Dec. 12, 2025 | This Week in Government: Bedlam Erupts as House Approps Axes $645M in Work Projects

House Speaker Matt Hall crowed over the nearly $645 million in work projects scrapped by the House Appropriations Committee Wednesday afternoon.

“Today in one swoop, we saw the House Appropriations Committee eliminate hundreds of more millions of dollars in waste, fraud, and abuse,” Hall, R-Richland Township, said during a press conference. “This is my favorite Michigan law, because they came up with a law that said one chamber, through their appropriations committee can cute this waste, fraud, and abuse…We’re the Republican caucus worthy of the fiscal responsibility award that we won this year, that we’re coming in and cutting.”

After being at ease for nearly seven hours, the House Appropriations Committee voted to cut $644.9 million ($351.5 million General Fund) in work projects in a near party line vote.

Not since the enactment of the Management and Budget Act’s in 1984 has the obscure provision been invoked in such sweeping fashion and never in the House.

On Nov. 24, Gongwer News Service first reported that House Republicans were reviewing the list of work projects from the 2024-25 fiscal year and summoning departments and agencies to subcommittees to explain why those without support in statute should be continued another year. The move sent shudders through the administration of Gov. Gretchen Whitmer.

The House Appropriations Committee and the Senate Appropriations Committee each had 30 days from the Nov. 14 letter sent by State Budget Director Jen Flood to reject the continuation of those work projects. Under the Management and Budget Act, only one committee needs to vote to reject a work project to nix the funding.

Wednesday, multiple sources told Gongwer there was considerable resistance among the Republican members of the House Appropriations Committee to scuttling the work projects. The committee convened at 9 a.m. and then spent more than seven hours at ease amid the drama.

Hall’s success at persuading nearly all 17 Republicans on the committee to vote to reject stunned the Capitol community. Only Rep. Ron Robinson, R-Utica, joined the Democrats in voting no. The cuts include $2.1 million in education improvements in the Department of Corrections, $15 million to the Clean Michigan Initiative for brownfields, $1.8 million for firearm safety and violence prevention, and $50 million for the Indigent Defense Commission.

Also cut from the budget was $102.6 million in community enhancement grants. Details of the specific grants eliminated were not immediately available.

“There’s some things there that are good, but there’s a whole lot of things that are bad,” Hall said. “I think this is a great opportunity to close the books, because we could close the books, and then we can put back in here the ones that are good.”

The projects cut were all parts of the 2024-25 fiscal year budget, which was the last budget passed by the Democratic trifecta.

House Democrats were furious about the cuts.

“This process has not been transparent all year long,” Rep. Julie Rogers, D-Kalamazoo, said. “MCOLES, community colleges, human trafficking, public safety, survivor justice, community and schools, prenatal care for kids. This is cutting projects that have already been approved.”

Rep. Alabas Farhat, D-Dearborn, former House Appropriations minority vice chair called the move the “House Republican Jobs Reduction Act.”

“The speaker must hate being in the majority. I feel bad for his members who have to explain this in their districts,” he said in a statement to Gongwer News Service. “Projects they fought so hard for. Gone.”

Hall and House Appropriations Chair Rep. Ann Bollin defended the lack of transparency in the process. Details of the projects that would be eliminated were made publicly available only minutes before the committee voted.

Bollin, R-Brighton, said she had multiple conversations with the State Budget Office, state departments, subcommittee chairs and budget staff.

“We do want everyone to weigh in,” she said.

Work projects, in general, need to be more transparent, she said. Money should be authorized for one year, rather than four-year periods.

The House General Government Appropriations Subcommittee held a hearing on Tuesday about potential cuts to work projects. There were no other public meetings prior to the cuts made Wednesday afternoon.

“We’re getting into this gray space of what’s transparent and what’s not,” Bollin said. “I think it’s more effective to think of this as a homework project… You have a budget, and now you’re saying, did you make progress?”

