A new report by the Connecticut Auditors of Public Accounts credits Department of Economic and Community Development (DECD) officials with implementing 77% of prior audit recommendations related to Media Tax Credits, which they say will “strengthen several administrative controls.”
The August 11, 2026 Performance Audit Compliance Report follows up on a January 10, 2024, Media Tax Credit Performance Audit and lists implemented and partially implemented improvements to segregation of duties, policies and procedures for internal controls and compliance, data collection, and alignment with relevant law.
Auditors also made note of three “not implemented” recommendations, including one suggesting that DECD regulations are not being made consistent with state statute in a timely manner. Agency officials simply responded, “DECD has not updated its regulations,” in response to auditors’ 2024 recommendation that they “establish a process to ensure regulations are promptly updated.”
Another “not implemented” finding shows that DECD does not have an agreement with the Department of Revenue Services (DRS) that would allow them to “obtain data necessary for reconciliation of individual credit vouchers with state tax credits.”
DECD’s administration of Media Tax Credits has faced years of scrutiny by auditors and the public for millions in improperly awarded tax credits, concerns as to whether the credits are a net benefit to state coffers, and questions of efficacy most of the tax credits are claimed by insurance companies. Reports issued by DECD officials up to 2019 indicated the credits were a net loss for the state and, despite lawmakers’ intent, have created few jobs.
According to DECD’s own reporting, the film tax credit program amounts to a net loss of nearly $60 million in total state tax revenue each year. Speaking to members of the state legislature in 2022, DECD Commissioner David Lehman argued that lawmakers might want to trim back the program to reduce the burden on taxpayers.
In 2023, advocates in the film and media industry lobbied to increase the amount of credit which could be claimed when used against the productions Connecticut sales tax costs. That legislation, House Bill 6929, failed to become law.
The controversy has only grown as newer data has revealed that more than $57 million, nearly 84%, of tax credits have been claimed by insurance companies, and public transparency has been lacking in the name of protecting “trade secrets.”
Auditors cautioned that the 77% implementation rate is “solely based” on DECD officials’ responses and will be verified during the next department audit.
Connecticut’s media tax credits were recently updated to allow for additional credits if a company films in Hartford, Bridgeport, or New Haven.
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