Governor’s Executive Budget Recommendation Presented to the Legislature

Governor’s Executive Budget Recommendation Presented to the Legislature
By: John LaMacchia, February 11, 2026

Governor Gretchen Whitmer’s eighth and final executive budget recommendation was presented today (2/11) by State Budget Director Jen Flood. The recommendation totals $88.1 billion, including a general fund total of $13.6 billion and a school aid budget totaling $21.4 billion.

There are significant pressures on this year’s budget that are creating a $1.8B gap in funding. To address these pressures, the governor is proposing a three-part strategy to address this gap.

$630M in reductions, efficiencies and redirection of existing revenue.
$400M in reserves from the state’s rainy day fund.
$780M in new revenue.

In the face of ongoing budget pressures, it remains imperative that local governments receive stable and predictable funding from the state as they work to provide essential services. This budget proposal holds statutory revenue sharing harmless for cities, villages, and townships, maintaining funding at the current level of $333 million. Constitutional revenue sharing is projected at approximately $1.045 billion.

While overall sales tax collections — which fund constitutional revenue sharing — are increasing, the total available for distribution is lower than it otherwise would have been due to changes enacted last year as part of the road funding plan. Treasury has released updated projections which are available here.

The Governor is also proposing an ongoing tax credit to provide property tax relief for seniors. This represents the first substantive policy proposal related to property tax reform and is likely to shape future discussions. Importantly, the proposal would not impact local budgets and would be funded by the state.

The release of the Governor’s budget marks only the first step in the process. Both the House and Senate will put forward their own proposals, and negotiations will ultimately determine the final outcome. We will remain actively engaged throughout the process and provide timely updates as it unfolds.

Further information about the governor’s budget proposal can be found in the materials posted on the State Budget Office website and the following links:

Below are several funding highlights provided by the state budget office.

Saving Michiganders Money 

Providing property tax relief to 335,000 seniors, saving households an average of $345 a year through an expanded tax credit that refunds approximately 10% of their property taxes.

Establishing a “back to school” sales tax holiday, saving families money as they shop for school supplies, clothes, and certain electronics.

Continuing the Working Families Tax Credit, sending an average of nearly $3,900 in tax relief to 665,000 families.

Rolling back the retirement tax completely, saving 500,000 seniors an average of $1,000 a year.

Continuing tax exemptions on:

Tips (saving 300,000 workers $400 a year),
Overtime (saving 500,000 workers $500 a year),
Social Security (saving 40,000 seniors $500 a year).

Continuing free school meals for all 1.4 million public school students, saving families around $1,000 per year, per child, and valuable time every morning. The budget recommendation also proposes making free school meals permanent in state law.

Every Kid Reads, Eats, and Succeeds 

Literacy

$625 million to support student literacy and achievement, the largest one-time literacy investment ever, including starting early, training teachers, adopting proven curriculum, and getting kids the extra help they need:

$181.1 million to make free pre-K for all available to an estimated 68,000 children through the Great Start Readiness program, saving families $14,000 per year.

$135 million to support students and parents with expanded before- and after-school programming.

$100 million for high-impact tutoring to provide students with individualized, structured, evidence-based interventions, helping them catch up and get back on track.

$100 million to provide grants to school districts, helping them purchase and implement high-quality literacy programs.

$50 million to continue implementing LETRS training, which trains educators in the “science of reading”—including strategies like phonics— as an instructional method for use in classrooms statewide.

$33 million to fund regional support for families of young children and expand the Michigan Learning Channel.

$10.5 million to hire additional regional literacy coaches who assist teachers in developing and implementing instructional strategies for pupils in grades pre-K to 5. With this increase, total funding for literacy coaches is $52.5 million which supports 420 coaches across the state, an increase of 327 coaches since the Governor took office.

$7.6 million to support Literacy Essentials and comprehensive professional learning about the science of reading for educators at all grade levels.

$7.6 million to support adult education and help more Michiganders get good-paying jobs.

K-12 Education

$325 million to support school operations through a 2.5% increase in base per-pupil funding—an additional $250 per student, for a total of $10,300 per pupil. The per-pupil funding recommendation represents a 31% increase since the Governor took office. These funds are invested into every student, in every school, to lower class sizes, buy new textbooks, and install the latest equipment in classrooms and science labs.

$200 million to continue free school meals for all 1.4 million public school students, saving families around $1,000 per year, per child, and valuable time every morning. The budget recommendation also proposes making free school meals permanent in state law.

This line item is also included above, in the Saving Michiganders Money Plan.

$123 million to continue expanded support for special education students – a 7.3% increase in the state allocation.

