Proposed Budget Highlights
The governor’s budget recommendation is focused on fiscal responsibility and long-term priorities to improve student literacy; grow and diversify the economy; protect access to quality, affordable healthcare; lower costs; and protect public safety. The governor noted the state is facing headwinds, including reduced federal revenue, rising healthcare costs, high tariffs, and changing national policy. Highlights of the budget include:
Saving Michiganders Money
- Provides property tax relief to 335,000 seniors through an expanded tax credit that refunds approximately 10 percent of their property taxes, establishes a “back to school” sales tax holiday, continues the Working Families Tax Credit, and rolls back the retirement tax completely.
Every Kid Reads, Eats, and Succeeds
- Literacy: Continues investments in universal pre-K program to serve an estimated 68,000 children; expand before- and after-school programming; provide high-impact tutoring; train educators in the “science of reading”; fund regional support for families of young children; hire additional regional literacy coaches; support Literacy Essentials; and support adult education.
- K-12 Education: Invests in school operations through a 2.5 percent increase in base per-pupil funding; continuing free school meals; expanded support for special education students; a 6 percent increase in funding for academically at-risk students; mental health and safety grants to districts; reimbursing districts for transportation costs; supporting early learning partnerships; and reimbursing districts for dual enrollment costs.
- Higher Education: Advances Michigan’s goal of having 60 percent of working adults with degrees or skill certificates by 2030; funds the Michigan Advancement Scholarship, which provides a tuition free pathway for full-time community college students; expands Michigan Reconnect to adult learners 21 and older; and invests in infrastructure and technology improvements at community colleges.
Protecting Medicaid and Healthcare
- Protecting Medicaid
- Stabilizes Medicaid funding, protecting access through revenue generated from a mix of funding mechanisms including increasing Michigan’s tobacco tax rate; taxing vaping and non-tobacco nicotine products similar to other tobacco products; a tax on digital advertising; and updating the state’s internet gaming, sports betting, and online gaming tax structure. Also provides savings through efficiencies identified in collaboration with stakeholders.
- Implementing the One Big Beautiful Bill Act (OBBBA)
- Prepares the state to meet new federal requirements through providing state funding for the increase in SNAP administrative cost-sharing; staffing, administration, and implementation oversight; workforce investments to help Michiganders maintain access to healthcare and SNAP; and creating a data-sharing platform.
- Supporting Healthy Communities
- Preserves and raises direct care worker wages; increases funding for cancer prevention, smoking and vaping cessation, and behavioral health support; expands behavioral healthcare through a new state psychiatric hospital; continues funding for Rx Kids and the Healthy Moms Healthy Babies program; supports crime victims in light of declining federal funds; supports nursing home staffing; and invests in the autism navigator program.
Fixing Michigan’s Roads
- Investments to continue fixing roads and other infrastructure including new and sustainable funding to improve state and local roads; repair and replace local bridges; and support public transit and rail programs.
Creating Jobs and Growing the Economy
- Growing Our Economy
- Invests in public infrastructure and prepares sites for future development or redevelopment; continues business attraction and revitalization programs; continues funding for the Pure Michigan campaign; establishes a Maritime and Port Facility Office; and supports economic growth in rural communities.
- High-Tech Jobs
- Supports MiSTEM programs; invests in the Office of Future Mobility and Electrification; grows the maritime manufacturing sector; and strengthens the defense industry.
- Workforce Development
- Continued funding for workforce development programs including training opportunities for youth, dislocated workers, and underserved populations; support for Michigan Rehabilitation Services; and the Community and Worker Economic Transition Program.
- Vibrant Communities
- Funding for the Michigan Housing and Community Development Fund; statutory changes to increase responsive to housing needs; added support for arts and cultural institutions; and allocations for the Rural Heritage Partnership Program.
Keeping Communities Safe
- Protecting Public Safety
- Sustains revenue sharing to help localities ensure public safety; support for offender success services; funding for trial court programs that address substance and mental health issues; in-service training for law enforcement officers; an increase for the Michigan Public Safety Communications System; continues the gun violence prevention task force; and maintains the Victim Support Program.
- Veteran and National Guard Support
- Funding to operate veterans’ homes, the Michigan National Guard Member Benefit Fund, and county veteran services grants.
- Safeguarding Air, Land, and Water
- Support for drinking water and environmental health programs; updating fisheries systems; invasive species controls; expanding outdoor access; off-road trail improvements; cleaning up contaminated sites; promoting sustainable farming practices; encouraging private forestland stewardship; and helping families purchase nutritious foods.
Effective and Efficient State Government
- Continued investments to modernize state systems; bring greater efficiency to court operations; investigate discriminations complaints; and strengthen the Election Equipment Reserve Fund.