She said the 2025-26 work projects were better negotiated, unlike the projects cut by House Appropriations.

“I don’t think that it would have been good knowing that some of these projects that have been highlighted as bad projects for us, to just sweep them under the rug and go forward,” Bollin said.

Gongwer first reported Bollin, R-Brighton, asked for a review of current work projects. Then, on Tuesday, Gongwer reported the House Appropriations Committee was set to make cuts before the end of the 30-day window to contest a proposed work project in the budget, which falls this week.The House Appropriations Committee or the Senate Appropriations Committees can act unilaterally to eliminate funding for work projects. Hall alluded to the cuts on the House floor Wednesday during session prior to the vote. “If we kill the work project items, next year they’d be subject to HEAT,” he told reporters, referencing the new requirement that legislatively directed spending items be made public 45 days prior to a vote.Hall said that while most of the things being cut were “pork,” not all of it was.” There’s things you cut because there’s a better use for the money,” he said. “There are some valid things that were but, but I’ll explain to you the way this works: Those were tied to waste fraud and abuse.”

Hall said Michigan should not have to spend $158 million for the Make It In Michigan Competitiveness fund to get $40 million for the Hemlock semiconductor.

Hall and Bollin said they would be open to a supplemental that provided funding for some of the cut projects that weren’t “waste, fraud and abuse.”

Bollin said there were good programs that got cut.

“I hope we can work to get those back,” she said.

Hall said people were welcome to justify the spending for work projects.

“I’ll just say a supplemental, you won’t be able to do it in January, because under the new law… you have to get 45 days,” Hall said.

Rep. Will Snyder, D-Muskegon, questioned whether cutting the work projects would violate contracts the state held with the organizations running programs.

Hall said that most of the contracts have a clause nullifying the contract if the Legislature pulls the money.

The House cannot reappropriate the money without approval from the Senate.

Reviewing work projects is part of the work of the Legislature, Bollin said, and it’s not something that should come as a surprise to people.

“It’s the law,” she said. “We’re just following it.”

Legislation that would boost the state’s transformational brownfield program passed the Senate on Tuesday with bipartisan support for a revamped program supporters said would allow for more sites to be improved across the state.

As passed, SB 723 would make sweeping changes to the Brownfield Redevelopment Financing Act. These include an increase in the total amount of tax capture that could be disbursed for eligible projects, what qualifies as a transformational brownfield plan and adding various restrictions and transparency measures for plans.

Total tax capture over the life of the program would be increased from $1.6 billion to $3.5 billion. Individual plans would be capped at a maximum tax capture of $300 million after the bill’s effective date.

For plans approved after the bill’s effective date, the yearly allowable tax capture to be committed or distributed would be $80 million.

Another key provision added would require that tax capture amounts be increased by 25% over project requirements.

From this additional money, 40% would be placed in the Michigan Housing and Community Development Fund, 40% to child care programs and 20% to programs related to small businesses and placemaking.

The additional 25% in tax capture would not be counted toward the $80 million yearly limit in tax capture applicable to plans approved before the bill’s effective date, but it would apply to the $3.5 billion limit moving forward.

Sen. Mallory McMorrow, D-Royal Oak, told reporters there were several positive additions to the bill prior to Tuesday’s vote.

One was that the Michigan Strategic Fund would be required to create a searchable database for transformational brownfield projects and traditional brownfield projects. Projects approved after the bill’s effective date would also be required to include data on milestones regarding projects.

McMorrow also touted two items that she had pushed for inclusion in the final bill.

The first was that owners or developers of transformational brownfield plans that are part of a publicly traded entity would also be banned from engaging in stock buybacks during the period in which they are capturing tax revenues through the program.

“We have to ensure that if a company is capturing Michiganders’ income taxes, that we are not just transferring those income taxes to shareholders,” McMorrow said.

