Advocacy News – Oct. 1, 2025
What happened: As budget talks continue, and a consensus is not reached, the state of Michigan’s budget is uncertain. Discussions were ongoing yesterday between leadership members of both the House, Senate and Governor’s team to come to a resolution only to pass a stop-gap measure to prevent a government shutdown with promises to resume conversations today.
In the early morning hours, the Legislature adopted what is being referred to as a continuation budget to fund government for 1/52 of the year. House Bill 4161 (Bollin) was originally passed by the House Republicans earlier this year as an attempt to demonstrate what a “no frills” budget would look like and allow state government to operate while negotiations were ongoing concerning road funding and other big-ticket items. Now in a turn of events, the bill was indeed used to support interim spending to keep state lights on, doors open and employees paid.
What they’re saying: Information from inside the Capitol indicates there are still talks in earnest to have a budget passed by the legislature by Thursday, Oct. 2. Majority Floor Leader Bryan Posthumus is quoted as saying “[t]he budget is done and agreed upon. And this is the process: A couple days to draft it; we expect to be able to vote, hopefully sometime Thursday; couple days to get it to presented to the governor; and three days for a review to take place.”
What we’re saying: While we are encouraged by the progress made toward a bipartisan agreement, the lack of transparency and finality in the budget process makes it difficult to assess the full impact on Michigan’s economy and workforce.
- We remain particularly concerned about the business tax increases embedded in the current framework and their potential to undermine Michigan’s competitiveness.
Our top concern: One of the most consequential — and controversial — elements of the proposed budget framework is House Bill 4961 (Bollin), which would separate Michigan’s tax code from recent federal tax changes enacted under the One Big Beautiful Bill Act (OBBBA).
- Currently, Michigan businesses calculate their state taxes based on their federal adjusted taxable income, which reflects deductions and credits provided under federal law.
- HB 4961 would permanently eliminate those benefits at the state level, resulting in a significant and ongoing tax increase for Michigan employers, including small businesses, with an estimated revenue impact of $677 million in just the first year.
What we’re doing: The Michigan Chamber is actively advocating for a five-year sunset clause on the bill to ensure that the policy does not impact the long-term competitiveness of Michigan businesses.
Moving forward: The MI Chamber advocacy team will continue to monitor progress on the budget, keeping a close eye on programs that support Michigan employers and workforce including Going Pro, permitting and contaminated site clean-up.
Stay tuned to learn more as developments unfold and reach out to the advocacy team with any questions.