May 23, 2025 | This Week in Government: State Revenues Down, Which Could Factor Into Budget Fight Ahead

The Legislature will have $320 million less than expected in January to work with as it works to develop a budget for the 2025-26 fiscal year.

Members of the Consensus Revenue Estimating Conference met on Friday and revised their projected fiscal year revenue for the General Fund and School Aid Fund down by a combined $320 million from the last estimate in January. The officials revised revenue down by $136 million for the current 2024-25 fiscal year.

Higher than anticipated eligibility for tax cuts drove the decrease in revenue, along with softening corporate income tax and personal income tax revenues.

“I think we learned that we certainly need to be watching the budget and watching the numbers,” House Appropriations Chair Rep. Ann Bollin (R-Brighton) said. “For me, it affirms that the path House Republicans are on through our appropriations process. We’re on the right track to make sure that we’re taking a deep dive looking at everything so that we can move forward with our 2026 budget.”

All of the downward revision from January occurred in the General Fund – a $221.6 million drop for the current year and $363 million drop for the 2025-26 fiscal year. Revenues the School Aid Fund were slightly revised upward.

The changes mean the General Fund will fall in the current fiscal year from the 2023-24 fiscal year overall by 0.2%, though School Aid will be up 2.6% year over year.

Even with the downward revision, year-over-year revenues are still expected to rise in the 2025-26 fiscal year over the current year by 4.3% in the General Fund and 2.1% in the School Aid Fund.

The Senate has already passed its department budgets, but the House has not yet moved its proposed budgets out of subcommittees.

“We really needed the information from today to see where we’re at,” Bollin said. “We’ve been planning on cuts, not just so that we can fund the roads plan, but just in general. The sentiment should be no surprise to us. There is a sentiment that our revenue picture wasn’t going to be as rosy as it’s been in the past couple of years.”

Bollin said that she expected subcommittees to start reporting their budgets “soon” but would not say if that would happen this month. She did say she hoped to pass the School Aid Fund budget prior to July 1. That is the statutory deadline for the Legislature to pass budget bills. School districts’ fiscal years begin July 1.

Rep. Alabas Farhat (D-Dearborn), Appropriations minority vice chair, said that with the high degree of economic uncertainty and the slow pace House Republicans are taking with the budget, the Legislature will need an additional Consensus Revenue Estimating Conference.

“If Speaker Hall stays on his pace for the budget, we will have two more CRECs before we understand what a balanced budget requires,” he said. “Between the uncertainty at the federal level and dysfunction in D.C., and no serious desire to get a budget done here in Lansing anytime soon, I will be calling for an additional Consensus Revenue Estimating Conference to happen the first week of September.”

Generally, the Legislature holds two revenue conferences per year in January and May. In 2020, amid uncertainty because of the coronavirus pandemic, there was a third conference in August.

Sen. Sarah Anthony (D-Lansing), chair of the Senate Appropriations Committee, said the more conservative estimates were not a surprise.

“Our country has experienced significant changes since January, including shifting economic policies. The full impact of these changes is still unknown, so it’s no surprise that the numbers presented at today’s conference are more conservative than previous estimates,” she said. “The numbers presented at today’s conference highlight Michigan’s resilience and strength. Some things are certain: our values are unwavering, and we have prepared our state well to face any challenges that may arise. Senate Democrats are ready to tackle any issues that come our way, and we will continue to advocate for and promote fiscally responsible policies that make life better for the people of Michigan. As Senate Appropriations Chair, I will keep using the budget to uplift and support every Michigander, from our students and teachers to our seniors, veterans, and everyone in between. As Democrats, we remain committed to investing in people, because every dollar spent helps build a future that Michiganders deserve.”

Bollin said the Legislature will need to go through the budget mindfully and pointed to $2 billion in work projects on the books.

