Senate Budget Vote Sets Up Political Battle Over State Spending
The Michigan Senate voted Wednesday to approve an $88.1 billion budget proposal for fiscal year 2027, creating a significant gap with the Republican-controlled House that has passed a $76 billion plan. The Senate Appropriations Committee Chair Sarah Anthony (D-Lansing) said the vote came after federal cuts under the One Big Beautiful Bill Act have forced Michigan to take on more costs for Medicaid and food assistance.
The Senate plan includes around $63 billion in spending for state departments, with the full proposal $12 billion more in state spending than the House plan. Unlike the House proposal that would cut the budget, the Senate plan would raise spending. This decision caused Senate Republicans to speak against the bill ahead of the Wednesday vote.
That One Big Beautiful Bill has had a significant impact on our balance sheet and so I dont think we can waste a ton of time, Anthony told reporters.
The bill covers several key areas including free school meals, affordable housing, and the social safety net. Anthony said she was proud of the money the plan puts toward these programs. The Senate plan also includes additional funding to upgrade Selfridge Air National Guard Base, a move supporters say will protect local jobs.
State Senator Thomas Albert (R-Lowell) criticized the Democratic-led Senate proposal, saying it would spend money in the wrong places. He said the plan should not add more state employees, raise hunting and fishing fees, or send more money to local governments.
When government uses one-time spending to expand programs that continue every year, it builds an annual budget problem and breeds uncertainty and instability, Albert said.
Albert also criticized the use of the state rainy-day fund in the broader budget proposal. He said using state savings is unwise because it leaves fewer resources available if Michigan faces a financial emergency in the future.
A proposed budget supplemental for the current fiscal year suggests putting $200 million in rainy-day funding toward Medicaid, and another $150 million toward dealing with the effects of federal cuts. Anthony said making these difficult choices was necessary to address the impacts of federal government actions.
We are not doing that lightly. We did not want the rainy-day fund to address any and everything in the state budget. Making sure we are addressing those impacts of the federal government were our intentions, Anthony said.
The Senate fiscal year 2027 plan adds up to right around what Governor Gretchen Whitmer proposed spending. The governors proposal included possibly raising taxes on nicotine products, online gambling, and digital advertising. Senators rejected these proposed sin taxes, instead shifting existing dollars to cover Medicaid costs.
The Michigan House Speaker has also proposed his own tax increases, including on services which he said would allow for lower property taxes and other savings. Anthony, however, said talks over how to raise revenue could come later.
When we talk to people across the state, people are hurting right now. So we did not want to start negotiations talking about raising taxes. That feels a little tone deaf when folks are worried about whether their healthcare will be addressed or whether they can put food on the table, Anthony said.
The constitutional deadline for the budget is Oct. 1, when the new fiscal year starts. The statutory deadline in state law is set for July 1 to give schools time to plan for the year. There is no legal penalty if the July 1 deadline is not met.
A final version of the state budget will likely look very different from the Senate, House, or governor current proposals. Talks are expected to ramp up in the coming weeks as the Senate plan now heads into negotiations with the Republican-controlled House.