An audit of many of the $35 billion worth of tax incentives given out by the state of Michigan each year concludes that many of those credits do not result in the promised number of jobs created or money invested — and that the state has no effective system for auditing those giveaways to see if they did or not. The Detroit News reports:
Some companies given millions of dollars in Michigan tax credits to create jobs or invest in the state didn’t always live up to their agreements on how much they would pay workers and other requirements, according to an audit released today.
The report by the state’s auditor general also said the Michigan Strategic Fund, which oversees tax credits awarded by the Michigan Economic Growth Authority board, didn’t have the right procedures to check whether companies were doing what they needed to do to win the credits.
To get the multiyear credits, companies must agree to create or retain a certain number of jobs, pay workers an agreed-on weekly rate and make capital investments in Michigan. But the report said workers at the fund too often accepted incomplete reports and the companies’ word they had complied.
Meanwhile, the Michigan League of Human Services put out a report (PDF) on those tax expenditures reaching the same conclusion. That report included the startling statistic that the state brought in a total of $22.7 billion in taxes in 2009 — and gave away $35.4 billion in tax breaks.