June 26, 2026 | This Week in Government: Days After Announcement of Framework, Doubts Creep in on Budget Before July 1

Earlier this week, legislative leaders and Gov. Gretchen Whitmer’s administration said they had a budget framework agreement, and expectations were that a 2026-27 spending plan could be passed ahead of the July 1 deadline. As of Thursday night, the status of negotiations appeared murky at best with questions abounding on the likelihood of forward progress.

Sources following the budget negotiations said there is a rift between the Republicans and Democrats. House Republicans think Senate Democrats are unable to make the cuts necessary to fit in the agreed upon framework. Democrats think House Speaker Matt Hall, R-Richland Township, is moving the goal posts.

“I’m not going to say,” Hall said when asked about targets on Thursday afternoon. “I want to maintain the trust of the Democrats as they’re continuing to swallow the agreement they signed and agreed to the targets. But we should have had the targets done immediately, I mean the same day, so you can infer something from that.”

After the announcement just after noon Tuesday that the principals had agreed upon a framework, several sources said they expected a target agreement with more spending specifics to follow that evening or Wednesday morning. Instead, the clock has continued to tick without a target agreement.

The hope and expectation was that all the details could be agreed upon in time to begin the lengthy drafting process this weekend.

Hall said that Democrats needed to make the cuts happen to reach the topline number they agreed to.

“Then we’ll get the subcommittees going,” he said. “Then we can get back to the table and see, can we do hospital review board? Can we do massive property tax cuts? And then there are some of these things that the governor and the Democrats… are focused on.”

The House moved bills related to the Housing Development Fund and the Housing Opportunity Tax Credit on Thursday, Hall said, to keep those bills in play for negotiations. They also moved several other packages that could have relevance to ongoing budget talks.

“Maybe they’ll be part of a deal, maybe they won’t,” he said. “I don’t want to not keep this in play and keep this property tax conversation alive, along with some of these other housing issues that the Democrats are championing and see where it goes.”

It remains unclear if policy discussions and negotiations outside of the budget are holding up progress.

Two things were clear Thursday: Frustration is growing, and key players in the budget negotiations were expected to work late.

Tensions among those entities with fiscal years that begin July 1 continue to build.

The Michigan Association of School Boards and Michigan Association of Superintendents in a joint statement Thursday called on the Legislature and Whitmer to get the budget done, even if it means working in Lansing through the weekend.

“Completing a responsible and balanced School Aid budget should be the Legislature’s only priority right now,” the statement said. “There are five days left; schools deserve certainty in funding as they prepare for the next school year. Michigan’s school leaders are willing to work with the Legislature to ensure the state delivers a budget that truly invests in Michigan’s students and schools and is on time.”

Testimony began on the bill package that would create a hospital review board on Thursday, and although the committee did not report the bills to the floor, House Speaker Matt Hall said the legislation was still in play for budget negotiations.

The bills – HB 6116, HB 6117, HB 6118, and HB 6119 – would require hospitals in the state to reduce costs by 10% to keep their nonprofit status.

The bills would also create an oversight board that would monitor proposed cost increases and mergers.

During the House Government Operations Committee meeting on Thursday, supporters argued the legislation was necessary to rein in the cost of healthcare.

“Families are delaying care because they fear financial consequences. Small businesses struggle every year to continue providing health insurance to their employees, and workers see higher premiums, higher deductibles, and larger out of pocket costs, leaving less room in their household budgets for everything else,” Rep. Mike Harris, R-Waterford Township, one of the bill sponsors, said. “The status quo simply isn’t working.”

Adam Carlson from the Michigan Health and Hospital Association and Ben Frederick from Memorial Healthcare testified in opposition to the package, saying they addressed one small part of hospitals’ costs, and that many hospitals in Michigan operate on negative margins.

“The question our team confronts daily is not just the cost of the individual visit, it’s what does it cost to maintain access to care 24 hours a day, 365 days a year, regardless of patient’s insurance status or ability to pay, and how many beds we may have occupied at that moment,” Frederick said. “The price mandates would disproportionately hit rural and independent hospitals harder due to our disadvantaged bargaining position with payers. Future caps that do not acknowledge fixed rising costs…Further paperwork all will have a negative effect on the ability to provide patient care.”

Brian Peters, Chief Executive Officer of the Michigan Health and Hospital Association, said the bills would act as an accelerant in the affordability crisis.

