Updates About Budget

Recently, Governor Whitmer signed a four bill bi-partisan package to balance the State’s Fiscal Year 2027 budget. Included in the legislation is a plan to move forward with a $1.3 billion investment in construction and renovation projects at public universities and community colleges.

Two of the bills authorize financing for 27 higher education projects included in the budget. Under SB 729, the State Building Authority’s debt ceiling was raised, allowing for the financing of the projects. HB 5482 provides the Legislature with the authority to appropriate funding for the State Building Authority’s rental payments and long-term projects.

The remaining two bills divert money into the General Fund. SB 569 transfers money from the Public Health Code to the General Fund, while HB 5109 moves money from the Transportation Administration Collection Fund.

The patch these bills provide ensures the state can move forward with the higher education projects that aim to modernize existing facilities, renovate older classrooms, and create new labs, while maintaining a balanced FY 2027 budget.

A new study from the Citizens Research Council of Michigan shows that the recent federal changes made to the Supplemental Nutrition Assistance Program (SNAP) have contributed to an 8% decline in the number of Michigan residents receiving benefits.

During fiscal year 2025, approximately 1.5 million Michigan residents received SNAP benefits. A total of $3.1 billion was distributed, with an average benefit of $175 per month. By April 2026, roughly 1.37 million Michiganders were receiving SNAP benefits.

The federal changes, which include new eligibility restrictions and further work requirements for certain groups, are the primary reasons for the decrease. The changes included applying work requirements to adults ages 55 and older and removing exemptions for certain individuals experiencing homelessness, veterans, and young adults who previously aged out of foster care.

Michigan’s 8% decline was smaller than the national average decline of 12% during the same period. The Citizens Research Council estimates that the changes have reduced SNAP benefits in Michigan by approximately $300 million annually. The study noted that declining enrollment could increase state healthcare spending while also negatively affecting educational outcomes due to increased food insecurity. State officials are expected to consider how to address the funding gap created by federal cuts.

After a lengthy session day that took place over the course of 30 hours, the Michigan legislature passed a budget for the 2026-2027 (FY 27) Fiscal Year on July 3. Following the passage, significant questions have emerged about the overall spending total of the budget. On paper, the FY 27 budget totals $75.2 billion. However, the budget authorizes $86.4 billion in spending after federal Medicaid taxes and federal K-12 appropriations were shifted into boilerplate and not included in the topline.

The budget reduces Medicaid appropriations by approximately $479.2 million, ($185 million GF/GP), mostly coming from pharmaceutical program restructuring. About $87 million in savings was assumed by using restricted funds, instead of general fund dollars for certain programs.

Much of the 30 hour marathon session was spent voting on legislation unrelated to the budget, likely part of negotiations with fellow lawmakers ahead of campaign season. Before concluding with the budget bills, the Legislature first passed 66 policy bills that were largely uncontroversial. Highlights include establishing a two-year lobbying ban for certain former elected officials and department heads (HB 4062, 4063 and HB 4064), a bill prohibiting large corporate entities who already own 100+ Michigan homes from purchasing more (HB 6074), and legislation requiring Michigan Medicaid to cover evidence-based group prenatal care services (SB 415).

A full list of the legislation passed alongside the FY 27 budget can be viewed here.