July-August Budget & Legislative Round-Up

By Ramiro Galván

This summer, the politically divided Michigan Legislature has been at a standstill with the state’s budget for Fiscal Year (FY) 2025-2026.

In February, Governor Whitmer provided the legislature with her executive budget recommendation, which generally kick-starts the calendar year’s budget process. In May, the Michigan Senate quickly unveiled their departmental budget bills, passing them out of their respective subcommittees and voting them off the Senate floor within the same day. Of the two proposals, the governor recommended a state budget totaling $83.5 billion, and the Senate’s budget totaled $84.6 billion. However, as of the beginning of August, we have yet to see a House version of a completed budget.

The state budget process this fiscal year has been different than previous years for a myriad of reasons. First, January was chock full of conversations around impending paid sick leave and minimum wage laws, delaying budget progress. In addition to the delay, the Michigan House invoked new procedures to increase transparency throughout the appropriations process with a new system requiring individual legislators to put forth their specific requests and project details into a public system. The federal One Big Beautiful Bill resulted in over $1 billion worth of funding cuts to the state of Michigan. Further, the Michigan House and Governor Whitmer have been walking intandem in search of a road funding deal in this year’s budget. The Michigan Senate, however, has stated that a road funding deal cannot come at the expense of state programming that would likely fall victim to a road funding plan without a new revenue stream.

The most significant telltale sign for the poor negotiations between legislative chambers is the failure to pass a School Aid Fund (SAF) budget by the statutory deadline of July 1; a deadline Michigan has in place to provide schools with a “heads-up” on the amount of revenue they can expect to receive as they budget for their upcoming school year. After the Michigan House and Senate failed to reach an agreement on the SAF budget by the statutory deadline, there hasn’t been movement between the two legislative chambers on any departmental budgets. In Michigan, the state has a constitutional deadline to pass a state budget by October 1st and without significant movement thus far, there’s a looming possibility of a government shutdown.

For the first 7 months of the 103rd Legislature, there have only been 6 bills signed into law – the lowest number of bills signed into law at this point in a legislative cycle in the history of Michigan. With budget negotiations proceeding poorly, legislation that has successfully passed out of one chamber, including House Bill 4309 the Physicians Associates Compact Licensure bill, has been halted due to overarching political reason. Up until the third week of August, the Republican House was not moving bills sent from the Democratic-led Senate, and the Senate was following suit by not advancing Republican House bills. However, we recently saw movement on several House Republican bills on the Senate floor. This is hopefully indicative of a thawing of political tensions and willingness to move bipartisan legislation that betters Michigan, our workforce, our families, and our economies.

As of July, MAPA has begun working with Midwest Strategy Group (MWSG) of Lansing to advance our legislative priorities. This partnership is spearheaded by our lobbying team at MWSG, Ramiro Galván and Leah Bolger, and MAPA President Michael White.