Details from GM’s business tax credit deal with the quasi-public Michigan Economic Development Corp (MEDC) came to light this week after a Michigan Supreme Court ruling lifted the lid on the agreement. While the tax kickback deal has received the majority of the attention, the Freedom of Information Act request has also unearthed interesting details about the automaker’s workforce at its Renaissance Center in downtown Detroit, The Detroit News reports.
Weeks before the COVID-19 pandemic took hold in the United States in March 2020, state officials removed a stipulation in the tax credit agreement that required GM to maintain a workforce of at least 4,000 employees at its Renaissance Center complex. The building now sits largely vacant, with GM enacting its flexible ‘Work Appropriately’ policy that allows its white-collar employees to work from home or another remote location when possible.
Gov. Gretchen Whitmer’s administration agreed to remove the stipulation for minimum employee count in early 2020. In exchange, GM agreed to a lower tax credit amount, with the state lowering its obligations by $325 million for the period between 2019 and 2029. The Detroit News alleges the city’s tax collections have now taken a “permanent,” hit as a result of this deal, as it seems increasingly unlikely that employees will return to the Renaissance Center in large numbers.
The FOIA request revealed this week that GM has received $3.8 billion in tax credit kickbacks from the state of Michigan since it filed for bankruptcy in 2009. A previous ruling made under Gov. Rick Snyder allowed GM to keep the total value of the tax credits a secret, however a recent Michigan Supreme Court ruling tied to a public records request has now made the information freely available. GM claimed it was keeping the value of the kickbacks a secret for competitive reasons, despite the fact that rivals Ford and Stellantis disclosed the value of their tax credits in 2015.
GM received the most significant tax breaks under this agreement with the MEDC, with Ford and Stellantis getting $2.3 billion and $1.7 billion, respectively. The tax credit program is no longer active, but Michigan lawmakers estimate the state will be paying out the tax credits until 2030.