Advocacy News – Aug. 28, 2025
What’s happening: On Tuesday, the Michigan House passed a $54 billion budget for Fiscal Year 2026 — $6 billion less than the Senate’s version, $5 billion below the Governor’s proposal, and $3 billion less than the current year’s budget. The final vote was 59-46, with Rep. Karen Whitsett as the only democratic lawmaker to vote in support.
Why it matters: This budget reflects a major shift in priorities, with significant cuts to several departments and programs that impact employers, local governments and service providers. While some reductions are related to the implementation of the federal One Big Beautiful Bill, other savings are found through a ten percent reduction associated with operational efficiencies.
- Key programs like the Going PRO Talent Fund and other workforce development initiatives face uncertainty as negotiations continue. Local governments and school districts — many of which began their fiscal year July 1 — are left without clear direction, making planning difficult.
The bigger picture: While the House budget is leaner than the current year budget, it includes notable investments:
- $3.4 billion more for roads
- $115 million Public Safety Trust Fund
- Eliminates state taxes on tips, overtime pay and Social Security income
- Additional investment in oversight through the Auditor General
But it also includes:
- Major cuts to departments like Labor and Economic Opportunity/MEDC (-46.7%), EGLE (-19.2%) and Civil Rights (-53.4%)
- Removal of one-time budget items
- Elimination of approximately 4,300 unfilled state employee positions
- Identified over $2 billion in funding for old or expired programs
Additional important policy changes:
- Requires all state employees to return to in-office work
- Restrictions on DEI funding, non-citizen services and foreign contracts
- Implementing E-Verify for all contractor and subcontractor employees to ensure legal work status
- Attorney General barred from joining federal/multi-state lawsuits without legislative approval
What’s next: The constitutional deadline for a state budget is looming Oct. 1, and with significant differences in funding levels and policy language, the coming weeks will be critical.
- The budget now moves to negotiations between the House, Senate and Governor’s office to develop a final product.
- If a budget is not approved by the legislature in the next 34 calendar days, Michigan’s government will shut down. Unlike the federal government, the state of Michigan does not have the ability to pass a resolution to support government operations in the absence of an annual budget.
What we’re doing: The MI Chamber will remain actively engaged to ensure the final budget supports economic growth, workforce development and a competitive business climate.
For more information of questions, contact Becky Burtka.