Updates About Economy

Governor Gretchen Whitmer delivered a major address on Michigan’s economy last week, underscoring the vital role that middle class jobs have played in the state’s success. She pointed to recent progress that includes adding or retaining nearly 1,000 jobs across multiple municipalities that led to a $200 million boost to the state economy. Whitmer also spoke on securing a fighter mission for Selfridge Air National Guard Base protecting 30,000 jobs and nearly a billion dollars in statewide commerce. She outlined long term investment projects in infrastructure, childcare, housing, and education made possible through bipartisan cooperation, noting that more than 1,500 bipartisan bills have been signed to support working families and strengthen communities.

The governor also raised concerns about what she called a “man-made storm of uncertainty” caused by chaotic national tariff policies and delays in finalizing a state budget. Consequences of this storm include rising prices on groceries and household goods for families, while steep costs, outsourcing, and lower sales threaten Michigan farmers and automakers. Without action, she warned, progress on roads, schools, and public safety could be rolled back, putting thousands of good-paying jobs at risk. Whitmer closed her speech by reminding lawmakers of the value in working across the aisle to sign a balanced budget. What should this compromise look like? According to the governor, a signable budget covers Senate priorities to protect Medicaid, feed kids at school, and support moms and babies and also includes House priorities like cutting spending, fixing local roads, and increasing transparency.

According to the Senate Fiscal Agency’s July 2025 Revenue Report, Michigan’s major taxes and net lottery revenue totaled $2.9 billion in July, down 1.6% from last July and about $130 million short of their May prediction. General Fund revenues came in $125.9 million less than forecasted, while School Aid Fund revenues missed expectations by $15.7 million.

Contributing factors included individual income tax refunds that were larger than originally anticipated, paired with smaller corporate income tax receipts and lower net lottery revenue. Stronger results from real estate transfers, the sales tax increase of 4.5%, and wagering taxes helped, but not enough to offset. So far this fiscal year, General Fund and School Aid Fund revenues remain $53.0 million and $3.6 million below expectations, respectively.

Governor Gretchen Whitmer has signed an executive directive requiring state offices to assess the impact of federal tariffs on Michigan’s economy. Executive Directive 2025-5 instructs that by August 30, the following departments are to review data that may shed light on the impact of new tariffs in Michigan: Department of Agriculture and Rural Development; Department of Environment, Great Lakes, and Energy; Department of Natural Resources; Department of Technology, Management, and Budget; Department of Transportation; and the Michigan State Housing Development Authority.

Here in Michigan, the impact of tariffs is poised to be much higher than in many other states due to our manufacturing and agriculture-heavy economy. Already, the state has experienced rising costs and disrupted supply chains. Whitmer has expressed concerns about the negative effects these tariffs will have on Michigan families and businesses. The directive was issued one day before President Trump’s August 1 tariff deadline.