Senate Approps’ Budgets Feature New $372.5M Infrastructure Fund, Tariff Grants & More

Increasing public schools’ foundation allowances to $10,008 per-pupil, a new $372.5 million “Community Infrastructure Fund” for local governments and $100 million in “economic relief” grants directly related to the White House’s tariff policies were moved by Senate Appropriations Tuesday.

On Tuesday, the Senate Appropriations Committee moved all of its Fiscal Year (FY) 2026 budget recommendations to the chamber floor, including SB 163 , SB 164 , SB 165 , SB 166 , SB 167 , SB 168 , SB 169 , SB 170 , SB 171 , SB 172 , SB 173 , SB 174 , SB 175 , SB 176 , SB 177 , SB 179 , SB 180 and SB 181. Also moving on Tuesday was SB 184, a $446.6 million FY 2025 supplemental spending bill.

Senate Appropriations Chair Sarah Anthony (D-Lansing) highlighted a proposal to spend $372.5 million from Michigan’s General Fund to create a “Community Infrastructure Fund,” bankrolling local infrastructure projects. For cities, villages and townships awaiting revenue-sharing payments from Michigan’s sales tax, $33.4 million from the fund will go toward boosting the state’s distributions – a 10 percent increase – with a focus on infrastructure.

“Our commitment to building a stronger, more resilient state is reflected in investments across every level of infrastructure – from school repairs to local water projects to roads and bridges,” reads an Anthony press release on budget highlights. “Infrastructure is a matter of economic justice, and these investments will bring us one step closer to ensuring our communities are safe and inviting for years to come.”

The Senate’s PreK-12 budget would raise the per-pupil allowance for public schools from $9,608 to $10,008, or a 4.2 percent increase. However, under the proposal, 50 percent of the increase must be spent on teacher pay hikes.

It also sets aside $258.7 million from the School Aid Fund (SAF) to bump up funding for schools with flagged at-risk student populations. Any district with this funding could use up to 30 percent to reduce class sizes for kindergarten through third grade under the recommendation.

As for the “economic relief” grants, $20 million would be dedicated to grants and loans to businesses affected by President Donald Trump’s tariffs. Within the overall $100 million grant pool, $30 million would go toward worker training and retooling, $20 million to address local emergency preparedness, $10 million to assist food banks and $9 million to distribute re-shoring supply chain grants.

The Senate’s proposed general government eliminates $75 million that was dedicated in 2024 to establishing the Public Safety and Violence Prevention Fund. While constructing the budget last year, the line item was made so legislation implementing the fund – made by 1.5 percent deposits from 4 percent of Michigan’s sales tax rate – could be approved.

The House is leading efforts to carry out and expand the proposed fund, with the House Government Operations Committee unanimously passing HB 4260 and HB 4261 on April 17.

The fund has been heavily backed by Detroit Mayor Mike Duggan, an independent 2026 candidate for governor. However, the Senate’s spending plan ultimately deletes references to “Public Safety and Violence Prevention,” replacing it with $100 million for “Community Safety Initiatives” to be overseen by the State Treasury instead.

“I believe that the House wants to try to improve the safety of residents, and that’s what we want to do, and we think we have a bit better way to do that in the Senate budget than in the House proposal,” said Sen. John Cherry (D-Flint), chair of the Senate Appropriations General Government Subcommittee.

While distributions from the House’s proposal would be based on violent crime rates, focusing on supporting programs overseen by law enforcement, Cherry explained the Senate recommendation “provides far more flexibility” for communities addressing any kind of public safety concern. He noted that a community could use a payment to build up its mental health services.

Anthony had her own SB 184, a supplemental to finalize $41 million in project requests to the Michigan Natural Resources Trust Fund, containing royalties from the sale and lease of state-owned mineral, gas and oil rights.

The majority of Tuesday’s budget bills – 13 out of 19 – were moved out by a 12-6 party-line vote, and none were approved unanimously. Anthony’s SB 184 passed with Sens. Sylvia Santana (D-Detroit), Jon Bumstead (R-North Muskegon), John Damoose (R-Harbor Springs), Mark Huizenga (R-Walker), Rick Outman (R-Six Lakes) and Lana Theis (R-Brighton) not voting at all on it.

“I think that’s going to be the fun part, making the Senate and House agree to anything we can get out on time. I think that’s the key. I think residents of Michigan want to see something done sooner than later, instead of dragging it out in October,” said Bumstead, the Senate’s minority vice chair. “But who knows?”

Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter

Click here for more News & Resources.