May 9, 2025 | This Week in Government: Senate Approps Moves Budget Bills to Full Chamber

The Senate Appropriations Committee took just over an hour on Tuesday to report 20 budget bills containing more than $83 billion in proposed spending, setting the table for an as-yet undetermined date to begin floor votes.

Between the Senate budget bills, total spending was about $83.7 billion, not counting the $446.6 million contained in a fiscal year 2024-25 budget supplemental.

The Senate’s recommendations were slightly above the $83.5 billion in the governor’s fiscal year 2025-26 budget proposal.

Sen. Sarah Anthony (D-Lansing), the committee chair, commended subcommittee chairs and minority vice chairs for working well together and encouraged that spirit of collaboration to continue.

“I believe it is up to us in the Senate to not only be very deliberative, but work together with a spirit of civility,” Anthony said. “In the weeks and months to come, I’d just encourage all of us to lead with that, to lead with civility, to lead with respect for each other and for our priorities.”

Sen. Jon Bumstead (R-North Muskegon), the minority vice chair of the Senate Appropriations Committee, told reporters he believed there are many items in the budget that both parties can agree on, but that it will take continued work to hammer out a final product and then find consensus with the House.

“I think residents of Michigan want to see something done sooner than later, instead of dragging it out into October,” Bumstead said, adding he would love to see the budget completed by July.

He said he could understand the House prioritizing road and infrastructure funding rather than economic development incentives, which have been a major focus in recent years. Bumstead said he personally is fine with looking at proposals in the budget if they are specific infrastructure needs rather than handing out incentives to large companies.

Most of the budget bills were reported 12-6 along party lines, those being for the departments of Lifelong Education, Advancement and Potential (SB 164); Education (SB 165); Military and Veterans Affairs (SB 175); State Police (SB 176); Licensing and Regulatory Affairs (SB 177); Insurance and Financial Services (SB 178); Labor and Economic Opportunity (SB 179); Health and Human Services (SB 180) and Environment, Great Lakes and Energy (SB 181).

Members also voted along party lines for the budgets covering school aid (SB 166), higher education (SB 167), community colleges (SB 168) and the judiciary branch (SB 170).

The votes for the Department of Corrections budget (SB 169) and general government (SB 173) were 11-6, with Sen. Sylvia Santana (D-Detroit) abstaining.

Bumstead abstained on SB 174, the Department of Transportation budget, which was reported 12-5.

The vote on SB 163, the capital outlay budget, was 12-4, with Sen. John Damoose (R-Harbor Springs) and Sen, Mark Huizenga (R-Walker) abstaining among the Republicans, while the 12-4 vote on SB 171, the Department of Agriculture and Rural Development budget, saw Damoose and Bumstead abstain.

Bumstead was the lone crossover vote on the Department of Natural Resources budget (SB 172), which was reported 13-5.

For (SB 165), an amendment that would provide additional funding for libraries was adopted prior to being reported.

For the MDOC budget, an amendment was adopted that added boilerplate language that would authorize expenditures for the expansion of the State Police pension system. An ongoing lawsuit over the pension expansion must first conclude before proposed funding in the budget would be available for spending.

A total of $15 million for dam safety was added via amendment to the DNR budget prior to being reported.

Multiple other amendments brought before the committee, mostly technical changes, were also adopted for several budget bills.

This left SB 184, a $446.6 million ($101.3 million General Fund) fiscal year 2024-25 supplemental appropriations bill, which was reported 11-1. The lone vote against the bill was Sen. Thomas Albert (R-Lowell). Santana joined Bumstead, Damoose, Huizenga, Sen. Rick Outman (R-Six Lakes), and Sen. Lana Theis (R-Brighton) in abstaining.

DHHS would see the largest amount within the supplemental, about $211 million ($78.5 million General Fund). Of that, $81.6 million would go toward disproportionate share hospital disallowance penalty costs. Another $61 million would cover federal coronavirus epidemiology and laboratory capacity.

A total of $130.2 million ($15.9 million General Fund) would be for LEO, with $43.6 million being for community develop block grants for disaster recovery. Another $35.8 million would be for siting and economic development and $22.6 million would go toward a community a worker economic transition office.

The supplemental also contains $41.8 million for capital outlay projects.

Funding to EGLE totaled ($27.1 million), with the main items being $15 million for brownfield redevelopment and cleanup, as well as $7.5 million for the Great Lakes Restoration Initiative.

Also receiving funding under the supplemental would be DNR ($11 million), DMVA ($4.5 million), LARA ($3.1 million), MiLEAP ($1 million), MDARD ($1 million), and the judiciary ($428,300).

During a Wednesday afternoon press conference, House Speaker Matt Hall (R-Richland Township) talked about the timing of the House’s budget process, saying the chamber would take its time moving bills.

