LANSING — Michigan lawmakers have begun crafting their budget proposals for fiscal year 2027, which begins October 1, as they seek to avoid repeating last year's costly delay.
House and Senate Appropriations subcommittees have made their first moves Thursday, outlining areas where Republicans want to invest and where they'd like to cut. The Republican-controlled House plan totals $75.8 billion, significantly under Governor Gretchen Whitmer's $88 billion recommendation.
House Republicans are proposing a $600 million dollar reduction from this year's budget. They're targeting various line items they label as waste, fraud or abuse. Programs that would face cuts include arts and cultural programs, business attraction initiatives, DNR law enforcement, and various university funding.
"We went through every line and we looked at the last three years," Michigan House Speaker, Rep. Matt Hall of Richland Township, said. "We said how much did they spend on this line item last year the year before the year before that last three years and you pick the highest value in every one of those."
Hall said by doing this analysis, there is the ability to cut $2 billion from the budget. However, House Republicans did want to make investments in several areas, including $800 million for Medicaid, $100 million more for roads, and $150 million in literacy tutors.
In the Senate, the Appropriations Committee passed the first round of appropriations bills for several state departments. Sen. Sarah Anthony, D-Lansing, chairs the committee. She said the effort is keeping the Senate on track to deliver a 2027 state budget on time.
"With everyday costs at an all-time high and federal decisions continuing to wreak havoc on residents statewide, Michiganders are counting on us to craft a state budget that cuts through the chaos and provides the real relief they deserve," Anthony said. "From expanding access to scholarship programs, protecting our cherished natural resources, and taking steps to lower auto insurance and utility costs for Michiganders, we've taken a solid first step today — but we've got more work to do."
Bills passed out of the Senate Appropriations Committee today would set the 2027 fiscal year state budgets for the Departments of Agriculture and Rural Development, the Department of Natural Resources, the Department of Environment Great Lakes and Energy, the Department of Transportation, the Department of Licensing and Regulatory Affairs, the Department of Insurance and Financial Services, and agencies overseeing universities and community colleges.
Both chambers have ruled out new taxes. Senate Committee Chair Anthony said revenue is tighter this year but she hopes to adopt a balanced budget — which is required under the state constitution — without raising taxes.
"Folks are hurting right now, and so for us to start the conversation right now with new taxes doesn't seem to be a place where our members want to start," Anthony said. She acknowledged lawmakers will have to adjust to meet conditions, including accounting for extreme weather patterns and natural disasters.
House Speaker Matt Hall also said new taxes are off the table — and so is dipping into the state's rainy day savings, which was part of Governor Whitmer's 2026 budget rollout. "We're proposing an investment of $300 million in the rainy day fund," he said. "This is not a rainy day."
Nevertheless, budget crafters have a lot less money to work with than initially anticipated, according to official revenue estimates. That will make the job tougher than last year, when the Legislature blew past both the July 1 deadline set in state law as well as the October 1 start of the fiscal year.
Whitmer signed a finalized budget seven days past that deadline after the Legislature adopted an extension. Hopes are that will not happen for a second year in a row.
"We look forward to working with our legislative partners to pass a fiscal year 2027 budget by July 1 that lowers costs, ensures our kids can succeed, and protects Medicaid," said Lauren Leeds, spokesperson for the State Budget Office.