$90 million, a 6% increase, to provide an increase in funding to support academically at-risk students, English language learners, career and technical education students, and students in rural school districts.

$300 million to support student wellness through continuation of mental health and safety grants to districts. The recommendation represents a twelvefold increase in mental health and safety funding since the Governor took office.

$125 million to reimburse districts with exorbitant transportation costs, allowing them to devote more resources to the classroom.

$30 million to support early learning partnerships, ensuring students and families access to high-quality early learning and updated GSRP programs statewide.

$20 million to reimburse eligible districts for dual enrollment costs, incentivizing districts to encourage more students to pursue college credit while still in high school.

$1.5 million increase for Early On services, bringing total funding to $25.1 million. Early On is Michigan’s system that connects families of infants and toddlers from birth to age three who have, or are at risk for, developmental delays or disabilities with coordinated social, health, and educational services to support early development.

Higher Education 

$2.2 billion to sustain university and community college operations—advancing Michigan’s Sixty by 30 goal of having 60% of working adults with a degree or skills certificate by 2030.

$532 million, and more than $1.8 billion to date, for the Michigan Achievement Scholarship, which provides a tuition free pathway for full-time community college students through the community college guarantee, and up to $27,500 for full-time students at public or private 4-year universities. More than 106,300 students have been awarded the Michigan Achievement Scholarship since its inception in 2024, and 128,000 students are expected to benefit each year once the program is fully implemented.

$67 million to expand Michigan Reconnect to adult learners ages 21 and older, giving adult learners a tuition-free pathway to earn an associate degree or skilled trades certificate. More than 66,500 students have enrolled in community college with Michigan Reconnect since it was created in 2021.
$60 million for ITEMS funding to support infrastructure, technology, equipment, maintenance, and safety improvements at the state’s community colleges and public universities.

Protecting Medicaid 

$780.4 million to stabilize Medicaid funding, protecting access to health care for eligible Michiganders through revenue generated from a mix of funding mechanisms, including:

$232 million from bringing Michigan’s tobacco tax rate in line with other Great Lakes states.

$73.6 million from taxing vaping and non-tobacco nicotine products similarly to other tobacco products.

$282 million from a tax on digital advertising across all media platforms.

$192.8 million from updating the state’s internet gaming, sports betting, and online gaming tax structure.

$150 million in efficiency savings identified in collaboration with stakeholders to address costs, accountability and resource effectiveness while maintaining sustainability of services.

Implementing H.R. 1 (One Big Beautiful Bill Act)

$186.6 million to prepare our state to meet new, burdensome federal requirements that make it harder to access food and health care:

$94.3 million in increased SNAP administrative cost-sharing, which increased from 50% to 75%.

$60.3 million for staffing, administration, and implementation oversight efforts to comply with new federal requirements and support beneficiaries.

$30 million in workforce investments to help Michiganders maintain access to healthcare and SNAP, including $25 million for workforce training and $5 million to expand registered apprenticeship opportunities.

$2 million to create a data-sharing platform to meet new federal H.R.1 requirements for Medicaid and SNAP while streamlining verification and ensuring efficient compliance.

Supporting Healthy Communities 

$351.8 million to preserve and raise direct care worker wages, consistent with the Jan. 1, 2027 and prior year statewide minimum wage increases and provide paid sick leave.

$21.4 million directed to cancer prevention, smoking and vaping cessation, and mental/behavioral health support for Michigan children through the Healthy Michigan Fund from a portion of vape tax revenues.

$72.2 million to expand behavioral health care and capacity through the new state psychiatric hospital, which is anticipated to open in October.

$20 million in ongoing TANF funding to continue support for Rx Kids, ensuring families have the care and stability they need during the critical early stages of life. Rx Kids has helped more than 4,290 babies and their families since 2024. In total, $286.5 million in state funds have been invested in RX Kids since 2024.

$116.2 million in funding to continue the Healthy Moms, Healthy Babies program which helps new and expectant mothers receive the care they need and reduce racial disparities in infant and maternal mortality. The program has supported more than 313,100 families since 2020.

$30 million in continued funding to support crime victims in light of declining federal funds.

$10 million to support nursing home staffing and improve care for nursing home residents.

$2 million investment in the autism navigator program to help individuals with autism and their families.

Fixing Michigan’s Roads 

$5.8 billion for roads, to save drivers time behind the wheel and money on repairs, while also supporting an estimated 30,500 good-paying construction jobs annually.

$1.6 billion in new sustainable funding to improve state and local roads; funding will be $2 billion annually when fully implemented in FY30.

$100 million to repair and replace local bridges.

