Governor Gretchen Whitmer stood before Michigan lawmakers to present her seventh annual budget, a proposal that carries an $83.5 billion price tag, a 1.2% increase over current spending levels. The numbers alone are staggering, but the reality behind them is even more pressing. Federal funding makes up 42% of the Democratic governor’s recommendations, and with the Trump administration’s threats to freeze federal dollars, Michigan’s financial stability is in question. Whitmer is clear about her priorities: funding education, local municipalities, and economic development while proposing new revenue sources to keep essential programs afloat.
The budget includes a 4% increase in K-12 base funding and university operations, a $125 million commitment to expand career and technical education over the next five years, and a 3.6% increase in statutory revenue sharing to support Michigan’s cities and towns. There’s also a proposed $510 million in supplemental spending for the current fiscal year, aimed at shoring up key infrastructure and workforce initiatives. Budget Director Jen Flood emphasized that the plan is about “making a difference in real people’s lives.” That difference is being felt across education, workforce training, and public health investments. State funding for labor and economic opportunity would decline due to the loss of one-time funding, but new initiatives are in place to support students with disabilities, expand apprenticeships, and help small auto suppliers retool for a changing industry. An additional $36 million in federal funds would go toward a new apprenticeship program for energy industry workers, while $25 million in state funds is earmarked for employer-assisted housing. Federal dollars would also support Michigan’s small- and medium-sized auto suppliers in reconfiguring operations.
The budget also addresses Michigan’s Strategic Outreach and Attraction Reserve Fund (SOAR), which has funneled billions into business-attraction incentives but faces an uncertain future. Annual deposits of $500 million into SOAR are set to expire, and the budget does not explicitly extend them. Similarly, revitalization and placemaking grants administered by the Michigan Economic Development Corp. are absent from the proposal, though negotiations could bring them back into play. Regulatory oversight would expand, with Whitmer proposing additional staff for nursing home inspections and liquor control inventory management. Environmental record-keeping would receive a digital overhaul with a $39 million investment to modernize 4.25 billion pages of physical records that impact permitting processes. The administration claims this change will speed up approvals for businesses while improving government transparency.
Defense and infrastructure receive notable attention, including $26 million for improvements at the Selfridge Air National Guard Base and $25 million to eliminate obsolete arc wiring in Detroit’s streetlight system. A $2 million allocation would expand resources for dementia care and support, and an additional $50 million would be added to the general budget stabilization fund, bringing the “rainy day” balance to $2.3 billion. As the proposal moves through the House and Senate, Republican lawmakers are signaling a lengthy debate. House Speaker Matt Hall suggested the budget may not be finalized until late September, despite a legal deadline of July 1. Rep. Tim Kelly, chairing the subcommittee on school funding, raised concerns about rising education costs not translating into improved student outcomes. “The school aid fund has grown $1 billion a year while student achievement has dropped,” he noted. Flood responded that Michigan’s struggles mirror a national trend, adding that the budget includes incentives for schools to adopt best practices that drive improvement.
Whitmer’s education spending plan includes an increase of $392 per student, raising the minimum per-pupil allocation to $10,000. Cyber schools operating entirely online would receive a reduced allocation of $8,000 per student. An additional $94 million would go toward at-risk students, students with disabilities, and English language learners, while rural school districts would receive increased funding to account for logistical challenges. Early childhood education continues to be a priority, with increased investments in Pre-K for All and $25 million in startup grants for new providers. Parent transparency is a recurring theme in Whitmer’s education strategy. Schools serving kindergarten through fifth grade would be required to notify parents if they are not using an “evidence-based” curriculum. Districts would also need to provide reports on how state funds for at-risk students are being spent, show that dollars are going to the schools with the greatest need, and outline interventions that are actually backed by research. Schools that rank in the bottom 5% of academic performance would be required to inform parents and offer a plan for improvement, complete with a mechanism for parental feedback. Local school boards would have to publicly discuss academic outcomes and strategies for improving engagement, while districts would need to add a direct link to the state’s parent dashboard on their websites.
Beyond education, Whitmer is taking another swing at taxation policies aimed at revenue generation and public health. Her budget proposes a 32% tax on the wholesale price of vaping products and nicotine pouches, mirroring existing excise taxes on non-cigarette tobacco products. Revenue from the tax, estimated at $57 million annually, would be split between smoking prevention programs and Medicaid funding. This proposal aligns with efforts in 32 other states, though previous attempts to tax vaping products in Michigan have failed to gain traction. Environmental funding is also in focus. Whitmer is reviving efforts to raise landfill tipping fees to reduce out-of-state trash and fund contaminated site cleanup. She is again pushing to make the Recreation Passport fee an opt-out rather than opt-in feature during vehicle registration, an initiative expected to generate $21 million annually. Both proposals stalled in the Democratic-led Legislature last year, but Whitmer remains committed to their passage.
Whitmer’s commitment to workforce development continues with a $19 million expansion of registered apprenticeships, which currently serve nearly 20,000 Michigan workers. An additional $35.8 million is proposed to create an apprenticeship program focused on utility infrastructure and weatherization training, reinforcing Michigan’s push toward a more skilled labor force. What’s missing from this budget is any new road-funding plan, a longstanding issue in Michigan. Whitmer has hinted at a forthcoming proposal to address the state’s $3.9 billion road-funding shortfall, but details are yet to be unveiled. Senate Appropriations Committee Chair Sarah Anthony emphasized the need for a clear plan, stating, “Having a roads plan baked into the large budget presentation is helpful, so we can actually start getting some of these conversations and decisions at a formal negotiations standpoint.” House Speaker Matt Hall is advocating for a plan that reallocates existing funds rather than raising new taxes, setting up a likely clash between the administration and the Legislature.
The battle over Michigan’s budget is just beginning, but Whitmer has made it clear where she stands. Education, workforce development, and environmental sustainability are at the center of her vision, even as Republican lawmakers push back on key funding mechanisms. With control of the House now in GOP hands and the Senate still led by Democrats, the next several months will determine whether Michigan’s budget advances the state’s progress or gets mired in partisan gridlock. Either way, the stakes are high, and Michigan residents are watching closely.
About Post Author
