Aug. 15, 2025 | This Week in Government: Michigan Education in Dire Straits, Should Be a Budget Priority

A coalition of business leaders is asking lawmakers to continue prioritizing education amid the ongoing budget stalemate.

“To put it in stark terms, when it comes to educational outcomes, Michigan is in dire straits,” the letter said. “Without a significant long-term educational investment and strategy that transcends election results, our state, businesses and students will continue to fall further behind.”

The letter, which comes more than a month after the statutory budget deadline, was signed by the Detroit Regional Chamber, the Small Business Association of Michigan, the Michigan Manufacturing Association, and Talent First and sent to the quadrant leaders in the House and Senate, as well as the House Appropriations Committee  and the Senate Appropriations Committee.

Related | Chamber Urges Lawmakers to Pass Results-centered Education Budget

It outlines several business community priorities that are intended to “strengthen the talent pipeline from K-12 to pos-high school education.”

Among those priorities are continuing the goal of achieving 60% educational attainment by 2030, an effort to improve third grade reading and math scores, increased funding for the Michigan Achievement Scholarship and incentivizing dual enrollment and employer-led apprenticeship programs.

Another priority was improving the culture of valuing education in Michigan by emphasizing the importance of “K-12 + 2.” Part of that, the letter said, is making continued education tuition-free through strategic investments.

Finally, business leaders recommended raising awareness around the Michigan Achievement Scholarship and Michigan Reconnect to make college more accessible and affordable.

The letter underscores the need for Michigan to invest in education to stay competitive, both nationally and globally.

“There is not longer any such thing as a prosperous state that is not also highly educated,” the letter said. “In light of that reality, our concern is growing as Michigan continues to rank toward the bottom of the nation in may key educational metrics.”

Michigan taxpayers will receive on average a $3,151 federal tax cut under the One Big Beautiful Bill Act in 2026, a new analysis from the Tax Foundation found.

The federal law signed last month makes the most substantial changes to federal tax policy since the 2017 Tax Cuts and Jobs Act by providing additional tax cuts to individuals and businesses on top of the 2017 law, including new deductions for tipped and overtime income, an expanded child tax credit and standard deduction as well as an 100% bonus depreciation and domestic research and development expensing.

The average tax cut is expected to fall to $2,342 by 2030, as certain changes like deductions for tips and overtime income expire, before increasing to $3,033 in 2035 as inflation increases the nominal value of the permanent tax cuts, the analysis showed.

At the state level, House Speaker Matt Hall, R-Richland Township, said Wednesday that he hopes to make changes to state tax policy to complement the One Big Beautiful Bill Act.

“My position is that we should magnify the tax cuts in the One Big Beautiful Bill,” he said. “The One Big Beautiful Bill presents an opportunity to eliminate tax on Social Security, tax on overtime, tax on tips.”

Hall said because of the changes made by the federal government he was moving away from his earlier proposal of lowering the personal income tax.

“What I’m focusing on now, the recommendation I’m making, is let’s ensure that we amplify the One Big Beautiful Bill tax cuts,” he said.

The tax changes will be part of House Republicans budget proposal, Hall said, though he did not say when the House would be presenting its budget.

The statutory deadline for the state budget was July 1. Hall has repeatedly said it was necessary to wait on the budget because of the changes imposed at the federal level.

Recently, the House Fiscal Agency said the federal budget bill could result in a $677 million reduction in revenue for the upcoming 2025-26 fiscal year and the Citizens Research Council of Michigan said it could lead to a $1.1 billion hole.

Senate Democrats on Wednesday asserted again that House Speaker Matt Hall and his Republican caucus are delaying action on negotiating a budget, saying their actions are hurting the state’s schools and creating uncertainty ahead of the upcoming new school year.

Hall, in a competing press conference, sought to refute Democratic claims, accusing the Senate of having a faulty budget that needs to be reworked before serious negotiations can begin. He defended his accusation by saying the Senate Democrats based their budget on January revenue estimates, though that is a common practice.

