The State of Ohio has ordered GM to tax incentives for a factory that it has closed.
A better idea is not to pay these bribes to the gods of capital in the first place:
The state of Ohio on Monday ordered General Motors to repay $28 million in public subsidies for reneging on its promise to keep its sprawling Lordstown plant open.
The automaker, which had pledged to keep operations going until 2040, closed its assembly plant last October, drawing criticism from elected officials in both political parties, including President Donald Trump. At the time, GM cited the collapsing market for small cars; Lordstown produced the compact Chevrolet Cruze.
But state officials said the closure violated the terms of two economic development agreements GM signed with Ohio more than a decade ago. Between 2009 and 2016, the company received more than $60 million in tax credits to maintain operations at the massive plant, which employed over 4,000 people.
On Monday, the Ohio Tax Credit Authority said GM must pay back roughly half of those tax benefits, as well as provide an additional $12 million in community support in the Mahoning Valley, the economically depressed region where the plant was located. The funds are targeted for education and job training at Youngstown State University and other colleges, community programs and infrastructure projects.
Although the clawback falls short of the total $60.3 million that GM received, the state’s action is significant, said Greg LeRoy, executive director of Good Jobs First, a nonprofit agency that tracks corporate subsidies and violations.
“The $28 million still stands as the biggest clawback we can point to” nationwide, he said. Yet he believes that the state should have pursued a total refund. “It’s kind of a two-thirds of a loaf for taxpayers.”
Unfortunately, it appears that authorities then doubled down on the same f%$#ing failed strategy:
At the same time, the tax authority awarded GM a new tax credit to support the battery plant. In return for a promise to create 1,000 jobs, the company will receive a 15-year tax break estimated to be worth $13.8 million over its term.
The numbers are clear on this: These incentives never pay for themselves.
It cost Scott Walker reelection in Wisconsin, but until a few more political “Flaming Datums” are out there, this insanity is likely to continue.