“I think every department should be required to dig deep and look at those,” she said. “That’s a lot of money, and as I go through them and look at some of the descriptions of them, I’m like, ‘well, that doesn’t even make sense.’ … Some of them could be very good programs, but we should be measuring and making sure that we’re making some progress on those before we fund them again.”

Bollin said that the Legislature should pay extra attention to Medicaid and human services.

“We have $7 billion of extra money for DHHS in optional care, and things that I don’t think that we want to cut out if the feds cut them out. Things like pharmaceuticals, for example,” she said. “We want people to be on their insulin drugs and their blood thinners, so let’s take a look at that.”

Bollin said the Legislature was going to work hard to meet its commitment to fixing the roads and making sure people have their needs met, despite lower revenues.

“I don’t know if we’re going to have enough, but we are going to work very hard to make sure that we meet our commitment of fixing the damn roads and making sure people are taken care of – supporting law enforcement, education’s got to work, we want access to affordable health care for the most vulnerable, for all of us,” she said. “And we’re going to keep working at it to get there.”

Farhat said that the lower estimates should not be used as a reason to make cuts to important programs.

“State revenues are still strong, and we cannot let those who seek to cut life saving programs for tax cuts use this announcement as an excuse,” he said. “We must make smart investments in this year’s budget to support Michigan families and retain our state’s talent and young people. Michigan is in a global competition for good paying jobs, educational opportunities and investments. I call on my colleagues to put aside partisan egos and come together so we can deliver real wins for Michigan.”

The administration emphasized that although the current economic outlook was uncertain, the numbers from Friday’s CREC indicated that Michigan was in a good place.

“The uncertainty, whether it’s tariffs or taxes at the federal level, has been a main theme for today, I just want to emphasize it from a budget perspective, Michigan is in great shape,” Budget Director Jen Flood said. “The numbers that we saw today affirm that our plan is working, and so we look forward to working with the legislature to pass the governor’s seventh balanced, bipartisan budget on time.”

After an early Thursday morning vote on the Trump-backed federal budget dubbed the “One Big Beautiful Bill,” Michigan’s congressional Republicans celebrated the passage of its provisions on taxes, border security, and federal spending – but others and state officials warned it could have an outsized budgetary impact on the state and lead to heavier administrative burdens in Lansing.

Among the main components of the bill, which still must get past the U.S. Senate, are a $700 billion cut to Medicaid, achieved partly through work requirements, an increased financial responsibility for states in administering and providing SNAP benefits and the elimination of several Biden-era clean energy tax rebates and credits. It also includes more federal funding for southern border security and deportations, increased U.S. Department of Defense funding to construct a “Golden Dome” missile defense shield akin to Israel’s Iron Dome and a tax on some university endowments.

While Democrats opposed to the bill, rifts within the U.S. House Republican conference meant changes were made to the bill early into Thursday morning to secure votes from holdout members. After passage, congressional Republicans appeared a united front in supporting the bill’s provisions, regardless of prior concerns from blue state GOP members over Medicaid cuts and complaints from the party’s right flank that the tax and spending cuts within the bill weren’t sufficient.

“In November, the American people gave Donald Trump and Republicans a mandate to secure the border, lower costs, fuel economic growth, and put America First. The One Big Beautiful bill restores fiscal responsibility to Washington while safeguarding vital programs like Social Security, Medicare and Medicaid,” U.S. Rep. John James (R-Shelby Township), a candidate for governor, said in a statement. “It strengthens border security, including at our northern border, and fosters a pro-growth, pro-family economy that prioritizes working-class Americans. This is a huge win for Michigan and the entire country. President Trump and House Republicans are delivering on our promises to usher in a new American Golden Age where all Americans can thrive.”

Republican members of Michigan’s congressional delegation characterized the bill as a cost-lowering measure and emphasized its provisions on taxes and the southern border. U.S. Rep. Tom Barrett (R-Charlotte) brushed off concerns about Medicaid, arguing the bill actually strengthens it, and saying Democrats are trying to “scare people into believing the sky is falling.”

