A law meant to clean Michigan’s air now costs the state billions with little oversight. Michigan’s heavy industry receives hundreds of millions of dollars to control pollution. When they don’t, they keep the savings. Michigan cities lose millions to pollution tax breaks with no oversight or say
BridgeDetroit Reporter Jena Brooker spent months investigating pollution control laws in Michigan and the environmental and economic impact when companies aren’t required to follow the laws.
Read the stories here:
- A law meant to clean Michigan’s air now costs the state billions with little oversight
- Michigan’s heavy industry receives hundreds of millions of dollars to control pollution. When they don’t, they keep the savings.
- Michigan cities lose millions to pollution tax breaks with no oversight, little say
- FAQ: What to know about Michigan’s pollution exemption law
Want a summary? Here are five things you need to know about what we learned:
Michigan has given over $1.2 billion in pollution-control tax breaks — but many recipients still violated air laws.
Over the past decade, Michigan municipalities have lost more than $1.2 billion in property tax revenue through the Air Pollution Control Exemption program. Nearly half of the 344 facilities BridgeDetroit reviewed since 2015 received air quality violations, including some that were cited repeatedly or sued under the Clean Air Act.
The program lacks oversight and enforcement.
Exemptions are granted by the Michigan State Tax Commission after review by the Michigan Department of Environment, Great Lakes and Energy (EGLE). However, EGLE says it does not have the staff or funding to monitor ongoing compliance, and neither EGLE nor the Tax Commission could identify a single case where a certificate was revoked for noncompliance — despite documented violations.
Local governments bear the financial burden but have little authority.
Because these are tax breaks being granted, municipalities lose tax revenue through this program. If the municipality chooses to push back against the tax commission determination, it has only 21 days to object before exemptions take effect or it must go to court to challenge them later. Many cities don’t even track how much revenue they lose. Fines for violations go to the state’s general fund — not to the affected communities.
The financial impact can be severe, especially in smaller communities
In large cities like Detroit, exemptions totaled about $46 million over 10 years, enough to run the libraries for a year. But in small municipalities, the impact can be dramatic. For example, in Port Sheldon, Consumers Energy exemptions equaled $122 million over a decade, averaging $2,300 per resident per year. In Monroe, DTE Energy received nearly $350 million in exemptions, about 50% of the city’s overall tax revenue during that same time period.
Companies argue that exemptions are common and separate from compliance penalties
Industry representatives say pollution-control tax exemptions are standard nationwide and should not be tied to violations, since companies are already subject to fines and enforcement. Critics argue the state is effectively “giving something away” without ensuring pollution reductions actually occur, raising questions about whether the law should be reformed or repealed.
This project was an initiative of the Kozik Environmental Justice Reporting Grants funded by the National Press Foundation and the National Press Club Journalism Institute.
Methodology: To determine the amount of lost property taxes exemption certificates from the Michigan Department of Treasury online reportswere used. Each certificate lists the cost of the equipment exempted. Using the initial assessed value of the equipment and the depreciated value over time according to the state’s Machines and Equipment schedule a local millage rate for where each facility is located was applied to the equipment values. Violations were calculated by using Shelby Jouppi’s dataset that organizes data published online by the Michigan Department of Environment, Great Lakes, and Energy. The addresses listed for exempted facilities were matched to the addresses where air quality violations occurred. Isabella McLaury, and Ted Tansley and Alex Hill of DETROITography.com contributed to this report. The text was fact-checked by Jeremy Verdusco. Graphics were provided by Matt Daniels.