Lansing Budget Updates: Critical Talent and Economic Programs Face Divergent Paths 

This week, Michigan legislative subcommittees advanced numerous budget proposals for the 2026-27 fiscal year, presenting contrasting visions for the state’s economic future. The Michigan House spent Wednesday, April 22, sending their version of the budget to the Senate. The Senate is expected to advance its bills out of its chamber next week. The next major step will be on May 15 at the Consensus Revenue Estimating Conference, when the state officially determines the amount of money it has to budget.

The legislature is currently on pace to complete the budget by July 1.

The House Labor and Economic Opportunity (LEO) Subcommittee proposal would cut the department’s budget by 16% overall. However, a vital component of the House proposal is the reinstatement of the highly effective Going PRO program with $40 million, contrary to the executive recommendation that removed it. The House plan also redirects $145.3 million in lapsed Strategic Outreach and Attraction Reserve (SOAR) funds toward one-time allocations within a new Legislative Spending Transparency Fund.

Conversely, the Senate Appropriations LEO and Michigan Economic Development Corporation (MEDC) Subcommittees reported SB 870, which disappointingly leaves out the Going PRO program and Strategic Site Readiness funds. The Senate proposal does include a one-time allocation of $60 million from the General Fund for business-attraction grants.

The Senate Appropriations Pre-K-12 Subcommittee reported a $22 billion K-12 budget. Senate Democrats introduced a policy proposal alongside the budget to lock in a long-term, weighted funding formula modeled after Massachusetts to provide equitable funding for at-risk students and others in need.

Meanwhile, the House reported a $21.5 billion K-12 funding plan that notably leaves out the weighted formula restructure. The House plan increases the per-pupil foundation allowance by $250, bringing the total to $10,300. To address literacy outcomes, the House proposal requires funds to be spent on one of five curricula utilized in Mississippi, a state that has seen significant growth in reading proficiency.

Related | Jeff Donofrio Explains Mississippi’s Education Level Bounce Back at Detroit Policy Conference

House Republicans moved a transportation budget proposal that provides an additional $100 million from the General Fund toward local and state roads and bridges.

The Senate Appropriations Military, Veterans, and State Police Subcommittee advanced a fiscal year 2025-26 supplemental providing $152 million for Selfridge Air National Guard Base. The House has moved a similar supplemental in March. Securing this funding is imperative to complete necessary base upgrades for the newly awarded fighter mission, which remains a critical defense asset for the region.

For General Government, a Senate subcommittee kept statutory revenue sharing flat. The proposal establishes a Revenue Sharing Trust Fund, a measure that local governments have called for to stabilize long-term funding.

The Senate also reported its Department of Health and Human Services (DHHS) budget, which leaves out the Governor’s proposed tax increases on tobacco, vapes, and digital gaming intended to cover Medicaid costs.

House Republicans have introduced bills to cut property taxes in the state while also applying the 6% sales tax to services. HBs 5872-5880 would remove the pop-up tax on home sales, repeal the state education tax on property, and exempt utilities from property taxes. HB 5880, which establishes the services tax, does not specify which services will be taxed, leaving it for further discussion.

It’s unknown how far these bills will go, especially since HB 5872 would require voter approval as a constitutional amendment via HJR T of 2026.

The Detroit Regional Chamber’s Public Policy and Business Advocacy team will continue to inform Chamber members and the business community at large about these budget proposals.