“The people of mid-Michigan sent me to Congress to do the hard work necessary to lower the cost of living, secure our border, and unleash American energy. The legislation we passed today makes good on those promises and more,” Barrett said in a statement. “Not only does H.R. 1 deliver the largest tax cut in history for the working class and small businesses, it eliminates taxes on tips and overtime pay, makes American-made cars built in Michigan more affordable, provides significant relief for seniors collecting Social Security benefits, and boosts the child tax credit to support families across the country.”

U.S. Rep. John Moolenaar (R-Caledonia) celebrated the passage of the bill with a provision that would prevent green energy production tax credits from being claimed by companies affiliated with the Chinese Communist Party, which echoes his proposal to prevent foreign entities of concern from receiving those tax credits as a measure against the Gotion, Incorporated, battery plant development in Green Township.

“This bill delivers on our promises to the American people to prevent a tax hike that would cost them thousands and puts an end to the crisis at the southern border. It also addresses wasteful spending of taxpayer dollars, by establishing common sense policies to protect programs like Medicaid for the Michigan residents who rely on it,” Moolenaar said in a statement. “I am also grateful my NO GOTION policy was included in this critical legislation. The tax dollars of hard-working Michigan families should not fund companies like Gotion, which are beholden to the Chinese Communist Party.”

Gov. Gretchen Whitmer slammed the bill and expressed disappointment at Barrett, Huizenga, and James, the three Republicans in contested districts for 2026 who some saw as potential opponents of the legislation.

“We cannot accept this level of cruelty towards people who need help, and I encourage all the Republicans in our congressional delegation including Rep. John James, Rep. Tom Barrett, and Rep. Huizenga who voted for these cuts to reckon with the devastating impact this bill will have on their fellow Michiganders,” Whitmer said.

James faces a tough gubernatorial race. Barrett’s reelection will likely be one of the most competitive in the country. Huizenga is considering a U.S. Senate bid that would be extremely competitive or reelection to a potentially more competitive 4th U.S. House District.

Whitmer also said the impact of the bill’s provisions, if enacted by the U.S. Senate in their current state, would cause a significant gap in funding for state programs, particularly ones supported by Medicaid or SNAP.

“We cannot backfill this massive hole in our budget with state funding alone. We need our representatives in Washington to fight for us. We must work together to help families in Michigan succeed, and the way to do that is by investing in the fundamentals that they all need – roads, schools, food, health care and child care,” Whitmer continued. “We’ve proven that here in Michigan, if you work together, you can get a lot done. Instead of passing a huge bill on a party-line vote to make people poorer and sicker, let’s work together to make a real difference in people’s lives and lift them up.”

With Michigan’s budgetary process on the rocks, the federal budget placing a higher burden on states could be particularly pressing in the upcoming fiscal year if the bill is passed by the U.S. Senate in its current iteration. Citizens Research Council Analyst Bob Schneider, also a former House Fiscal Agency director, said the cost of implementing its Medicaid provisions alone would be significant.

Although no official estimate has been made on what costs might be, Schneider said the Department of Health and Human Services would need to devote significant IT resources and staff time to implementing work requirements for Medicaid and to follow the bill’s requirement for Medicaid eligibility to be re-checked twice a year instead of once.

“It won’t be cheap,” he said, noting that the bill itself only sets aside $300 million nationwide for states to administer and monitor the new requirements.

Schneider said the SNAP changes within the bill would have states shoulder 5% of benefit costs beginning with the 2028 fiscal year and 75% of the administrative costs, up from 50%. Based on CRC data from last year quantifying the number of Michiganders on food assistance, he said the state would need to backfill an estimated $250 million, presumably from the General Fund, to continue administering SNAP.

“It’s the federal government saying ‘Look, we feel like we can’t afford it, so we’re passing the costs on to you,’” Schneider said.

DHHS did not immediately return a request for comment on how it believes it will be affected by implementation of the bill’s provisions.

