House GOP Budget Would Slash University Funding by 62%

LANSING, Mich. — The Michigan House of Representatives approved a $76 billion state budget plan on Wednesday night, setting the stage for negotiations with Democrat-led Senate and Gov. Gretchen Whitmer's office. The Republican-backed proposal would significantly reduce funding for the University of Michigan and Michigan State University.

House Republicans hailed their budget as being focused on fiscal discipline and affordability. The plan proposes cuts across nearly every state department, including more than half of the funding for the Department of Environment, Great Lakes and Energy.

"We found $2 billion in savings, enabling us to close an $800 million funding shortfall," said House Appropriations Committee Chair Rep. Ann Bollin, R-Brighton.

Universities Face Steep Cuts

The House budget would slash funding for Michigan's two flagship universities by a combined 62%. That amounts to a $222 million reduction for the University of Michigan and a $199 million cut for Michigan State University.

"These cuts will raise tuition," said Rep. Jason Morgan, D-Ann Arbor. "This budget practically asks students to leave. It asks talented researchers and entrepreneurs to leave, meaning fewer of them will build their lives and invest in our great state."

Chris Kolb, vice president for government relations at the University of Michigan, called the proposal "shortsighted and harmful." He wrote in an email that cuts of this magnitude would "have real consequences for tens of thousands of students, including making it harder to keep U-M tuition affordable, and could impact approximately 68,000 jobs supported directly by our two flagship public universities."

Ghost Employees and Unspent Funds

Much of the House budget's spending cuts target what Speaker Matt Hall, R-Richland Township, calls unfilled state jobs and allegedly unspent money previously allocated to state departments.

"We're able to cut $2 billion from this budget without cutting anything except for the ghost employees and the money they're not spending," Hall said after the votes cleared.

Bollin and Hall both touted attempts to eliminate more than 3,300 "ghost employee" positions, although fact that state departments have named more full-time equivalent employee positions than hired workers does not mean departments are squirreling away funding.

The House Fiscal Agency prepared an analysis showing close to $320 million in gross funding cuts for information technology projects across state departments. The Department of State would see 15% in cuts, while the Department of Technology, Management and Budget would face 24% in reductions.

Senate Democrats Offer Alternative Plan

Hours after the House votes, Democrat-controlled Senate advanced their own final funding bills for a vote. Senate Appropriations Committee Chair Sen. Sarah Anthony, D-Lansing, said their budget would not raise taxes and would focus on health, safety, food access, and educational opportunities.

"We have decided not to raise taxes in our recommendations, we've decided to also not try to cut our way to a balanced budget," Anthony said. "Our budget is sustainable. It is structurally sound, and we wanted to make sure we weren't looking for reductions that would harm real Michiganders."

The Senate is likely to vote on their budget bills next week. That means the legislature is moving much quicker than last year, when the budget was passed after the October deadline.

Medicaid Funding and Tax Disputes

Whitmer had proposed about $800 million in new taxes on nicotine products, online betting and internet ads to boost Medicaid funding. That did not make it into the House budget, nor have Democrats in the Senate included them in their drafts.

Hall anticipated the fight over Medicaid funding would be a high priority in budget negotiations. The House doubled the department's assumption of $150 million in cost savings from unspecified efficiencies to $300 million, arguing it would force the department to "eliminate the fraud in Medicaid."

The House budget also removes $20 million in funding from the Rx Kids program, which provides universal basic income for new mothers and pregnant women in growing communities across the state. Last year's budget deal included $270 million for Rx Kids.

Legislative Earmarks and Redirected Funds

The House budget proposes $145 million in legislative earmarks, to be paid for by redirecting unspent funds previously allocated for the Strategic Outreach and Attraction Reserve Fund, or SOAR. Some larger grants include $15 million for the city of Owosso to replace nitrification towers at a wastewater treatment plant, $6 million for the Capuchin Soup Kitchen in Detroit to construct a new mixed-use building, and $6 million for Howell to improve the I-96 and D-19 interchange.

Another $300 million in unspent SOAR funding would go to the state's "rainy day" savings fund under the House GOP plan.

Next Steps

The budget for the 2026-2027 fiscal year, when ultimately passed and signed by Whitmer, will likely bear little resemblance to the partisan spending plan approved Wednesday. That's because the House will have to negotiate with the Democrat-led Senate and Whitmer's office to reconcile their respective plans and reach a bipartisan compromise before the spending bills can become law.

Lawmakers are confident they can send a budget to the governor on time, with a target deadline of July 1. The House passed their plan four months earlier than last year, when the lower chamber did not pass a budget until late August after a July 1 deadline written into state law.