“Michigan hospitals are already under severe financial strain, with nearly a quarter operating at a loss and several at risk of closing. This legislation would double the number of hospitals operating in the red to a total of 54. Existing cuts to Medicaid reimbursement and reductions in enrollment are already projected to slash more than $6.5 billion from hospitals in the next six years,” he said in a statement. “Adding duplicative government price controls and administrative burdens will only intensify these challenges, while removing an additional $2.3 billion from Michigan hospitals every year. This translates into an estimated loss of 21,600 hospital jobs, including 9,000 fewer than expected registered nurses.”

Amanda Fisher, director of NFIB Michigan, praised the efforts of House Republicans in a statement.

“Various studies show that the consolidation of hospitals and healthcare systems is a growing problem that has led to cost increases varying anywhere from 6% to 65%. NFIB appreciates the efforts of Speaker Hall and House Republicans for their leadership on ensuring that those hospitals that are receiving significant tax breaks due to their non-profit status are not keeping their prices in line with costs,” she said. “While not a panacea, it is one step toward curbing the crippling cost of healthcare for small businesses.”

Democrats said they were eager to have a conversation on the cost of healthcare, but they were concerned about the speed at which this bill package, which was introduced last Thursday, was moving.

Rep. Matt Longjohn, D-Portage, said a bipartisan policy conversation was needed to understand the ripple effects of the bills.

“We all know that the cost of healthcare is through the roof and going up faster than you can account for it,” he said. “I think there should be room for conversation about many of the items in this package, but the problem is, is that no one else has heard about it until they’re sprung on everybody. And the impacts on hospitals who are facing closure, the impact on these hospitals are often the largest employers in their communities.”

The cost of healthcare is more complicated than just a 10% price reduction off the top, Longjohn said.

“When we talk about putting a 10% cut across the board, you wonder whether it’s going to be nurses let go, whether it’s going to be the good things that they’re doing in the community that are first things cut,” he said. “There’s a reason why surgeons don’t use wood axes to do procedures, right?”

Rep. John Fitzgerald, D-Wyoming, said a rushed process for a multifaceted problem was likely to produce a short-sighted solution.

“I don’t think there’s any potential for any action, at least from my caucus, at this moment,” he said.

No further action was taken on the bills Thursday, which means they would not be eligible for passage in both the House and the Senate prior to the July 1 budget deadline because of the requirement for bills to sit in the opposite chamber for five days after passage.

Hall, R-Richland Township, said that didn’t mean the package was out of budget negotiations.

He said whether House Democrats were on board was irrelevant, saying that they were trying to protect the system that leads to high costs.

“We’re going to dramatically lower the healthcare costs, and the hospital cost review board is going to do that,” he said. “We hear these arguments all the time, and then when we get a deal, they vote for it. So, I’d be shocked if we put it on the board, and every Democrat voted no on lowering healthcare costs.”

Changes to the state’s price gouging law cleared the Senate on Thursday along party lines, a sign that a proposal put forward in recent sessions still faces an uphill climb before the end of the year.

Thursday’s vote was the latest attempt to beef up the state’s price gouging law over the last several sessions, which have been unsuccessful.

Prior to the vote, Sen. Jeremy Moss, D-Bloomfield Township, pointed to a major 2017 storm and mass power outage in which there were reports of a hotel in his district charging sharply higher rates in its wake.

He said the bill package is part of a years-long effort to address state price gouging law after learning the existing law left little recourse for residents to have complaints addressed.

Currently, 34 states and Washington, D.C., have some form of price gouging laws in place. He said the proposed changes would ensure the state has clear provisions in law specifying what is applicable during a declared emergency, which is the case in the other states.

Moss said the bills are modeled after provisions from both Republican and Democratic-controlled states. He pointed to the Gulf Coast states, which have specific provisions in place for emergencies, particularly hurricanes.

“While Michigan doesn’t experience hurricanes, we have our share of extreme weather emergencies,” Moss said. “Sadly, we also have people looking to make a quick buck off the hardships of others, but we don’t have the same consumer protections as states around the country.”

Members voted 20-15 along party lines to pass SB 1041, SB 1042, and SB 1043.

As passed, the package would cap price increases for goods and services, hotel rooms, and energy costs during a declared state of emergency. The cap would be a 20% increase above the average price during the previous 30 days prior to the emergency.

Similar legislation passed the Senate along party lines late last session but died in the House. Versions of the bills have been introduced in prior sessions.

Following the vote, Moss told reporters it was confusing to see the Republican opposition. He said no one testified in opposition to the bills in committee, and no members stated any reasons for their opposition.

