Ohio Looks To Reclaim GM Tax Break

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The State of Ohio is considering clawing back tax credits that it granted to General Motors in exchange for a commitment by the company to keep open its Lordstown auto plant.

According to a report originally published by ProPublica and The Business Journal, based in Youngstown, Ohio, the state Development Services Agency told GM in March it was recommending the Ohio tax authority terminate the tax agreements and collect a full refund.

GM was awarded $60 million in tax credits in 2009. The company was required to keep the plant open until 2028 to qualify for $46.1 million of the breaks, and until 2037 to receive the remaining $14.2 million.

GM received the tax breaks until 2016. It began cutting jobs in January 2017 and shut the plant entirely in 2019 after demand for its small car, the Cruze, which was produced at the plant, collapsed.

“This would be the biggest clawback of tax breaks that I can think of,” Greg LeRoy, the executive director of Good Jobs First, which tracks tax credit programs, said. “I assume there’s a lot of pressure on the state administration to cave. I hope they keep the right course.”

The Lordstown plant employed 4,200 people before the company began cutting jobs.

In a letter to the state, GM asked that it not have to pay back the tax credits. “GM is mindful of the significant impact that the Lordstown facility closure had on the state of Ohio and the local Lordstown community,” the company said in the letter. “Cash preservation is critically important to General Motors to support a vigorous emergence from the economic and global health crisis and to protect our ongoing investments and workforce in Ohio and the United States.”

The United Auto Workers union, which said GM should shift other products to Lordstown instead of closing the plant, has not spoken out on the tax credits.

The next session of the tax authority is scheduled for July 27.