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Michigan gave GM a $3.8 billion tax credit cap in 2009, the company reveals

GM plans to issue profit-sharing checks to workers, the NYT reports.
Steve Carmody
Michigan Radio
GM received the $3.8 billion cap to cover 2010 to 2029 under the Michigan Economic Growth Authority (MEGA) program

General Motors disclosed it received a $3.8 billion tax credit from Michigan after filing for bankruptcy in 2009 on Friday.

First reported by MLive, the company received the $3.8 billion cap to cover 2010 to 2029 under the Michigan Economic Growth Authority (MEGA) program according to an email from GM spokesperson Elizabeth Winter.

“The Michigan Economic Growth Authority (MEGA) Agreement is an incredibly successful program that encouraged GM to build and grow in Michigan,” Winter said in the email. “It provides companies a tax credit tied to job creation in the state.”

The tax credit cap was negotiated in 2015. GM and state leaders did not disclose the new tax cap. Then in 2016, Detroit resident David Sole requested the amount of the tax credit cap through the state Freedom of Information Act from the Michigan Economic Development Corp. (MEDC) That amount was redacted in the response he received.

The cap was reduced to $3.475 billion in January 2020. GM leveraged approximately $1.2 billion of this tax benefit between 2010 and 2019, Winter wrote.

Last week, the state Supreme Court mandated that the Michigan Economic Development Corporation (MEDC) must release details of the 2016 agreement. The court ruled that the value of tax credits GM could claim through the Michigan Strategic Fund is not exempt from the Freedom of Information Act (FOIA).

The state had argued that the tax credit amount was exempt as “financial or proprietary information” under FOIA– an exemption used in the past for companies applying for similar deals.

“The Court has not diminished the ability of MEDC to work with interested projects, or the (Michigan Strategic Fund) and its potential awardees to enter into written incentive agreements,” MDEC wrote in a statement via email.

The MEDC also said that the Court did not change its ability to withhold certain financial and proprietary information under the Michigan Strategic Fund (MSF) Act that is not written in the MSF incentive agreement. Rather, the statement said, financial or proprietary information that has been granted confidentiality under the MSF Act cannot be redacted if the written agreement contains that information.

Winter also wrote that GM has created 10,078 jobs since 2011.

“The state constitution guarantees that Michiganders know what their tax dollars are being spent on and this case reaffirmed that and we appreciated that– especially once we found out what a vast amount of money it really was,” said the Michigan Press Association’s public affairs manager Lisa McGraw. MPA signed onto an amicus brief against the state in the case.

Sophia Kalakailo joined Michigan Radio in Sept. 2021 and is a senior at Michigan State University studying journalism and minoring in documentary production. She previously interned at Bridge Michigan and was an editor for The State News and The Eastern Echo covering a wide range of topics.
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