Another would allow the tax capture to an owner or developer to be canceled if they reduce their number of employees in Michigan to a number that results in a net loss of jobs to the state.

Members voted 20-13 for SB 723, with 17 of the chamber’s 19 Democrats joined by three Republicans in support.

Passage of SB 723 took most of the day Tuesday in the Senate, with the bill being amended several times prior to the final floor vote, by which time the bill had ballooned from 45 pages to 71 pages.

When taken up earlier Tuesday in the Senate Appropriations Committee, Sen. Sarah Anthony, D-Lansing, the committee’s chair, said the program has been a success.

“This program has delivered measurable results, turning underutilized properties across our state into vibrant spaces to drive growth and opportunities,” Anthony said.

While the bill was reported 13-3 from the appropriations panel, Republicans raised concerns including what effect it could have on funding to local services, whether it could lead to disparities in the geographic disbursement of program monies and if the changes would enable specific projects to benefit.

Separately on Tuesday, a pair of bills that seek to push the state to develop a long-term strategic plan for economic development also passed the Senate.

A Strategic Advisory Board would be created through SB 213  and SB 214, which would be housed within the Michigan Strategic Fund. The panel would be tasked with developing a 10-year strategic plan, which the Michigan Economic Development Corporation would update yearly upon its completion.

The bills passed 20-13 with SB 214 bill sponsor Sen. John Damoose, R-Harbor Springs, the lone Republican to vote with the Democrats for the bills.

A Senate panel made changes Tuesday to a bill package that would bring back a modified version of the Good Jobs for Michigan program, with a substitute that the bill sponsor said could be followed by further changes.

Members of the Senate Regulatory Affairs Committee adopted the substitute to SB 472 on Tuesday by an 11-0 vote but did not report the bill.

The Good Jobs for Michigan program was allowed to lapse in 2019. The proposal being offered by Sen. Sam Singh, D-East Lansing, would enact stricter requirements for job creation and wage levels.

A substitute for SB 472 makes several changes, including language certifying that the jobs created under the program are new jobs.

Another key provision would prevent businesses that are enrolled in other programs, including the Michigan Economic Growth Authority tax credit program, from enrolling.

The minimum threshold of 25 created jobs under the program would be lowered to 10 jobs.

Other changes included provisions favorable to companies that hire underemployed individuals such as veterans or people with disabilities, language dealing with child care, and the removal of the 1,000 new jobs created language for larger companies.

The panel also did not report SB 473, an accompanying bill that includes multiple options for eligible businesses of various sizes to obtain tax capture as well as requirements dealing with salaries for the new jobs being a certain percentage of the median regional wage.

Two bills were reported Tuesday by the panel: SB 721 and SB 722.

The first bill would extend a sunset of Dec. 31, 2025, for which new commercial facilities exemption certificates may be issued to Dec. 31, 2035. For SB 722, a Dec. 31, 2025, sunset for the Michigan Tax Commission to approved new commercial rehabilitation exemption certificates would also be moved to Dec. 31, 2035.

Members voted 11-0 to report SB 721 and 10-1 to report SB 722.

Members of the Senate voted to relieve residents who received unemployment benefits for which they may not have been qualified during a peak stage of the coronavirus pandemic from having to pay the money back to the state.

By a 35-0 vote, the Senate passed SB 700, which would waive the requirement for the recovery of benefits paid by the Unemployment Insurance Agency that occurred between Feb. 7, 2020, and Sept. 5, 2021.

The bill would designate the payout of those benefits as an administrative or clerical error by the state and prevent recovery from being mandated unless there was a determination of fraudulent receipt of benefits.

Since the peak of the pandemic, UIA had sought to recoup about $2.7 billion in state unemployment benefits paid out during that period to individuals who did not qualify for them. The errors were largely due to administrative discrepancies between state and federal regulations governing unemployment benefits at the time, according to UIA leadership.