Senate Majority Leader Winnie Brinks, D-Grand Rapids, also told reporters she and Hall, R-Richland Township, had not spoken one-on-one in a month. Hall, however, doubled down on claims that there have been more regular conversations between leadership than is publicly known.

The ongoing blame game between the divided Legislature continued Wednesday with only 48 days remaining before the September 30 budget deadline.

“Given the track record that we’ve seen from House Republicans, I am concerned,” Brinks said when asked if she has concerns over a potential state government shutdown. “We should have been doing all of this together as a Legislature months ago. It’s not that it’s impossible to get it done, but the clock is ticking, and there is a sense of urgency around it, and it’s simply not responsible to delay any longer.”

Separately, Senate Appropriations Committee Chair Sen. Sarah Anthony, D-Lansing, told reporters both sides to get to the table and begin serious negotiations given the fallout of federal funding changes expected to reduce revenue.

“I don’t want to say we’re gearing up for a shutdown, because that has real impacts on state employees and on the individuals and organizations that rely on the state’s budget,” Anthony said. “I’m still here, ready to work and motivated, but we always have to look at contingency plans if that happens.”

She added that there have been conversations over the summer recess between herself and her staff and House Appropriations Committee Chair Rep. Ann Bollin, R-Brighton, and Bollin’s staff on general issues.

The senator referred to when she was a legislative staffer for a previous Appropriations chair during government shutdowns in the 2000s. She said it was a rough time for state employees, who were unsure if they would be receiving their paychecks.

“Whether we’re talking about a shutdown for a number of days or weeks or even a few hours, the anxiety is real,” Anthony said.

Anthony spoke to reporters after her committee heard testimony from Department of Health and Human Services officials and several health care, business and policy organizations on the effects of the federal budget bill signed into law on July 4.

The federal law changes are estimated to lead to significant revenue shortages for the fiscal year 2025-26 budget, which the House Fiscal Agency put at $677 million and the Citizens Research Council of Michigan put at more than $1 billion (See Gongwer Michigan Report, July 30, 2025).

Senate Democrats who joined Brinks on Wednesday described the budget impasse as embarrassing, laying the blame at the feet of Hall and his caucus. They said they stand ready to negotiate and that the lack of movement by Republicans is causing uncertainty for schools and prompting cuts to programs including the free school meals programs over funding concerns.

Hall continued to blame the Democrats.

“The one thing that would break the logjam is a Senate Democrats roads plan,” Hall said. “Gov. Whitmer wants to do it. I want to do it. Senate Democrats will put a plan on the table soon. … We want a roads deal. We want to set priorities on the budget.”

Sen. Darrin Camilleri, D-Trenton, chair of the Senate Appropriations PreK-12 Subcommittee, said the Senate education budget proposal as passed is balanced and could quickly be passed if House Republicans were to come to the table and hammer out a compromise on differences.

“The sad reality is, however, is that Speaker Matt Hall has no interest in doing what’s right for the residents of our state,” Camilleri said.

Camilleri took further aim at Hall, saying he “is losing respect daily in Lansing and across Michigan.”

“It’s pretty embarrassing that we’re in this situation,” Camilleri said. “If you acted like this at any other job, your boss would put you on a performance improvement plan. But because he’s in a position of power and we are in politics, he thinks his obstruction and arrogance will be rewarded. We cannot let that happen.”

Sen. Dayna Polehanki, D-Livonia, said school districts are already discontinuing free school meals programs and other programs due to budget uncertainty.

“Matt Hall’s inaction and the complacency of his caucus are impacting more than just the school meals program,” Polehanki said. “Funding for critical student services like mental health supports, school safety, career, tech education, and so much more is stuck in limbo, leaving our schools and students in a lurch.”

Sen. Jeff Irwin, D-Ann Arbor, pointed out that the House has not yet passed its budget proposal.

