Gretchen Whitmer, Governor | Official Website
Gretchen Whitmer, Governor | Official Website
After a period of negotiation that extended beyond the start of the new fiscal year, Michigan lawmakers have approved the state budget for 2025-2026. The agreement, reached between House Republicans, Senate Democrats, and Governor Gretchen Whitmer, includes $1.8 billion in ongoing road funding.
On October 1, 2025, the legislature passed a continuation budget to keep state government operations running until October 8. The Governor emphasized that sustained road funding was essential to any final budget deal and, together with the Senate Majority Leader, insisted on securing new revenue sources rather than relying solely on spending cuts.
The total spending plan is close to $81 billion. This figure includes about $5 billion in Medicaid provider tax revenue that has been moved into contingency funds and incorporates the increased allocation for roads. The approved budget is less than last year's $82.5 billion budget signed by Governor Whitmer and below the $84.5 billion proposed by Senate Democrats but exceeds the $78.5 billion put forward by House Republicans.
Among the key features of this year's budget are increased transparency measures for legislative earmarks or special project requests. For the first time, House Republicans have published these requests publicly, and new rules adopted by the Senate will extend this practice there as well. All State House project requests can be accessed on their official website.
Other notable provisions include significant reductions to the Michigan Economic Development Corporation (MEDC), including ending funding for the Strategic Outreach and Attraction Reserve (SOAR) fund; a requirement that state buildings maintain at least an 80% occupancy rate or face sale; and elimination of more than 1,700 unfilled full-time government positions known as "ghost employees." Proposals from Governor Whitmer to raise fees for trash and hazardous waste dumping were not included in this budget.
K-12 per-pupil funding has been raised from $9,608 to $10,050. Community colleges received modest increases in funding while most universities saw small bumps except for University of Michigan and Michigan State University, which each received only a 2% increase. Revenue sharing with local governments remains unchanged.
Additional information about this year’s budget is available through the State Budget Office.
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