Bill sponsor Sen. Darrin Camilleri, D-Trenton, said the bill would address issues affecting people who were swept up in the system during the height of the pandemic due to no fault of their own. He said years after the crisis, people are being asked to pay back thousands of dollars during a time of rising prices squeezing families.

Camilleri compared the situation to the hundreds of billions of dollars handed out to businesses across the state and country through the federal Paycheck Protection Program whose loans were almost entirely forgiven.

“If corporations are not being asked to give back these funds for some mistakes that probably happened during that process, we should not be doing the same thing to working-class families here in Michigan, people who fell on hard times and are being asked to pay back something that they thought that they never owed in the first place,” Camilleri said.

He said the bill does not impair UIA’s ability to go after people who perpetrated actual fraud.

An S-3 substitute was adopted prior to the vote specifying that the bill applies retroactively to claims for the COVID pandemic period outlined in the bill. The UIA would also be required to notify claimants of a waiver granted under the bill when they are eligible. The agency would then be required to issue determinations regarding waiver applications.

Senate Minority Leader Aric Nesbitt, R-Porter Township, placed the blame for the UIA’s failures during the pandemic on Gov. Gretchen Whitmer.

“After the COVID-19 pandemic, we’re still dealing with the repercussions of this administration’s ineptitude,” Nesbitt said. “Her failed leadership has put taxpayers on the hook for billions. … As we enter the Christmas holiday, we are reminded yet again that Governor Whitmer’s disastrous decisions are the gift that keep on taking rather than giving to the people of Michigan.”

Sen. Jeff Irwin, D-Ann Arbor, said UIA has aggressively gone after people who received benefits, many of them he said have been bullied.

“There are thousands of people in our state, real people who are not committing fraud, who just tried to access a system that we said was said to be available to them, and now they’re getting continually harassed,” Irwin said. “The agency needs to wipe clear these pandemic-related fraud claims that they have no real evidence of and focus their time on the real fraudsters.”

The state’s seasonally adjusted unemployment rate was down by one-tenth of a percentage point to 5.1% in the month of September, according to the monthly report released Wednesday by the Department of Technology, Management, and Budget.

The release of the data, which usually would have occurred in mid to late October, was delayed by the federal government shutdown.

The state’s jobless rate was 0.7 percentage points above the nationwide rate, which increased by 0.3 percentage points, standing at 4.4%. The state’s unemployment rate has remained unchanged since September 2024.

Employment fell by 2,000 in September and unemployed individuals continued to creep back by 5,000, resulting in an overall workforce decline of 7,000 in September.

“Michigan’s labor market showed declining trends for both the labor force and state unemployment rate throughout the third quarter. Both metrics have fallen from recent peaks earlier in the year.” Wayne Rourke, labor market information director for Michigan’s Center for Data and Analytics, said in a statement. “Payroll jobs edged up slightly in September, displaying minor monthly job gains in the third quarter.”

September is the seventh consecutive month of decrease in total employment, with 28,000 less people employed since February.

But, the average quarterly jobless rate was reduced by 0.2 percentage points since the second quarter of 2025, from 5.4% to 5.2%.

The state’s employment-populations ration remained unchanged in September at 58.2%.

The number of unemployed people in the state was only up by 0.4% over the year, where the national number increased by 10.2% since last year.

The Detroit-Warren-Dearborn Metropolitan Statistical Area seasonally adjusted unemployment rate remained unchanged in September, at 4.6%. Total employment fell by 8,000, but total unemployment was reduced by 1,000.

Michigan nonfarm payroll jobs increased by 2,000 in September.

The construction sector had the largest over-the-month employment increase in September, with 4,000 new jobs. The losses were led by private education and health services, losing 5,000 jobs.

The data for September was released late due to the federal shutdown. Laura Wotruba, spokesperson for DTMB, previously said September’s data was collected, but not analyzed, leading to this delay (See Gongwer Michigan Report, Dec. 1, 2025).