The Politics of the Bill

The bill quickly became political fodder on either side of the aisle, where both parties are looking to the 2026 midterms for control in Washington. The Democratic Congressional Campaign Committee slammed Huizenga and Barrett for their votes on a “singularly devastating piece of legislation.”

“Their cruel cuts to nutrition assistance will end up taking away food from millions of children at the dinner table and the school cafeteria. Their budget sends a cruel, but clear message about what Republicans’ priorities are: massive benefits for the wealthy at the expense of everyone else,” DCCC Chair Suzan DelBene said in a statement. “As Republicans forced this dangerous bill through the process, House Democrats fought to be a voice for the American people. It was House Democrats who worked to fight for policies to actually lower costs, expand access to quality care, and invest in the middle class, only to be rebuffed by House Republicans.”

“America cannot afford the Republican tax scam,” DelBene continued. “Now that these vulnerable Republicans are on the record voting for it, this betrayal of the American people will cost them their jobs in the midterms and Republicans the House Majority come 2026.”

Meanwhile, the National Republican Congressional Committee was quick to attack U.S. Rep. Kristen McDonald Rivet (D-Bay City), whose district is one of the state’s most purple, and U.S. Rep. Haley Stevens (D-Birmingham), who’s running for U.S. Senate.

“Kristen McDonald Rivet’s radical vote is unacceptable,” NRCC spokesperson Zach Bannon said in a statement. “Instead of doing her job and making her constituents’ lives better, she just voted to raise their taxes, take away their jobs and undermine our national security. Michigan voters will consistently be reminded of this betrayal all the way through next fall.”

Health care and environmental advocacy groups decried the bill’s passage. The Michigan League for Public Policy is part of a 240-group coalition opposing the Medicaid cuts in “the strongest possible terms,” said their president and chief executive officer, Monique Stanton, in a statement. According to a report from DHHS, an estimated 700,000 Michigan residents would lose their Medicaid eligibility under the bill as passed by the House.

“Congress has passed one of the most harmful and shortsighted pieces of legislation in a generation, slashing Medicaid and turning its back on tens of millions of Americans, including one-in-four Michiganders who rely on it every single day,” Stanton said. “Let’s be clear about what this bill does: it guts health care coverage for families with low incomes, seniors, children and people with disabilities. It rips away resources from nursing homes and hospitals. It throws red tape in front of people who need care. And it devastates rural communities, where Medicaid is often the only reason a clinic or hospital can keep its doors open.”

Mothering Justice Chief Executive Officer Danielle Atkinson’s statement had a similar sentiment, emphasizing the role Medicaid plays in supporting low-income families, expectant mothers and young children.

“Every lawmaker who voted to pass this bill will be devastating communities of color and families that rely on Medicaid, SNAP, and other critical services now on the chopping block,” Atkinson said. “This sham budget is a handout to billionaires – giving them tax breaks while they take money from our most vulnerable communities. The Senate must stop this billionaire budget.”

Climate Power Executive Director Lori Lodes called Barrett’s vote a “reckless betrayal” of his constituents in her statement, but noted the disapproval several U.S. Senate Republicans have expressed for the House bill.

“These same members have celebrated ribbon cuttings, touted new projects, and promised to protect the very investments they just voted to eliminate,” Lodes said. “But this fight isn’t over. Senate Republicans have made it clear the House bill is unacceptable. Every single House member who voted to risk jobs in their districts, drive up costs, and threaten made-in-America energy will have to answer for that vote back home.”

Just before 3 p.m. Wednesday afternoon, Sen. Sarah Anthony left her office and stepped onto the House floor for the sole purpose of speaking to reporters about a House resolution regarding the Senate’s budget.

It is rare for the chair of the Senate Appropriations Committee to be on the House floor during session, and it’s even more rare for a senator to comment on the House’s proceedings in real time.

