Panel hears House Fiscal Agency briefing on MEGA tax credits, $9.4 billion liability and verification gaps

The House Oversight Subcommittee on Corporate Subsidies and State Investments heard a briefing from Ben Gilchick, Associate Director of the House Fiscal Agency, on the history, mechanics and fiscal impact of the Michigan Economic Growth Authority (MEGA) refundable tax-credit program.

Gilchick told the committee that MEGA was created in 1995 to attract and retain jobs and investment, that credits were refundable and performance‑based, and that the program was discontinued in 2011 when the Michigan Business Tax (MBT) was replaced by the corporate income tax. “Our overarching mission is to provide objective, nonpartisan expertise to the House of Representatives on legislative fiscal matters,” Gilchick said as he opened the presentation.

The briefing laid out the program’s structure and the scope of its remaining fiscal exposure. According to House Fiscal Agency materials cited by Gilchick, approximately $9.4 billion represents the total value awarded over the life of MEGA agreements (looking backward and forward); the report also shows roughly $3.0 billion in remaining outstanding certificate value the state expects to certify in coming years. Certificates are issued by year of company activity and generally affect state revenues on a roughly two‑year lag, Gilchick said, and no credits will be earned beyond fiscal year 2030 with redemptions expected to cease affecting revenues by fiscal year 2032.

Why it matters: MEGA credits reduce net business tax revenue when refunds exceed tax owed, and large, multi‑year credits can complicate…