Michigan Gov. Whitmer proposes $88.1 billion budget to lawmakers

Michigan Gov. Gretchen Whitmer's administration on Wednesday presented her final budget proposal to lawmakers that her office says would provide tax relief for seniors, support student literacy and protect access to Medicaid.

The $88.1 billion fiscal year 2027 budget, presented by State Budget Director Jen Flood, includes a $13.6 billion general fund, $21.4 billion on school aid and $5.8 billion for roads, Whitmer's office said in a news release. The proposal also includes the Saving Michiganders Money Plan, which would establish a back-to-school sales tax and continue free lunches for over 1 million students.

The governor proposed a $400 million withdrawal from the state's rainy day.

"Michigan is open for business and on the move, and this budget will deliver on the kitchen-table issues that make a real difference in people's lives," Whitmer said in a statement. "My balanced budget proposal will build on our strong record of bipartisan success. It doubles down on shared, long-term priorities to create good-paying jobs, fix roads, save Michiganders money, and ensure every child can read, eat, and succeed. Let's work together to deliver another balanced, bipartisan budget on time and keep moving Michigan forward."   

The budget sets aside $625 million for student literacy, a topic that Whitmer said in December 2025 was her top priority. Additionally, the budget presents a 2.5% increase (an additional $250) in base per-pupil funding.

The budget proposes $780.4 million to "stabilize Medicaid funding, protecting access to health care for eligible Michiganders through revenue generated from a mix of funding mechanisms," according to the news release. That includes seeking tax revenue from vaping and non-tobacco nicotine products ($73.6 million), digital advertising ($282 million) and sports betting ($192.8 million).

"Governor Whitmer is focused on the everyday things that matter most to Michigan families—lowering costs, ensuring our kids can succeed, and protecting Medicaid," Flood said. "We've shown that we can work together to pass balanced, bipartisan budgets, and I look forward to continuing that work with our legislative partners to get the budget done ahead of July 1."    

While Whitmer received praise for the budget proposal, some Republican lawmakers are pushing back on tax hikes.

 "The governor calls this the 'Saving Michiganders Money Plan,' yet she's proposing multiple new tax hikes," Rep. Matt Maddock said in a statement. "This is absurd. You don't need to raise taxes on anybody when millions in wasteful and fraudulent spending are still sitting in the state budget waiting to be cut."  

House Speaker Matt Hall also opposed tax hikes, saying, "I reviewed a number of these tax increase proposals when we were talking about roads. They're gonna happen. We're not gonna raise taxes on vape, alternative nicotine products and other tobacco products. We're not gonna do a delivery tax, we're not gonna raise taxes on internet gaming. We're not gonna do any of that."

Passage of the fiscal year 2026 budget last year proved challenging, with lawmakers struggling to approve the budget by the July 1 deadline. After missing that deadline, lawmakers were then given until Oct. 1, 2025, to pass the budget. They invoked a continuation budget to keep the state government operational while they worked through a vote.

Lawmakers passed the budget a few days after the Oct. 1 deadline.