“He’s been unwilling to show us the math of how this budget actually looks,” Irwin said. “How can we move forward on getting a final budget when they won’t even take the first step?”

Brinks also disputed an oft-used claim by Hall that the governor and Brinks are at serious odds over the budget and a road funding plan.

“He is eager to try to give the impression that there’s a wedge between the Democrats in the Legislature and the governor. This is simply not the case,” Brinks said. “We have far more in common than and small differences of opinion that might come up, and we have proven that we can work through that in a very productive way over the last two budget cycles, and we’ll continue to do that as the need arises.”

The Senate moved a handful of House bills on Wednesday, which Hall said was a good sign.

“They’re moving our bills, which is what they should have done all along,” Hall said.

Despite action from the Senate on House bills, Hall said he did not intend to move Senate bills.

“We’re moving the bills that are ready to go, and their bills are not ready to go,” he said.

Hall said House Republicans continued to take their time on the budget.

“It’s like the Democrats’ heads are exploding when you try to explain to them we’re not going to do the same thing that you guys have always done up here, and just tack on 4%,” Hall said “We’re going to look at these budgets, we’re going to eliminate waste, fraud and abuse, and we’re going to get value for your tax dollars.”

When asked whether the Legislature can fund its top priorities in an upcoming budget deal, Anthony said Republicans need to come to the table so that the give-and-take of negotiations can occur to best meet the state’s needs.

“We can find a way to address some of these drastic cuts,” she said. “But the first step is to actually start negotiating.”

House Speaker Matt Hall said it was necessary to rewrite the state’s energy laws with the changes to solar and wind credits during his appearance on this week’s “Off the Record” from WKAR.

“We’re going to have to rewrite this energy law, because we need an affordable and reliable energy grid, and Brian BeGole right now is taking a look at those energy bills,” Hall, R-Richland Township, said.

Hall continued to skirt questions on removing all the bills from the House Energy Committee  after the chair, Rep. Pauline Wendzel, R-Watervliet, failed to attend session on July 24.

“Brian BeGole is going to do a great job, analyzing some of those energy bills and helping us get to a solution,” he said of Rep. Brian BeGole, R-Perry, who chairs the House Government Operations Committee where the bills were moved.

Hall would not say whether more bills would be referred to the Energy Committee, but he said he felt there was an urgency to rewrite the state’s energy law.

He also discussed the continued dysfunction within the House and the Legislature, speaking about the failed vote to ban cell phones from schools late last month.

“We put it up for a vote. This was a big priority of Gov. Whitmer. We told the Democrats, this is your one chance to vote on this bill,” Hall said. “Every single Democrat voted against it. They voted against Gov. Whitmer.”

Hall said he did not intend to vote on the cell phone ban again this year.

“Democrats should own their vote,” he said. “Democrats are putting politics ahead of our kids. Our kids are going to suffer when they have cell phones in the classroom, and they’re not learning anymore. Our education scores and math scores will continue to suffer as a result.”

Hall said that cell phone bill should have been an issue that Democrats and Republicans were able to work on together. Sen. Dayne Polehanki, D-Livonia, has another version of the policy, SB 234, which passed the Senate 28-9 in May and awaits action in the House.

“What was saw there was legislative Democrats blow it up,” Hall said. “What I was trying to do here was set a tone of bipartisan negotiations. … I looked at every bill that we had sitting in the House, this was the one that was most ready to go.”

That vote has set the tone for the state of budget negotiations, Hall said.

Hall continued to hedge on a deadline for the budget.

“When you’re really trying to find value for your dollars and you’re really trying to make smart and thoughtful cuts to this budget in order to fund things like roads and set better priorities for state government, it takes more time, and that’s what we’re doing,” Hall said. “We’re really going through this, looking at each line item, finding the waste, fraud, and abuse.”

He did not specify what type of waste, fraud, and abuse was being found in the budget.

“When our budget comes out very soon, it’s really going to be a perfect budget,” he said.

