News Story

Billions In Michigan Taxpayer Dollars Flowing To Big 3

Shhhhh! State officials refuse to reveal how much

A state of Michigan corporate welfare program is projected to hand out $6.8 billion in state taxpayer-funded subsidies to the Big 3 automakers through 2030, according to an analysis done by the Mackinac Center for Public Policy.

The companies get billions of dollars, but the agency in charge, the Michigan Economic Development Corporation, refuses to disclose how much each company gets. It says the information is confidential under the same law that bans the state from releasing individual tax returns.

“This is a transparency problem,” said James Hohman, the director of fiscal policy for the Mackinac Center who did the analysis. “Your money is going to these companies and you can’t be told how much. Taxpayers deserve to know where their money is going.”

The corporate subsidies are part of the Michigan Economic Growth Authority program launched by Gov. John Engler and greatly expanded by Gov. Jennifer Granholm in the late 2000s. The program was suspended by Gov. Rick Snyder in 2011 and hasn’t authorized any new subsidies known as “refundable tax credits” since then.

The Big 3 car makers earned a combined $15.7 billion in profits in 2018: General Motors earned $8.0 billion; Fiat Chrysler earned $4.0 billion and Ford Motor Co. earned $3.7 billion.

“MEGA awards helped ensure the Big Three remained rooted in Michigan during the economic downturn, which helped lay the groundwork for Fiat Chrysler Automobiles, Ford and General Motors all announcing new investments in Michigan plants within the past few months, in addition to announcements like Ford’s investment in Michigan Central Station as the future home of its mobility-focused campus,” said Kathleen Achtenberg, spokesman for the MEDC.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.