House subcommittee hears MEDC briefing on MEGA tax credits, questions on transparency and oversight

The House Oversight Subcommittee on Corporate Subsidy and State Investments heard a briefing Oct. 27 from the Michigan Economic Development Corporation on the state's MEGA tax credit program, including program history, compliance procedures and financial estimates for remaining tax-credit liability.

The MEGA program, created in 1995 and administered through certificates issued by the Michigan Strategic Fund, provided refundable tax credits tied to job creation, capital investment and wages. Josh Hunt, with the MEDC, told the committee the program stopped issuing new agreements after 2011 and that credits are refundable'meaning the credit can reduce a company's tax liability below zero and result in a refund from the Department of Treasury.

Committee members pressed MEDC officials on program scale, the verification process and remaining liabilities. Kristen Armstrong, senior vice president for business development programs and execution at MEDC, described the agency's compliance unit and its audit routines, including a random-sample review of employee records to verify job counts, wages and, where applicable, employer-paid health benefits.

MEDC told the subcommittee it has certified that the program supported more than 63,000 new jobs and 184,000 retained jobs and that projects receiving MEGA credits secured more than…