Updates About Appropriations

The Michigan Senate Appropriations Health and Human Services Subcommittee advanced its version of the FY 2026 DHHS budget last week at $39.31 billion, coming in slightly higher than the Governor’s proposed $39.15 billion recommendation. Chair Sylvia Santana’s (D-Detroit) objectives include improving health outcomes for families while protecting essential services and preparing for potential decreases in federal Medicaid support.

Key Senate additions include $58 million for expanding Flint’s Rx Kids program, $13 million for water affordability initiatives, and $10 million for reproductive health access grants. The Senate also proposed smaller increases to Medicaid eligibility than Whitmer’s plan. The budget did not include funding for building a state psychiatric hospital in Northville or for health care services for incarcerated individuals prior to release. It also failed to include several items funded by opioid settlement dollars that were proposed in the Governor’s executive recommendation. However, the Senate added funding in areas such as permanent supportive housing, reproductive health access grants, children’s advocacy centers, non-clinical direct care worker pay, and medical debt relief.

Senator Kevin Hertel (D-St. Clair Shores) has proposed a $1 million allocation for a new “Statewide Fentanyl Enforcement” initiative in the Michigan State Police budget for Fiscal Year 2026. The funding would bolster the department’s existing task force operations, which collaborate with other agencies to identify and prosecute fentanyl traffickers across the state. Hertel noted the investment is a direct response to the increasing impact of fentanyl in Michigan communities.

As the Senate Appropriations Military, Veterans and State Police Subcommittee Chair, Hertel believes the appropriation would provide resources to help MSP and its partners identify fentanyl sources, disrupt distribution networks, and hold traffickers accountable. The subcommittee approved the broader FY 2026 State Police budget, which includes this allocation, on a 2-0 vote.

Governor Gretchen Whitmer recently presented her Fiscal Year 2025-2026 Executive Budget Recommendations, kicking off Michigan’s budget season. With a total proposal of $83.5 billion—the largest in state history—the budget reflects a $1.2 billion revenue surplus and prioritizes lowering costs for residents, creating jobs, investing in education, supporting seniors, and strengthening public safety. Key highlights include continued tax relief through the Working Families Tax Credit, expanded universal pre-K, free school meals for all public school students, and increased investment in workforce development. Additionally, the proposal allocates billions toward infrastructure improvements, child care support, and special education funding.

Other notable investments focus on public health and safety, including $46.8 million in opioid settlement funds, increased Medicaid access for seniors and individuals with disabilities, and a $42.8 million tax on vaping and nicotine products (see Governor Recommends New Tax Targeting Youth Nicotine Consumption for more info). The budget also includes major investments in Michigan’s defense industry, cybersecurity, and government modernization. As the legislature begins negotiations, these proposals will shape the final state budget ahead of the July 1 deadline.