Michigan House Tax Policy Committee members today voted unanimously in favor of legislation to protect taxpayers from additional financial liability through Michigan Economic Growth Authority (MEGA) tax credit extensions.
The committee includes state Rep. Gary Glenn, R-Midland, who introduced House Bill 4334 to prohibit extensions currently allowed under the Michigan Business Tax Act. The committee also approved HB 4333, which addresses similar language in the Michigan Economic Growth Authority Act.
“The MEGA credits and program expansion did what was intended at a time when Michigan was struggling through the recession by retaining the key industries and jobs that are now helping our state lead the nation’s economic rebound,” Rep. Glenn said. “While those past financial commitments can be honored with gratitude we must now look to ensure a fiscally responsible and realistic future that is stable and sustainable for Michigan taxpayers.”
The MEGA tax credits were greatly expanded in 2008, and even though the program was ended by the Republican-led Legislature and Gov. Rick Snyder in 2011, there is a taxpayer liability of $9.38 billion projected over the next 17 years, including a $325 million state obligation this budget year.
Current state law allows the existing credits to be increased and extended further, but the legislation approved today by the committee will freeze the existing program and its credit liabilities.
HB 4333-4334 now go to the full House for consideration.