Hall again faulted Democrats for walking away from negotiations on July 1 for the lack of an education budget.

“We’ve seen a pattern of this,” Hall said. “What I’m looking for are Democrat leaders that are going to support Gov. Whitmer, not tank her ideas. And you saw Gov. Whitmer come out and say, ‘There’s no budget without a roads fix.’ Her and I are unified on that issue. We’re looking for Democrats to support her on this.”

He also suggested that Rep. Joe Tate, D-Detroit, might be a better leader for House Democrats again, now that he is not running for U.S. Senate.

“I’m looking for a handful of House Democrats that will stand up to the radical left that will support their governor, reach their hand across the aisle, and work with us,” Hall said. “Maybe (Tate) can be the leader.”

Gov. Gretchen Whitmer reaffirmed her interest Monday in having a road and infrastructure funding deal completed alongside the upcoming fiscal year budget, calling the two connected in comments to reporters.

“The budget’s not done unless roads are done, too,” Whitmer said.

Her comments came when asked by reporters about the status of the fiscal year 2025-26 budget and whether a roads deal should be part of final budget negotiations.

The development of a long-term road funding plan returned to being a top priority late last year as initial negotiations began but were unsuccessful during the lame duck session.

House Speaker Matt Hall, R-Richland Township, early this year released a $3.1 billion road funding plan that would use existing funds. Whitmer released a $3 billion plan that would raise new revenues including through cannabis taxes and a potential increase in the Corporate Income Tax.

Senate Democrats have not released a specific plan of their own.

Hall and Whitmer earlier this year were more aligned on negotiating a road funding plan along with an education budget ahead of the summer legislative recess. Senate Majority Leader Winnie Brinks, D-Grand Rapids, and Senate Democrats were opposed, saying they wanted to negotiate on roads with the entire budget at the same time.

The Legislature left town July 1 without being anywhere close to an agreement on a fiscal year 2025-26 budget.

Since then, there has been finger-pointing from both parties, accusing the other of obstructing the process and of refusals to begin serious negotiations.

An affiliate of the Democratic Governors Association has also taken to pushing digital ads calling on the public to tell their state senators to support the governor’s road funding plan (See Gongwer Michigan Report, July 8, 2025).

Last month, Hall removed Rep. Alabas Farhat, D-Dearborn, the Democratic minority vice-chair on the House Appropriations Committee from his role, angering Democrats.

House Republicans have said they are purposely moving slowly to allow for a transparent budget process, to which House Democrats have said the speaker’s office has been obstructing.

The Legislature and governor are now faced with the Oct. 1 beginning of the new fiscal year seemingly far apart on a budget and any possible road funding plan.

Ahead of final budget negotiations, the State Budget Office has directed state agencies and departments to develop budget contingency proposals with cuts of around 15% (See Gongwer Michigan Report, July 23, 2025).

“I hate to say it, but you’ve always got to have that preparation, even when budgets are done early,” Whitmer said when asked Monday about the possibility of a state government shutdown. “I think every responsible governor has to think about all the different potential contingencies. That said, we are not even close to the deadline yet.”

Whitmer added that “we’re having a lot of meetings in Lansing” on the budget.

“You don’t necessarily see it, but there’s a lot of conversations going on,” Whitmer said, without providing specifics on who is meeting or how often. “I remain committed to, and optimistic, we’ll get them done on time.”

Also on Monday, the American Council of Engineering Companies of Michigan announced the kickoff of a grassroots effort to encourage a bipartisan legislative solution to Michigan’s road funding crisis by connecting thousands of motorists with their state legislators.

The group wants to encourage lawmakers “to stay at the bargaining table until a final compromise deal is hammered out as soon as possible.”

“A long-term road funding plan is the kind of investment lawmakers should be focusing on for the sake of all Michiganders,” Ron Brenke, executive director of the group, said in a statement. “Every time a child safely reaches their school or a worker gets to their job on time, good roads are quietly making life better for Michigan families.”