Inside 208

Governor Whitmer presented her budget recommendation for fiscal year 2026. The budget proposal totals $83.5 billion, including a general fund total of $15.3 billion and a school aid budget totaling $21.2 billion. The budget also includes $34.8 billion in federal funds, representing 41.7% of the total budget for FY26.

The budget presentation focused on six key areas.

• Lowering Cost
• Creating Jobs
• Getting SMART on Education
• Supporting Seniors
• Protecting and Defending Michiganders
• Making Government Work Better

There are a few items to highlight for local government, but with covid-era dollars coming to an end, there are fewer one-time investment than previous years.

• 4% ongoing increase in statutory revenue sharing totaling $22.7 million
• $25.7 million increase in constitutional revenue sharing
• $75 million for a Public Safety Trust Fund to address violent crime prevention
• $80 million to protect clean drinking water, including grants and low-interest loans to local communities to replace lead service lines, install stormwater management systems, and upgrade water infrastructure
• $25 million to expand the existing employer assisted housing pilot program—leveraging investments from employers to fund a range of affordable housing projects
• $3 million to support rural communities through rural prosperity grants and expansion of the Rural Development Grant Program
• $10 million to grow Michigan’s population by retaining and attracting talent with strategic pilots and public engagement efforts, supporting a successful program to reverse population growth trends

There has been a lot of talk lately about finding a long-term funding solution for our transportation system. The Governor’s proposed budget includes the following investments.

• $4.9 billion in total road funding, including federal, state and restricted funds.
  • $112.2 million in general fund dollars to ensure Michigan matches all $1.8 billion in federal highway aid
  • $98.9 million in new revenue to improve state and local roads, highways, and bridges across the state
  • $767 million in total ongoing support for transit and rail programs
  • $7.8 million to fund a study and pilot program of potential road usage charge options
  • $10 million to install electric vehicle charging stations across the state
• This proposal only includes new revenue generated from an increase in collections from gas tax and registration fees. During the presentation it was stated that the Governor will be announcing a new transportation funding proposal next week. We will be tracking that closely and provide details when it is announced.

A copy of the budget presentation can be found here.

A detailed breakdown of the budget and briefing papers can be found here.

It is important to remember that this is just the first step in the process. In the coming weeks, both the House and Senate will begin to work on their own budgets, and they will likely look very different than what the Governor has proposed. In May, the next consensus revenue estimating conference with take place, and those fiscal projections will inform the final negotiations between the Governor, Seante, and House. In past years, the budget has been completed by June 30, but with split power, the final budget may not be complete until the constitutional deadline of September 30.

John LaMacchia is the League’s director of state & federal affairs. He can be reached at [email protected] or 517-908-0303.