Last week, the Michigan Legislature passed a state budget for fiscal year 2025-2026. This comes after a continuation budget was signed last Tuesday to keep the state government operating through Oct. 8. The governor signed the full budget on Oct. 7. With these developments, Michigan has stopped a state government shutdown. Some appropriations that directly benefit South Lansing and Delhi Township include:
- $3.5 million for McLaren Greater Lansing and Michigan State University to serve low-income and uninsured patients. This is intended to offset cuts from the One Big Beautiful Bill Act.
- $2 million for the Ingham County Land Bank to support downpayment, assistance, home rehabilitation, foreclosure prevention services, and the development of affordable workforce housing.
- $1.2 million for the Lansing School District to renovate the Don Johnson Fieldhouse to expand the Lansing Student Development Program.
The $51.8 billion state omnibus budget (HB 4706) and $21.3 billion school aid budget (SB 166) include the following funding:
- $10,050 in per-pupil funding, a 4.6% increase from the previous year.
- Universal free school meals for all public students, a $201.6 million investment.
- $321 million for student mental health and safety grants.
- A $205.5 million increase to special education.
- $130 million for the School Transportation Fund.
- More funding for “at-risk” students and English language learners.
- $1.7 billion total for Michigan’s state universities. All public universities will see a 1.9% to 4.7% funding increase, with MSU receiving a $2.1 increase, or $6.9 million.
- Free community college for all in-district students, and a 1.7% increase to Lansing Community College.
- $95 million in grants to public safety, firefighters, and prosecutors.
- $964 million for the Michigan State Police, which is an $11 million increase from the previous year.
- $12 million for the state’s Arts and Cultural Program
We passed a long-term road funding plan that is expected to generate $1.8 billion per year, when fully implemented, with additional funding going for local roads. Under House Bills 4180–4183, more revenue from the state gas tax would be directed to roads. House Bill 4951 creates a 24% wholesale tax on marijuana, estimated to deliver $420 million a year for roads.
The budget bills passed last week will also exempt tips and overtime from the state income tax for 3 years, and it also makes sure that tier 3 retirees can take advantage of the standard deduction while not paying taxes on their social security for 3 years. Legislation (HB 4961) also separates (or decouples) the Michigan tax code from federal tax law, preventing major revenue loss caused by the One Big Beautiful Bill Act’s corporate tax cuts.
Legislation (HB 4968) was also passed to protect Medicaid through changes to the Insurance Provider Assessment Act, a tax on private insurers and others that supports Medicaid. This means that Michigan will qualify for more federal Medicaid funds – and it softens the blow from Medicaid cuts in the “One Big Beautiful Bill” (HR 1).
Note: This section has been revised to incorporate minor corrections (Oct. 10, 2025). |