“We’re not just tacking on 3% on the top of what we did last year,” he said. “We’re evaluating every program in the budget for return on investment.”

The Senate has already moved its budget bills to the floor.

Hall said that he intended for next fiscal year’s budget to be smaller than the current fiscal year’s budget.

“If we’re going to fit in roads, and the income tax and all the things that we need to do to get the value for your dollar, we’ve got to evaluate every earmark that we do,” he said.

Hall declined to commit to passing a full School Aid Fund Budget prior to July 1.

“You’ll see we’re working on an education plan, and K-12 plan, but I’m not going to commit to that. … We’re dealing with a non-serious group of people,” he said, referring to Democrats in the Legislature.

The Senate’s budget is bigger than Gov. Gretchen Whitmer‘s executive recommendation, Hall said, and the House has no intention of approving a budget increase.

Although he acknowledged the Senate has started moving budget bills, Hall said the Senate was not being thorough in the process.

“You’re going to see us do a lot of really good things in the budget,” Hall said. “We just have to fund the best programs … and that takes a little longer than just tacking on 3%, and that’s what they’ve always done.”

Hall made the argument that the only obligation the House had to pass a budget was that the state’s money would run out.

“Some people tell me there’s not a constitutional obligation to do it, but there’s an obligation because the money will run out,” he said. “There’s a lot of activity in the House, and we’re working on a lot of really important things.”

The House’s process would be more transparent and more thorough, Hall said.

“That’s going to take a little longer, but you’re going to get a much better product,” he said. “If we just do it really fast, it’s going to look the way it’s always done.”

School districts seeking voter approval for tax increases to fund new and renovated school buildings had a rough night Tuesday, when voters rejected more than half the proposals.

There were 45 total bond proposals on the ballot across the state. A Gongwer News Service analysis of election results showed of the 42 proposals with results available, 21 passed and 21 failed.

It wasn’t just rural districts that rejected property tax hikes to pay for new and improved school buildings. In recent years, urban and suburban districts have tended to pass such proposals while rural ones have not.

On Tuesday, voters in the Lamphere Schools in Madison Heights, Midland Public Schools, and Mount Clemens Community School District all rejected bond proposals.

The Midland rejection was especially overwhelming as voters torpedoed the $285 million proposal by a more than two-to-one margin. That was the largest bond proposal in the state. Mount Clemens was the fifth largest. Also failing were the sixth, seventh, and eighth largest proposals (Allendale Public Schools, Reed City Area Public Schools, and the Fruitport Community Schools).

Some of the largest proposals did pass: Dexter Community Schools at $241.8 million and Ferndale Public Schools at $114.8 million (editor’s note: this story has been changed to remove an incorrect reference to the bond proposal in the St. Johns Public Schools).

The other mechanism school districts seek, sinking funds to help pay for maintenance, security, transportation and other needs, didn’t do much better. Four passed and three failed.

There were relatively few municipal property tax increases on the ballot, just 16. Those had a checkered night as well, with nine passing and seven failing. A handful of proposals are still outstanding.

On parks and recreation, one passed and one failed. Of the nine public safety proposals seeking increases with results, six passed and three failed. Both proposed road millage increases failed. Both proposed new millages for senior services passed.

Renewals, as usual, cruised. Fifty-four of 56 renewals passed across all categories.

Gongwer’s Millage Monitor provides a detailed look at results. It’s sortable by category and does the math for you.

It will be updated Wednesday to reflect remaining results that were outstanding early Wednesday morning.

An executive directive from Gov. Gretchen Whitmer to examine the impact of potential cuts to Medicaid in the federal budget has yielded its first results: a report which estimates more than 700,000 Michigan residents could lose health care coverage if parts of congressional Republicans’ spending plan is implemented.

The report estimates the effect several different major Medicaid policy changes would have on Michigan, including reducing federal matching rates, reforming provider taxes, changes to per-capita, and block grant funding and altering work requirements.

In a Wednesday statement, Whitmer said the findings of the report are “alarming” and demonstrate the dangers of slashing Medicaid via the federal budget process. A budget proposal currently before Congress seeks to eliminate $880 billion in federal spending, which analysts have said is impossible to do without significant cuts to Medicaid.

Tuesday evening, U.S. Speaker of the House Mike Johnson told reporters that his caucus has ruled out lowering the amount the federal government pays states to care for working-age adults who became eligible for the program through the Affordable Care Act’s Medicaid expansion, which was one of the most aggressive approaches proposed to trim down Medicaid funding.

Other pathways for cuts are still on the table, though, as budget negotiations continue, and Whitmer said the report illustrates the devastating impact federal spending reductions could have on “a lifeline to 2.6 million Michiganders.”

