Wisconsin's job-creation agency reviewing 222 tax credits for possible overpayment

MADISON -- Wisconsin has handed out more than $400,000 to companies that didn't deserve it as part of a tax credit program, and the full scope of the overpayments is likely to reach several million dollars.

The Wisconsin Economic Development Corporation is reviewing 222 tax credits awarded since 2006 to companies for job creation. The first 18 awards reviewed show an average overpayment of $24,926 per award.

"It absolutely has to get cleaned up," said Assembly Democratic leader Peter Barca, who also sits on WEDC's board. "I`m not certain that it is, in fact, restricted to these (222) companies, either."

Concerns about overpayments first surfaced in April. Mark Hogan, WEDC's chief executive, released a preliminary report last week that showed the findings so far.

The state made $448,674 in overpayments to the first 18 award recipients, the preliminary review found. According to the review, the state also underpaid certain recipients by $36,479.

The tax credits are designed for companies that create or retain jobs in Wisconsin. Hogan said the most common reason for overpayments was how mid-year hires were counted in the verification process.

Hogan said WEDC would work with the companies to offset, or reduce, future awards to balance out the overpayments.

"WEDC's goal is to continuously improve as stewards of tax payer dollars and we are proactively reviewing and transparently self-identifying any adjustments to past verifications," said Steve Michaels, a spokesman for the agency.

The problem dates back to the old Department of Commerce under former Gov. Jim Doyle, a Democrat. Gov. Scott Walker and the Republican-controlled Legislature replaced Commerce with WEDC in 2011.

The overpayments mark the latest issue for the embattled WEDC, which has been the focus of scathing audits that showed a lack of oversight at the agency.

Republicans said it was a positive sign that WEDC was self-reporting the overpayments. The agency's officials expect to have a full report by August.

"I`m really happy that WEDC brought this to light," said state Rep. Samantha Kerkman, R-Salem. "Several audits later, they’re starting to verify – as they should’ve done all along the way."

Assembly Speaker Robin Vos said he expected the agency to recoup the money.

"Of course we want to guarantee that only the amount of money that was promised was paid out," Vos said. "I think it’s a good idea to go back and review them to make sure there were no mistakes."

Barca, who has pushed for changes at WEDC, said he wasn't sure the agency was improving.

"To be frank, I could not say at this juncture -- even as a board member," Barca said.