,087.1 million in taxes from 1979-2003.
The soundness of the investment by the state and the significant return on that investment can be measured:
- Ohio has realized a significant rate of return on both its $26.9 million direct investment in Honda and its $64.4 million indirect investment in the widening of Route 33.
- The cumulative net fiscal benefit from 1979-2003 of Honda's presence in Ohio is conservatively estimated at $996 million.
- The Honda of America Manufacturing and Honda Engineering North America subsidiaries and their associates have paid more than $1 billion in taxes since 1979, and now pay over $100 million annually.
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- For each $1 the state spent on direct incentives, it has received nearly $40 in revenue benefits from the HAM and EGA subsidiaries of Honda alone.
- For each $1 invested by the state in direct incentives, Honda has invested $226.
- For each $1 invested by the state in both direct and indirect incentives, Honda has invested $67.
- 53 cities and 43 school districts benefit from the income tax receipts they receive from Honda and its associates.
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