Trump and Musk loom over Whitmer's incoming budget proposal

The Michigan governor will unveil her budget to lawmakers on Wednesday. While President Donald Trump won't be in the room, his shadow and the federal policies he has implemented will loom large.

Now in the final two years of her second term, Gretchen Whitmer will look to check more off her list of goals she set out to achieve after her first election six years earlier.

By the numbers:

There is one good thing going for Michigan ahead of tough budget talks: its state tax revenue is expected to grow.

"We're projecting combined revenues to rise about 5.6% in fiscal year 2026," said Gabriel Ehrlich, an economist at the University of Michigan. "Of course, there are always risks to our forecast."

Michigan has been effective at drawing down dollars from the federal government, which fills about 42% of its budget. 

But amid changes in the White House, that tactic comes with risks of its own.

Big picture view:

Other risks include Trump's tariff plan, which could hurt Michigan's economy, especially in the agriculture and automotive industries.

While tariff plans for Canada and Mexico are on pause, a 10% tariff on imports from China is in effect. 

If the auto industry is impacted, it would lead to reduced revenue for the state. 

Meanwhile, Elon Musk's tear through the federal government in a bid to remove spending could also impact federal dollars that flow into Michigan.

Dig deeper:

And for the governor, Whitmer has plans to build a new preschool for 3-year-olds as well as build 11,000 new affordable housing units with $2 billion from the budget.

She also wants to continue the free school breakfast and lunch programs, free tuition for community college students while boosting state aid for public universities.

The Source: Information from the University of MIchigan's economic forecast was used for this story. 

Gretchen WhitmerMichiganMichigan State HouseMichigan State SenateDonald J. TrumpElon Musk