After months of posturing, and two days after the new fiscal year began and the Michigan constitutional requirement to have a budget in place, the legislature passed a budget, along with $1.8 billion in ongoing road funding, based on a deal struck between House Republicans, Senate Democrats, and the Governor. Early on October 1, 2025, the legislature passed a continuation budget that kept the state government open until October 8, 2025.

The Governor indicated early on that ongoing road funding must be a part of any budget deal, and along with the Senate Majority Leader, demanded that new revenue, not just budget cuts. Read more about the new road funding plan and revenue HERE.

The spending plan totals nearly $81 billion when counting about $5 billion in Medicaid provider tax revenue that was moved into contingency funds, and also include the increase in road funding. That’s less than the $82.5 billion budget Whitmer signed last year and the $84.5 billion proposed by Senate Democrats, but more than the $78.5 billion proposed by House Republicans.

Budget highlights include:

• Increased transparency on legislative earmarks (aka pet project/port). For the first time, House Republicans published legislative requests for special projects. The Senate has adopted rules to ensure it will also happen in that chamber going forward. All requests for the State House can be viewed on the House website here.
• Significant cuts to the MI Economic Development Corporation (MEDC) including the elimination of the Strategic Outreach and Attraction Reserve (SOAR) fund.
• Requirement that state buildings have a consistent 80% occupancy rate or will be sold, in order to get state employees back working in person.
• Cut more than 1,700 full-time state government positions that are currently not filled, known as “ghost employees.”
• It did NOT include Gov. Whitmer’s proposals to increase fees for trash and hazardous waste dumping in the state.
• Per-pupil funding was increased for K-12 from $9,608 to $10,050; community colleges saw a small bump in funding, as did universities outside of U of M and MSU, who received only a 2% increase in funding.
• Revenue sharing with local government (city, county, township) remained flat.

Additional details and information on this year’s budget can be found through the State Budget Office HERE.