Great Lakes Wire

Governor Gretchen Whitmer signed an $81 billion budget for Michigan’s 2026 fiscal year on Tuesday. The signing took place behind closed doors in her ceremonial office, attended by the four legislative leaders who negotiated the final agreement.

The budget includes 14 bills related to a $1.85 billion road funding package and other changes. The omnibus bill, HB 4706, and the School Bus bill, SB 166, were also signed, along with the Natural Resources Trust Fund projects. According to the Governor’s office, the number of bills signed on Tuesday matched the total signed in the previous nine months.

A key focus of the budget is the elimination of state taxes on tips, overtime pay, and Social Security income. The Governor’s office said these measures will save “hundreds of thousands” of seniors and working families on their taxes. The messaging also highlighted the phase-in of the Earned Income Tax Credit (EITC) increase and the retirement income tax exemption, both of which were passed in earlier budgets.

“This balanced budget delivers on the kitchen table issues that make a real difference in people’s lives,” Whitmer said in a statement. “Our budget fixes the damn roads, cuts taxes for seniors and working families, funds first responders, secures core health care services that millions of Michiganders rely on, protects our air, lakes, and land, and increases government efficiency to saves taxpayers time and money.”

Democratic lawmakers noted that changes to the state’s Medicaid taxing system will allow Michigan to continue collecting federal matching funds despite reforms in the budget. The budget also maintains free school lunch and breakfast programs and provides checks and monthly stipends to pregnant women and their infants during the first year of life.

Republicans and the Governor both emphasized the $1.85 billion road funding plan, as well as the elimination of 1,800 state employee positions and the defunding of the Strategic Outreach and Attraction Fund (SOAR) Fund.

The bill signing was not open to the press. Speaker Matt Hall (R-Richland Township) commented afterward, “there were people in the bill signing that should not have been in the bill signing, and then there were people that were not at the bill signing that should have been there.”

Hall also said he believes there are an additional 3,000 “ghost employees” that could be eliminated next year. He stated that if the Fiscal Year 2027 budget is expected earlier than FY 2026, more such positions need to be identified.

Hall pointed out that earmarks in this year’s budget have been reduced to $168 million from last year’s $1.3 billion. He said Democrats had to choose between discretionary spending and maintaining programs under Whitmer’s administration for another year. He used the Arts Council as an example, suggesting its funding may end in the future as part of efforts to reduce spending and prevent “waste, fraud and abuse.”

“I know the Democrats, OK? And what I’ll tell you is, the Democrats will spend every dollar available if you let them, and we wouldn’t let them in the negotiations,” Hall said.

No line-item vetoes were recorded by the Office of the Great Seal for either budget.

“I’m so grateful to legislators on both sides of the aisle for coming together to get this done,” Whitmer said. “Amidst so much uncertainty caused by a chaotic tariff strategy and a national government shutdown, Michigan is showing everyone how to get things done. In the weeks and months ahead, we will build on this momentum and come together on commonsense tools to create and retain good-paying jobs.”

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