A news service for the people of Michigan from the Mackinac Center for Public Policy

A state house committee is looking into an Auditor General's report that the state's flagship economic development program may have given out an estimated $150 million in tax credits erroneously.

The State House Tax Policy Committee will hold a hearing at 9 a.m. Wednesday on the audit of the Michigan Economic Growth Authority program.

The MEGA gives out tax credits to approved businesses for jobs they create.

The Auditor General report found several problems with the Michigan Strategic Fund's oversight of the MEGA tax credit program. The audit concluded that the MSF's procedures were "moderately effective."

State Representative Tom McMillin, R-Rochester Hills, said he was pleased the Democrats agreed with him that a hearing was warranted.

"Based on a review of the Auditor General's report, I can only conclude that there is likely $100 million — $200 million of tax credits actually given out that were not earned by the businesses receiving them," McMillin said in a press release. "I reach that conclusion because the Auditor General only looked at 7 percent of the tax credit certificates in one year and found $2.6 million of likely unearned, but awarded tax credits.  The businesses didn't really create the jobs they said they had in order to get the credits or the MEDC just gave them credits without checking on job creation numbers... but that was money out the door — money that should have remained in our state's coffers to help alleviate the budget crisis."

Meet James Hohman, Assistant Director of Fiscal Policy at the Mackinac Center. James discusses his latest project, an analysis of Proposal 1, the proposal on personal property tax reform that will appear on the August 5th ballot. Read more about Proposal 1 here: http://www.mackinac.org/20246


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