Whitmer state budget seeks new tax revenue amid federal cuts

FOX 2 - Governor  Gretchen Whitmer’s final  budget was presented to lawmakers in Lansing today, amid severe federal cuts in the area of Medicaid and SNAP benefits, among other changes.

The backstory:

The budget is just over $88 billion, including a general fund total of  $13.6 billion, while questions swirl about what the state's economy will look like in the future. 

Beyond Medicaid, pandemic-era spending has also dried up, which was estimated at between $11 billion to $13 billion during the COVID era.

"We can talk about efficiencies, we can talk about tightening our belt and increasing revenue," said Sen. Sarah E. Anthony (D-Lansing). "We also need to pause to think about the fact that there were decisions made at the federal level and when I look at who’s holding the bag, it is people - Michigan’s families."

That loss of federal funding has tightened the state’s revenue outlook heading into the 2027 fiscal year and is shaping the debate in Lansing over how to keep the budget balanced.

Governor Gretchen Whitmer and Democratic leaders say their proposal maintains a fiscally responsible plan that continues investments in education, infrastructure, health care and public safety while providing targeted tax relief to help residents manage rising costs.

Republicans, however, say a leaner budget with no tax increases, deeper spending cuts and broader tax relief for all households makes more sense. 

GOP leaders are calling for eliminating wasteful spending and avoiding reliance on reserve funds, saying families and small businesses are already stretched thin. With both sides acknowledging a tighter financial landscape.

"We like to talk, we like to throw out all this stuff," said Rep. Phil Green (R-Millington). "We like to throw politicians under the bus. But when we start looking at numbers and long-term projections and policies spending $9 billion, and now the chickens have come home to roost."

Other hot topics: Expanding or increasing targeted tax relief- particularly through the Homestead Property Tax Credit and other measures for families and seniors to tackle living expenses.

Supporters say the plan puts money back into residents’ pockets, while Republicans argue the relief is too narrow and should apply more broadly. Coming up I’m talking the school aid budget of $21.4 billion.