“Enough is enough,” Anthony (D-Lansing) told reporters. “My team and I are literally sitting upstairs in my office, thinking about the next steps of how to contemplate these significant potential cuts at the federal level. We have C-SPAN on right now. House Republicans on the federal level are trying to figure out how to give tax breaks to the ultra-wealthy, and I’m trying to make sure that based on these new numbers we got just last week, we can safeguard Michigan families. That’s the work we should be doing.”

Anthony was drawn to the House floor by HR 113, which called on the Senate to recall their budget, which it passed last week.

The resolution said that the budget, as passed out of the Senate, was unbalanced based on the May Consensus Revenue Estimating Conference numbers and would create shortfalls, especially around Medicaid.

The House adopted the resolution, which was given a roll call vote, 58-48 along party lines.

The escalated tension between the House and the Senate comes as the Citizens Research Council of Michigan released a new report showing an $800 million General Fund gap between Gov. Gretchen Whitmer‘s budget recommendation for the 2025-26 fiscal year and the anticipated available General Fund revenue.

One big component in the gap is the $363 million downward revision for the 2025-26 fiscal year in General Fund revenues last week from the January forecast.

The other piece comes from a forthcoming U.S. Department of Health and Human Services rule that will invalidate the state’s Insurance Provider Assessment. That’s the tax the state levies on its Medicaid health insurance plans and the pre-paid health insurance plans that handle coverage for behavioral health as a way of leveraging more federal Medicaid Funds.

The rule, expected to be formalized sometime during the 2025-26 fiscal year, would cost the state $450 million General Fund.

“For the first time in a long time, we have a little bit of a budget problem that we need to solve,” said Robert Schneider, senior research associate for the CRC.

The $800 million gap – which is even bigger when weighing available revenue compared to the Senate-passed budget bills – will grow larger if the Legislature and governor redirect to roads income tax revenues that now go to the General Fund. Further, both parties have called for tax cuts in the range of $700 million to $1 billion that would require further spending reductions or changes if enacted, the report notes.

“This year’s budget deliberation’s will be the most challenging since the Great Recession era,” the report said.

House Speaker Matt Hall (R-Richland Township) has led the criticism of the Senate Democratic budget.

House Republicans rallied to the resolution Wednesday.

“We are not here today to debate partisan politics. We are here because our Constitution demands something simple, a balanced budget,” said Rep. Matt Bierlein (R-Vassar) in a House floor speech prior to adoption of the resolution. “It’s not a suggestion, it’s not a recommendation. It is a mandate. Yet what the Senate has sent us does not meet the standard. According to the nonpartisan Senate Fiscal Agency, the budget passed by our colleagues in the Senate overspends by nearly $1 billion over the projected revenues compared by last week’s Consensus Revenue Estimating Confidence. That’s not just irresponsible, it’s unconstitutional. And if that were not concerning enough, despite this nearly $1 million in excess spending, the Senate Budget underfunded Medicaid by $500 million that put 60,000 Michiganders at risk of losing their health care.

But House Minority Leader Ranjeev Puri (D-Canton Township) called House Republicans’ handling of the budget process irresponsible, given the circumstances.

“The economic data is softening. The projections are now down… We’re thinking hundreds of millions of dollars, which is going to pose just more financial strain on our budget, and this is at a time when there’s deep federal cuts forthcoming,” he said. “We have a significant amount of real conversation that needs to be had, but we’re failing to do that.”

Puri said the House should be spending less time on performative and divisive legislation, such as the resolution to rename the Gulf of Mexico or the bills around transgender student athletes, and more time engaging in serious debate around the real economic issues facing the state.

“Our budget is dependent on those federal dollars. There is no world in which our state can make up for those cuts that are going to happen,” he said. “If we are serious about having meaningful debate, about finding a way to fund our roads, finding a way to protect against the cuts that are coming, then we need to actually do that.”

Hall and the House Republicans can’t pass a budget alone, Puri said.

