The state budget the Senate passed this week for the coming year is short $313.4 million based on cooler revenue estimates that came out of Friday’s conference of fiscal forecasters, according to a Senate Fiscal Agency report released Friday afternoon.
When the Senate passed its budget Wednesday based on January estimates, the Senate-passed budget had a $400 million balance in the General Fund and a $100 million balance in the School Aid Fund, said SFA Director Kathryn Summers.
The new May projections aren’t as strong, and the final consensus numbers look less drastic than what the Senate Fiscal Agency (SFA) projected Thursday. They projected revenues to be down $393.2 million for Fiscal Year (FY) 2025 and $561.2 million for Fiscal Year (FY) 2026. Added together, the SFA estimated that the Senate-passed budget for next year “leads to a negative $968.5 million” balance in the General Fund. The School Aid Fund would have a $197.7 million balance.
The numbers opened Senate Democrats to criticism from House Speaker Matt Hall (R-Richland Township), who, using the SFA’s preliminary report issued Thursday, had the Senate-passed budget around $1 billion out of whack.
“The Senate’s own fiscal analysts are saying the budget the Democrats passed just two days ago puts Michigan into a $1 billion deficit. And they were so proud of rushing it through without thinking. I’ve been telling you from the beginning that we’re negotiating with unserious people,” Hall said.
“House Republicans are going to have to be the adults in the room once again. While the Senate Democrats waste time blaming President Trump to cover up for their own failed corporate welfare and blown budget surplus causing this shortfall, House Republicans are going to do what we’ve promised from day one: truly evaluate state programs for performance, prioritize what works best and what’s most important, and get much better value for the taxpayers in our budget.”
In response, Senate Appropriations Committee Chair Sarah Anthony (D-Lansing) told MIRS Monday that she’s not surprised that revenues have dropped in Michigan due to the “dysfunction that’s happening at the federal level that is being cheered on by the Speaker.”
“It’s clear that some of us are familiar with the timeline of getting the budget done by July 1,” she said, adding that getting a budget done by July 1 means each chamber’s opening salvo must be moved to the other chamber by Friday’s Consensus Revenue Estimating Conference (CREC).
“We presented a balanced budget that was based on the available revenues in January. Unfortunately, the House has not engaged. They have not presented a budget,” Anthony said.
Following Friday’s Consensus Revenue Estimating Conference, House Appropriations Committee Chair Ann Bollin (R-Brighton) dodged repeated questions about when House Republicans would start kicking out their department budget recommendations.
“School aid, higher ed, community college, those are all things that we should work very hard to get through by June 30,” Bollin said. “Subcommittees are going to continue their work. We really needed to see information from today to see where we’re at.”
Also, when asked directly if the House R’s are “going to have enough” money to pay for a $3 billion road funding plan and roughly $1 billion in income tax cuts, Bollin confessed: “I don’t know if we’re going to have enough, but we’re going to work very hard to make sure that we meet our commitment of fixing the damn roads and making sure people are taken care of.”
Bollin added that she’s taking a hard look at $2 billion in outstanding state government work projects as House Republicans craft a Fiscal Year (FY) 2026 spending plan that remains a work in progress.
Bollin added the caucus supports law enforcement, affordable health care for the state’s most vulnerable, and education.
Asked whether the House plans to pass a plan by July 1, the start of the schools’ next fiscal year, Bollin said “I hope that we’re going to do a school budget by July 1.”
She then mentioned the House already has passed its “shutdown prevention plan,” the continuation budget of sorts that funds schools and some government services in case a final budget isn’t signed by Oct. 1.
Meanwhile, the Senate passed its spending plan this week, one that recommends spending $1.1 billion more than the Governor’s proposal.
Based on what he’s seeing, Rep. Alabas Farhat (D-Dearborn), the House Democrats’ lead on the budget, said between the uncertainty at the federal level and the “dysfunction in DC, and no serious desire to get a budget done here in Lansing any time soon,” he wants another CREC in September.
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter
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