Ypsilanti offers cautionary tale on GM tax breaks

Jul 28, 2014

GM's Delta Township Plant
Credit Flickr - _salguod

Last Friday, General Motors announced plans for a $37-million expansion of its Delta Township auto production plant. GM will ask the city of Lansing for a tax incentive package to help finance the project. The company will make its initial request to the Lansing City Council this evening.

GM is asking for an incentive package that would cut its property taxes in half over 12 years.  The automaker says it will still provide $4-million in new taxes back to the city over that time.  This type of package is permitted under a state law known as Public Act 198.

One former GM community is warning Lansing about the potential pitfalls of granting such a deal.

Years ago, G-M operated two plants in Ypsilanti Township. The township gave the company some $200-million in tax abatements. But General Motors closed both of those plants, the first in 1992, the second in 2010. That left Ypsilanti taxpayers holding the bag, having devoted a lot of money that they say could have gone other things like education.

The township sued GM, and eventually a new state law was created that helps protect communities from this type of scenario.

Current State’s Kevin Lavery spoke with Doug Winters, the Ypsilanti Township attorney. He says his community’s experience is a cautionary tale for Lansing and any other community that may consider big tax abatements for General Motors.