“More than 700,000 Michiganders including people fighting cancer, seniors in nursing homes, new moms, veterans, kids, and those living with disabilities could lose their health care,” Whitmer said. “Michiganders will suffer because these proposed cuts go too far, too fast, and everyone, including those not on Medicaid, will end up paying more for their insurance. Republicans in Congress cannot let this happen. I am grateful to MDHHS for their report, and I look forward to continuing to work together to make sure that everyone gets the care they need.”

The research in the report, conducted by the Department of Health and Human Services, estimates that a reduction in federal matching rates for Medicaid would equate to a $1.1 billion annual loss for the state’s budget, costing roughly 30% of Michigan’s beneficiaries their health care coverage.

DHHS researchers also found that if Congress decides to reform provider taxes, Michigan could see a $2.3 billion decrease in payments to hospitals and upwards of $325 million less in payments to nursing homes.

“Because Medicaid typically reimburses at lower rates than both commercial insurance and Medicare, it can be challenging for providers to serve a large Medicaid population without supplementary revenue,” the report said. “To address this, states often seek federal approval to use provider taxes to enhance Medicaid funding. Payments to providers are generally tied to the volume of Medicaid patients they serve, with those serving more beneficiaries receiving greater reimbursement – creating an incentive to maintain or expand access for Medicaid enrollees.”

Reductions in those provider taxes, DHHS said, would not only weaken the state’s ability to draw down federal funds but could also “destabilize hospital finances, particularly in rural and safety-net facilities, and increase the risk of service cuts or closures.”

“The hospital provider tax has long served as a cost-effective tool that allows the state to maximize federal support without increasing general fund spending,” the report said.

Another avenue congressional Republicans could take to reduce Medicaid spending is reinstating work requirements for benefits – which Whitmer’s office referred to as “terminating health care coverage for Michiganders who are too sick to work.” Prior to a court ruling which halted the implementation of work requirements in 2020 after former Gov. Rick Snyder signed them into law in 2018, the process of reinstating the requirement would have totaled nearly $70 million in administrative costs.

Now, the report said, the price tag to administer the reporting requirements program would cost taxpayers an additional $75 million to $155 million each year. A change capping per-capita funding or institution of block grants, DHHS said, would result in a loss of $4.1 billion to $13.4 billion in federal funds over the next decade.

Although per capita caps or block grants aren’t among the approaches that have been discussed publicly by members of Congress during the budget process, the report notes they were supported in the Heritage Foundation’s Project 2025 and the fiscal year 2025 Republican study committee budget plan as cost-saving measures.

Regardless of the form any Medicaid cuts might take, DHHS Director Elizabeth Hertel said they’re likely to have a disproportionate effect on rural or already underserved areas of the state.

“These cuts will impact health care services for all Michigan families – whether they have Medicaid or commercial insurance – and small town and rural communities are likely to be disproportionally affected,” Hertel said in a statement. “Medicaid patients make up an average of 22% of hospital patient volume and the loss of funding under these proposals will cause rural hospital closures and loss of providers. Studies show a lack of access to health care can lead to higher mortality rates, worse health outcomes, increased health disparities, and strain the state’s emergency care system.”

The state’s prison population and recidivism rate continue to decrease last year, the Department of Corrections announced Wednesday.

Overall, the prison population declined by 208 prisoners to 32,778, a 0.6% reduction through the end of 2024. The main drivers in the population decrease were less prison intake and more movements to parole.

The department projects the prison population will continue to decline through 2029.

“I’m proud of each and every member of our department who has impacted and motivated those in our custody to become successful, productive members of our communities,” Corrections Director Heidi Washington said in a statement. “This report shows our evidence-based practices are working, as total population and recidivism rate numbers continue to remain at historic lows.”

Intake decline was the largest contributor and was the first decrease since the pandemic-related recovery in 2021, a report from Corrections said.

The state also saw its first significant increase in paroles since 2016 as the result of more prisoners being eligible after years of increased intake. Paroles increased 5.7% from 2023 to 2024. The department said this shows the Parole Board has granted more requests for parole and reentry efforts have been successful as the overall population remains low.

The parole population has decreased 60% since its 2009 peak and the probation population has decreased nearly 46% since its 2010 peak, the department said.

Parole violator technical returns to prison remained flat for the third consecutive year along with parole violators returning to prison with new sentences. Violations are down 7.1% from 2023 and probation violators being sentenced to prison is down 72% from 2002.

The recidivism rate – the measure of those returning to prison with new sentences – was 22.7%. That’s flat compared to 2023 but follows two years of decline.

“These tremendous figures prove the impact MDOC is having on enhancing public safety in our communities,” Russ Marlan, deputy director of field operations administration, said in a statement. “What we are doing is working – implementing evidence-based practices and focusing on helping people become successful contributors to society is the best way to improve public safety in the long-term.”