“Passing something out of the Michigan House doesn’t constitute a success,” he said. “As much a Matt Hall and the Republicans want to yell and scream, the reality is that they cannot pass a budget into a public act by themselves… If you’re going to pass a budget, you’re going to have to work bipartisan and bicameral.”

Rep. Alabas Farhat (D-Dearborn), minority vice chair for the House Appropriations Committee, also called on Republicans to quit wasting time.

“Instead of passing a nonbinding resolution, if my colleagues in the House want to ensure that no Michiganders lose Medicaid cover, it’s simple: pass a budget that fully funds Medicaid by the statutory deadline,” he said.

Similarly, Anthony said the House’s lack of movement on the budget is hampering the process.

“I’m just waiting on the House to actually present a budget so we can start real negotiations,” Anthony said. “The fact that they took time to draft a resolution directing us to do our job in a world in which they have not presented anything besides a stop-gap measure, months before a budget shutdown is on anyone’s radar, is ridiculous.”

Anthony said if House Republicans wanted the Senate to treat the House’s governmental shutdown prevention plan appropriations bills as the House budget, that could be done.

“We have nothing to go on based on our House Republican colleagues,” Anthony said. “If they want us to use the stop-gap measure from March, we can, but because they had $0 for the Department of Health and Human Services, that means that 100% of families in this state would no longer have Medicaid.”

During a press conference on Tuesday, Hall criticized the Senate budget for not being balanced based on the May CREC numbers.

Anthony explained that the Senate’s budget and the executive recommendation were based on the January Consensus Revenue Estimating Conference, which follows the normal budget process.

With rare exceptions, legislative chambers have passed a first version of budget bills by the this point in the year. Notable instances when that did not happen were 2020, when the COVID-19 pandemic essentially shut the Legislature down in the spring and most of the summer, and in 2009. In that year, majority House Democrats – in a widely lambasted move – opted not to pass a budget at all until the final budget cleared following a brief partial government shutdown on Oct. 1.

“We did our job. The Senate and the executive presented (budgets) based on the January numbers. They were balanced based on those numbers,” she said. “Now, we are in May, and we would, under normal circumstances, take the recommendations from the House, the Senate and the executive and then come up with budget targets that would be based on the latest numbers… It’s not a past practice to use May numbers to start the budget negotiations.”

Democrats also criticized Hall for playing political games.

“Folks are pulling power moves based off themselves and not about representing the people,” Rep. Donavan McKinney (D-Detroit) said. “This is not about people. This is about political games, and that’s what’s going on right now.”

Anthony called the actions of House Republicans irresponsible.

“It’s one thing to have political posturing in this building, but now it’s starting to hit township supervisors. Now, it’s starting to hit classrooms,” Anthony said. “People are starting to feel the anxiety. … Less of the political shenanigans, and more of the work on the budget that our people expect and deserve.”

Puri said many of the objectives Republicans have laid out for the budget, such as rolling back the income tax rate and funding roads without increasing revenue, were not mathematically possible long term.

“Every economic analysis that I have seen from independent agencies shows that you might be able to get away with that for a few months, maybe a year, but long terms, those things are not sustainable, especially if we are seeing economic data showing that things are softening and that we have uncertainty in terms of what our General Fund is going to look like in years to come,” he said.

Further, Puri said by rolling back the income tax rate, many Michigan residents would not see substantial savings, but the state would lose nearly a billion dollars.

“What it might do is help some big donors and the ultra-wealthy in Michigan save a couple of dollars,” Puri said. “I think it’s a question of priorities and values… and I don’t think that these cuts should fall on the backs of working Michiganders.”

Puri said there was a healthy dialog between House Democrats, the Senate and the executive branch.

“We are doing whatever we can to meet needs… to strategize with our partners,” he said. “The Michigan House can’t make public acts…we know that it’s important to make sure that meaningful legislation actually checks the boxes of every leg of this institution.”

