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State lawmakers worked into the early-morning hours of Friday to pass Michigan’s long-overdue $81 billion state budget.
This year’s budget is approximately $1 billion smaller than last year’s, reflecting a push by lawmakers to reduce wasteful government spending.
As part of that effort, the legislature voted to eliminate 2,000 “ghost” state positions to reduce unnecessary costs. These jobs were funded but rarely filled.
Key highlights of the budget include:
- Increased school funding: Per-pupil funding for Michigan schools will rise by $442, bringing the total to $10,050 per student.
- Public safety boost: $95 million from the new Public Safety Trust Fund will be allocated directly to local law enforcement agencies to enhance police presence on the streets.
- Infrastructure investment: $2 billion will go toward repairing roads and bridges across the state, a $1 billion increase from the previous budget. This is partially funded by a 24% increase in the marijuana tax.
- Gas tax restructure: The current 6% sales tax on gasoline will change with a 20-cent increase to the existing 31-cent gas tax. This shift will divert revenue away from the School Aid Fund, which traditionally supports K-12 education and local governments.
- Higher education funding shift: About $1.3 billion will be redirected from the School Aid Fund to community colleges and public universities, a 41% increase from the previous $922 million. Michigan’s 15 public universities will see funding increases ranging from 1.9% to 4.8%.
- Tax relief for working families and seniors: The budget eliminates taxes on tips, overtime pay, and Social Security income, providing targeted relief to low- and middle-income workers and retirees.
Governor Gretchen Whitmer released a statement early Friday morning praising the bipartisan effort:
“Today’s balanced, bipartisan budget is a big win for Michiganders. We brought members on both sides of the aisle together to provide tax breaks to seniors and working families, protect access to affordable health care, feed every child free meals at school, help our students succeed academically, and ensure Michiganders are safe in their communities.” Whitmer said in a release.
One of the more debated provisions was the marijuana tax hike, which passed narrowly in the Senate by a 19–17 vote. Lawmakers estimate the increase will generate approximately $420 million in additional revenue.
Lawmakers estimate the increase will generate approximately $420 million in additional revenue.
“This budget delivers on the promises we made to Michigan families: less waste, lower taxes, and stronger schools,” said State Rep. Jason Woolford (R-Howell). “This plan reflects the values of Michigan residents by returning more money to taxpayers, protecting seniors, supporting local schools, and strengthening Michigan’s defense presence at Selfridge Air National Guard Base.
Both chambers were working into the early-morning hours with the House adjourning just before 4:20 a.m. Friday.
“This budget shows that we can work together across party lines and deliver for the people of Michigan,” said Sen. Sarah Anthony (D-Lansing). “This budget keeps people front and center by protecting health care access, investing in our schools, and making everyday life more affordable. It also proves that we can come together, even when it’s tough, to deliver a responsible, balanced plan that meets today’s needs and keeps our state moving forward.”
The bills are now headed to Governor Gretchen Whitmer’s desk for her signature.