(The Center Square) – Days ago, Gov. Gretchen Whitmer and lawmakers in Michigan declared they had reached a compromise on state budget negotiations.
Yet, with just hours to go until the beginning of the fiscal year, concerns about a shutdown are once again looming. Now 91 days past due, there is still no finalized general state budget or School Aid budget, despite last week’s optimism.
At that time, Whitmer seemed certain a shutdown would be avoided.
“In Michigan, we’ve proven again and again that we can work together to get things done by staying focused on the kitchen-table issues that make a real difference in people’s lives,” she said. “Amid so much national economic uncertainty, I am proud that we are taking action to lower costs, cut taxes for seniors and working families, create jobs, fund schools, fix roads, keep people safe and healthy, and so much more.”
While little is known about the budget agreement so far, lawmakers have said it would include:
• An increase of the wholesale tax on marijuana to 24%
• Nearly $2 billion for repairing Michigan’s local roads and bridges
• A new $115 million Public Safety Trust Fund
• Eliminates state taxes on overtime pay, tips, and Social Security income
Advocates are urging state lawmakers to pass a “strong” budget before midnight.
“Michigan students and families deserve an education budget that can make our state a national leader in education, talent development, job preparedness and opportunity for all,” said Chandra Madafferi, a teacher from Oakland County and President & CEO of the Michigan Education Association.
If a budget is not passed by midnight, Michigan will enter a partial government shutdown. A total shutdown is avoided because “essential” services would continue, as well as certain continuing appropriations. Still, the state has not faced that since 2009, when a shutdown lasted mere hours before the budget was finalized.
While it is unclear exactly what state services would be affected and how, impacts across the state could include:
• State parks, Secretary of State offices, and Michigan Department of Natural Resources facilities closing
• The Liquor Control Commission pausing retail orders for spirits
• Some road construction projects halting
• Delays for education funding, Medicaid reimbursements, and unemployment registrations
Whitmer’s office seems to be hopeful that a shutdown might be avoided though, breaking precedent with past potential shutdowns by not releasing guidance for state agencies on how to proceed if a shutdown does become reality.
July 1 was the legally mandated statutory deadline for the finalization of the entire budget for the 2025-2026 fiscal year, including the separate School Aid budget.
That deadline came and went, after Republicans and Democrats proposed and voted on vastly different education budget plans.
With the Senate and governorship run by Democrats and the House run by Republicans, compromise from both sides will be necessary on the final budget.
Michiganders are facing even more uncertainty this year, as the federal government also faces a potential shutdown at midnight tonight. It would be unprecedented for Michigan if both the state and federal government enter a shutdown at the same time.