Despite lower-than-expected revenues announced during the May Consensus Revenue Estimating Conference, House Speaker Matt Hall (R-Richland Township) said it is still possible to fund a $3 billion funding increase for roads and decrease the size of the state’s budget.

To that end, he proposed $326 million in cuts to the business attraction and community development fund, the entrepreneurship ecosystem fund, the COVID-19 task force, arts, and cultural grants and the Office of Global Michigan. He also suggested cutting 2,900 state employee positions, which he said aren’t currently filled.

During a press conference on Tuesday, Hall criticized the budget passed by the Democratic majority in the Senate.

“They passed a budget … that would put the state in nearly a $1 billion deficit, according to their own numbers,” he said. “If the government were to shut down, it’s because these people are proposing a budget that, by their own estimates, is a billion dollars in deficit.”

Hall noted that the Medicaid estimates the Senate used for its budget were under what came out of the May CREC and would create a $500 million shortfall.

“The Democrat budget in the Senate that they passed less than a week ago, based on the current numbers, would kick 60,000 people off Medicaid,” he said. “What we’re doing is we’re going through the budget line-by-line, looking for value for your tax dollars, and we’re going to make sure that all of these Michigan families get their Medicaid funding.”

Hall went on to argue for cuts to economic development programs, including $100 million from the Business Attraction and Community Development Fund, $15 million from the Entrepreneurship Ecosystem Fund, $22 million from the COVID-19 Task Force, $11 million for arts and culture grants, $28 million from the Office of Global Michigan, and $150 million from 2,900 “phantom employees,” which he described as vacant full-time positions created by the state.

“The Democrats, they’re going to say that we can’t make cuts. I’m showing you right here, these are very easy cuts – getting rid of the corporate welfare, getting rid of the COVID-19 Task Force, prioritizing roads over new festivals and barber shop quartets and glass blowing and ending the illegal alien subsidies and the other things, that Global Michigan does,” he said. “It’s very easy to do.”

Sen. Sarah Anthony (D-Lansing), chair of the Senate Appropriations Committee, said that the Senate built its budget off the January CREC numbers, which is the normal procedure for the House, the Senate and the governor’s office.

Typically, the May CREC numbers are used to develop targets and negotiate, Anthony said, but the House hasn’t presented a budget to work off of.

“He is trying to use the May numbers against our January numbers,” Anthony said. “If the only thing we have to point to from the House is the so called ‘government shut down prevention plan,’ the House is kicking every single person off Medicaid. Their numbers would eliminate Medicaid altogether.”

Last term, the Growing Michigan Together Population Growth Council developed recommendations for reversing the decades-long slowdown in population growth while also providing ideas for long-term funding plans for infrastructure and education. Much of the report focused on the state’s education system, with references to challenges including housing, transportation, placemaking, and infrastructure.

Hall, last year, said he agreed with the findings of the report. (See Gongwer Michigan Report, March 20, 2024).

On Tuesday, Hall said that the state still didn’t have a coordinated economic growth plan, so cutting these funds wouldn’t be a problem because there was no proof that they were working.

“What matters most… local roads? Or?” he said. “I simply would submit that. I think that when people campaign, they talk about fixing the local roads. We saw Gov. Whitmer do that. We saw many Republicans and Democrats do that. And I think fixing our local roads is a higher priority in a budget than funding barbershop quartets and the Lansing Capital Film Festivals.”

Hall said the budget should fund roads first, and if the public wants the other programs, then taxpayers could vote for politicians who would raise taxes.

“I think we need to put the money in there to fix our local roads,’” he said. “The taxpayers of Michigan are seeing this budget grow. It’s grown 43% under Gov. Whitmer … Somebody has to come in here, look through all the items, and look for value for the tax dollars and do something that they haven’t done here in a long time, which is set priorities.”