$100 million for public transit, including new transformational projects and local bus operations.

$40 million for rail grade separation projects to improve safety and reduce traffic congestion.

$481 million increase for roads and bridges, with more than two-thirds supporting local roads.

$130.8 million increase in state and federal support for transit and rail programs, including a $43.4 million increase in Local Bus Operating assistance for local transit agencies. This adds to the $44.9 million FY26 increase for Local Bus Operating approved last fall, for a total of $315 million – a combined 39% increase.

Creating Jobs & Growing the Economy 

Growing Our Economy

$150 million to invest in public infrastructure and prepare sites in Michigan for future development or redevelopment, creating a statewide inventory of development-ready sites to attract investment and create jobs.

$59.4 million to continue business attraction and community revitalization programs to incentivize job creation, investment and revitalize blighted properties. In addition, $15.7 million in continued funding supports entrepreneurship programming across the state.

Since 2019, $476.7 million for business attraction and revitalization efforts have supported 22,300 projected jobs and leveraged nearly $9.8 billion in private investment across Michigan communities.

$100 million in total investments in entrepreneurs and innovators since 2019 has spurred $12.6 billion in new industry investment and advanced Michigan’s position in key sectors.

$16 million in continued funding for the Pure Michigan campaign, which fuels tourism, supports local businesses, and strengthens Michigan’s economy. The Pure Michigan campaign has generated an estimated $9.9 billion in ad-influenced visitor spending across the state since 2019.

$6 million to promote Michigan as a destination for special events, including national conventions, conferences, major sporting competitions or other significant events that feature Michigan to a national audience.

$5.3 million to coordinate port activity, administer grants, and position Michigan to attract federal and private investment through the establishment of a Maritime and Port Facility Office.

$2.3 million for the Office of Rural Prosperity to support economic growth and infrastructure projects in rural communities.

$4 million for the Rural Development Fund Grant Program to expand grant opportunities that enhance rural community infrastructure.

High-Tech Jobs

$8 million to support Michigan science, technology, engineering, and mathematics (MiSTEM) programs which will increase the number of students who are college- and career-ready upon high school graduation and promote degree attainment in STEM fields.

$5 million investment supporting the Office of Future Mobility and Electrification, advancing aviation and drone initiatives that drive innovation, economic growth, and workforce development.

$5 million to grow the maritime manufacturing sector and strengthen the state’s defense industry, creating good-paying jobs, fostering innovation, and attracting new investment.

$5 million to support the Michigan Office of Defense and Aerospace Innovation, advancing programs that foster innovation, create jobs, and grow Michigan’s defense and aerospace industries.

Workforce Development

$429.1 million in continued funding for workforce development programs and grants, including training opportunities for youth, dislocated workers, and underserved populations, to build pathways into good-paying jobs.

Since 2019, these workforce development programs and grants have provided training and career services to more than 827,000 Michiganders.

Since 2019, $93 million has helped more than 45,000 workers gain skills through apprenticeships and training programs.

$155.2 million in continued support for Michigan Rehabilitation Services, to help individuals with disabilities prepare for, obtain, and maintain employment.

Since 2019, Michigan Rehabilitation Services has supported more than 105,000 individuals with disabilities in securing or retaining employment.

$2.3 million to continue the Community and Worker Economic Transition program, assisting workers and businesses affected by industry shifts to connect with retraining, job placement, and economic transition resources.

Vibrant Communities

$50 million for the Michigan Housing and Community Development Fund to continue supporting the affordable housing needs of low-income households and revitalization of neighborhoods and downtowns. The budget recommendation also proposes statutory changes to be more flexible and responsive to the housing needs facing Michigan communities. These changes will allow the $50 million ongoing investment to be used for a broader range of projects including neighborhood revitalization and infill housing development and better meet the acute housing needs facing the state. MSHDA has invested over $9.7 billion in 67,220 housing units since FY20.

$10 million increase to support arts and cultural institutions that make Michigan communities unique and desirable places to work, live and raise a family. Since 2019, $82 million has helped just over 1,580 arts and cultural organizations host events, exhibitions and programs, enriching communities across Michigan.

$1.5 million to preserve and enhance Michigan’s designated museums, ensuring educational opportunities and public access to the state’s cultural and historical treasures.

$750,000 for the Rural Heritage Partnership Program, which repairs and improves qualified historic buildings in small, rural communities statewide.

Keeping Communities Safe

Protecting Public Safety

$1.7 billion to sustain revenue sharing to help counties, cities, villages, and townships ensure public safety and improve the quality of life for residents.

$85 million for offender success services, programming, and education to foster offenders’ personal success, contribute to a safer prison environment, and maintain successful reintegration into the community.