“The only thing that has been said in years past is ‘oh, free market,’” Moss said. “How are you going to tell somebody that in a state of emergency when there’s a water main break, and water bottles are being outpriced? When there’s a power outage, and hotels are being outpriced? When there’s an emergency, like a tornado, and lumber is outpriced? How are you going to make a free market argument to those people when they’re in dire straits?”

Sen. Mary Cavanagh, D-Redford Township, agreed, pointing to increased costs for generators or other costs following a power outage. She used the example of ice storms in recent winters.

“We’re just saying during those times of emergencies, those products and those things that are lifesaving weren’t that price 10 minutes before, 10 minutes after, and so we just want to make sure the market is being held accountable,” Cavanagh said.

The Michigan Housing and Community Development Program would be expanded to include middle-income households under a bill that drew bipartisan support in the Senate on Wednesday.

Passing was SB 278, which would allow for the program’s expansion, housed within the Michigan State Housing Development Authority, making financing available for low-income households to include middle-income households.

“There will be more flexibility for building housing that people in Michigan can afford,” bill sponsor Sen. Sue Shink, D-Northfield Township, told reporters following the vote.

She said housing costs are rising and preventing not just low-income households from finding affordable housing, but also middle-income households from paying for or even renting a home.

“This missing middle housing is very important,” Shink said. “It’s also important for people who want to live in the communities where they work.”

When the bill was taken up in committee, the question was raised whether the bill could cause housing developers to shift to building higher-end housing if the changes were implemented.

When asked Wednesday about the concern raised in committee, Shink said she did not see that as an issue, saying the bill allows for housing to be used for people who make up to 120% of the area median income.

“That’s not luxury housing, that’s housing for people who are working and still oftentimes very much struggling,” Shink said.

The vote for SB 278 was 24-13, with four Republicans joining Democrats in support: Sen. John Damoose of Harbor Springs, Sen. Mark Huizenga of Walker, Sen. Roger Victory of Georgetown Township, and Sen. Michael Webber of Rochester Hills.

The Senate also passed SB 480, which would amend the Childcare Licensing Act to modify the definition of “minor child” by removing limits on the number of residents in a foster home or group home who may be 18 years old or older. Members voted 26-11.

Also passing 22-15 was SB 517, which would specify in statute what technology a school district could and could not purchase using borrowed money and notes or bonds.

Republicans voiced opposition Thursday to an economic development fund with an automatic funding source close to expiring, saying they hope to see the program’s funding end.

On Thursday, the Senate discharged SB 913 from the Senate Appropriations Committee and voted 20-12 along party lines to pass it.

The bill would eliminate the sunset for the 21st Century Jobs Trust Fund, which receives $75 million per year in national tobacco settlement revenue to the state.

Prior to the vote, Sen. Thomas Albert, R-Lowell, took aim at the Michigan Economic Development Corporation while speaking against the bill.

He cited a report released Wednesday from the Mackinac Center for Public Policy estimating that out of $2.7 billion in state economic development incentives offered by the state for eight large projects in recent years, about $1.8 billion had been spent, creating 602 jobs, below the projections of more than 20,000 jobs Gov. Gretchen Whitmer’s administration had said would be created through the projects.

“The MEDC is an abject failure, and we ought to consider ways to shut it down rather than enabling it to further waste taxpayer dollars,” Albert said. “Only in the world of government can an agency continue to be rewarded in the light of repeated failure.”

The 21st Century Jobs Trust Fund was created in 2005 to support economic development, community revitalization, tourism promotion and other uses through the Michigan Strategic Fund, which is housed within the MEDC.

Funding was scheduled to sunset after fiscal year 2019 but has been extended multiple times since then.

House Speaker Matt Hall, R-Richland Township, told reporters Thursday the 21st Century Jobs Trust Fund was dead.

“My hope is when the budget deal is done, that will end,” Hall said.

Hall said he thought Medicaid was a better use of the $75 million in funds from tobacco settlement dollars.

“If we do nothing, that money expires,” Hall said. “We can then appropriate it for better use.”

Hall said he would rather see HB 6043, sponsored by Rep. Greg VanWoerkom, R-Norton Shores, pass. The bill was introduced earlier this month and would expand the Tri-Share Child Care program.

The House discharged HB 6043 from the House Appropriations Committee later Thursday and passed it 95-10.

Last month, the Senate passed its own version of tri-share program legislation.