In the latest installment of her “road ahead” speaking tour, Gov. Gretchen Whitmer set a goal Wednesday to secure a semiconductor chip assembly plant in Michigan by next year – and said it’s time for lawmakers in Lansing to work on developing the next mechanism to attract companies and manufacturing to the state while she lobbies officials in Washington, D.C., for federal investments.

Whitmer’s remarks, given at Kettering University in Flint, outlined the history of manufacturing investments in the Saginaw Bay region and touted two newer developments that have landed in the area: SK Siltron’s silicon wafer plant in Bay City and the forthcoming Hemlock Semiconductor facility in Saginaw Township.

The governor said that while these projects represent companies on the supplier side of the semiconductor chip manufacturing process, she believes Michigan is the place to see a chip assembly plant – a “fab” – built.

“Today, I want to set an ambitious, attainable goal … by the end of next year, let’s secure a fab for Michigan. This would be a transformational, once-in-a-century investment. It would change the destiny of an entire region, making it an economic magnet for ambitious families to move here and put down roots. It’s exactly what we need,” Whitmer said. “I’ve been working on this for several years with state and federal partners. This year, I’ve already spoken to President Trump about a fab and will continue working with the administration’s new US Investment Accelerator to bring one home.”

The process of bringing a sizeable facility like this to Michigan – which involves “enough soil and rocks to fill 400 Olympic pools, bending more steel than the Mackinac Bridge, pouring a dozen times more cement than Ford Field, and laying more miles of cable than Michigan coastline” – would take about two years and could employ between 5,000-12,000 union construction workers, Whitmer said.

It would also require a mammoth effort and collaboration at the state and federal levels to bring a fab to the U.S., let alone to Michigan, when the majority of the world’s semiconductor chip assembly plants are in east Asia, particularly Taiwan, Japan, and mainland China. According to the Semiconductor Industry Association, the biggest U.S. hubs for already existing fabs are Texas, Arizona, New York, and California.

Whitmer is confident that her strategy of partnership with the federal government will pay off. Perhaps the more challenging needle to thread right now, though, is in her own backyard: convincing a divided Legislature to formulate and pass a new economic development strategy aimed at drawing tech and manufacturing giants to Michigan, particularly after recent disapproval on both sides of the aisle for the Strategic Outreach and Attraction Reserve, or SOAR, Fund.

“A lot of this depends on our ability to work with D.C., but there are actions we can take at the state level too. When companies bet on Michigan, they tend to cite our workforce, strong business environment, and natural resources. Our edge, especially right now, is our ability to provide certainty in the long term,” Whitmer said. “We have proven repeatedly that we can work together to get big things done. In the months ahead, let’s keep going. We’re not going to beat China by sitting on the sidelines. Let’s add more tools to our toolbox to bring jobs home and keep them here. There are some on the far left and the far right in Lansing who say we should unilaterally disarm. Just get rid of these tools and let those jobs go to Georgia, Kentucky, Arizona or, God forbid, Ohio. I say hell no.”

Developing and passing a plan to replace SOAR in the coming months will be tough for all parties involved, as divided government seems poised to drag out the budgetary process and only a small trickle of bills pass through both chambers of the Capitol. Nonetheless, Whitmer said it’s time to start brainstorming.

“We cannot sit on our hands while other states and countries without our manufacturing advantages pass us by,” she said. “No tool is going to be perfect, and I’m open to ideas for how to make them stronger, with more transparency, accountability, and protection for workers and taxpayers. This is about delivering a big win for Michigan, and I’ll work with legislators in both parties to get this done.”

Whitmer advised people who hope to see a chip fab brought to Michigan to reach out to their state and federal lawmakers and to “have spirited disagreements but keep rowing in the same direction.” In the meantime, she said she plans to keep up with the federal government relations strategy that’s so far yielded a new fighter mission at the Selfridge Air Base and a commitment from the president to building a lock and dam system to keep invasive carp out of Lake Michigan.

“I’ll continue lobbying federal officials to bet on Michigan,” Whitmer said. “We can play the long game with DC and win. Let’s do it again.”