$50 million to fund public safety revenue sharing grants to counties, cities, villages, and townships to enhance public safety and prevent violent crime.

$20.4 million support trial court programs that aim to address the underlying substance or mental health issues that contribute to criminal behavior by focusing on treatment and supervision as an alternative to incarceration.

$13.3 million to support in-service training for more than 18,700 law enforcement officers.

$6.7 million increase for Michigan’s Public Safety Communications System, which keeps more than 2,630 public safety agencies across the state connected.

$2.5 million to continue the work of the statewide gun violence prevention task force focused on safety and prevention.

$1.9 million to maintain the Victim Support Program, which supports victims early in their interactions with the criminal justice system while also building partnerships with community organizations in support of victim advocacy. The Victim Support Program has served more than 4,600 individuals since the program began in 2020.

$1.7 million to support the OK2Say student safety program, which allows people to confidentially report potential harm or criminal activities directed at students, school employees, and schools.

$509,000 in continued support for firefighter training grants, helping local fire departments improve safety and emergency response through professional training.

Veteran and National Guard Support

$109.3 million to operate Michigan’s veteran homes, which provide comprehensive care for veterans and eligible family members.

$11.2 million to the Michigan National Guard Member Benefit Fund, which expands existing resources for the National Guard Tuition Assistance Program to include support for the new childcare and health care programs supporting National Guard members.

$4.3 million in support of county veteran service grants, strengthening local veteran services and ensuring equitable access to benefits across Michigan.

Safeguarding Our Air, Land and Water

$42.4 million for drinking water and environmental health programs to safeguard public health. Since 2019, $21.3 million has supported initiatives that monitor water quality.

$29.4 million to update and maintain the Michigan Department of Natural Resource’s fisheries system, invasive species controls, and expand outdoor access.

$24.6 million investment in off-road trails improvements, and harbor and waterway upgrades and development.

$80 million to clean up contaminated sites and deposit funds in the Renew Michigan Fund, bringing Michigan in line with other Midwest states when it comes to out-of-state trash haulers.

$11 million for environmental stewardship through the Michigan Agriculture Environmental Assurance Program to promote sustainable farming practices. Since 2019, $50.9 million has helped 2,663 farms adopt sustainable practices that protect soil, water, and natural resources.

$7.8 million for the qualified forest program to encourage private forestland stewardship and keep land in active use. Since 2019, $9.3 million has funded initiatives that promote private forest stewardship, preserving 448,522 acres of Michigan forests and supporting long-term land productivity.

$7.3 million for the Water Resource Division to expand oversight and monitoring of Michigan’s waterways and water infrastructure.

$6.5 million to acquire property in the Upper Peninsula, preserving 22,649 acres of forestlands in the Keweenaw Heartlands as a public resource.

$3 million for local conservation districts, supporting technical assistance and conservation programs in communities. Since 2019, $11.8 million has supported local conservation districts, providing technical assistance and conservation programs to every Michigan county.

$2 million to identify vulnerable communities and support local adaptation strategies to reduce risk and costs.

$1.9 million for agriculture preservation easement grants to protect farmland. Since 2019, $10.6 million has supported agriculture preservation easement grants, protecting 2,634 acres of farmland and helping sustain Michigan’s agricultural economy.
$5 million to support the Double Up Food Bucks program, helping families purchase fresh, nutritious foods and strengthen local food systems. Since 2019, $19.8 million has supported families purchasing fresh, nutritious foods and strengthening local food systems.

Effective & Efficient State Government 

$35 million for continued investment in the Information Technology Investment Fund (ITIF) to modernize state systems and improve service delivery. Proposed FY27 projects include upgrades to business and special tax collections, natural resources asset management, pesticide regulation and licensing, and systems needed to implement federal H.R. 1 Medicaid and SNAP requirements.

$17.3 million for the statewide judicial case management system, including a $2 million increase, as trial courts continue to join the system, bringing greater efficiency to court operations. Currently, 275 of 302 trial courts are actively using, or transitioning to, the system.

$18.8 million for the Department of Civil Rights to continue investigations into discrimination complaints. More than 12,000 civil rights complaints have been investigated and resolved since 2019.

$43.2 million to strengthen the Election Equipment Reserve Fund—enabling local election

administration and lifecycle maintenance of election equipment.

$1 million to enhance the representation of residential utility customers before the Michigan Public Service Commission.

$509,000 to enhance the state’s firefighter training and storage tank safety inspection programs.

$491,100 to enhance financial oversight and accountability over LARA program areas through a new internal Compliance and Risk Management section within the department.

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

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