Despite positive steps, Michigan’s state budget remains unsustainable
(This opinion article was distributed to local media in the 18th Michigan Senate District in October of 2025)
It took much longer than it should have, but Michigan finally adopted a new state budget shortly after the new fiscal year began Oct. 1.
There are some positives in this new budget, and I am thankful that it was adopted in a way that avoided disruption in state services. But I voted against the budget plan because, overall, it is unsustainable moving forward.
This structural problem began when Michigan Democrats burned through a $9 billion state budget surplus a few years ago — needlessly expanding the size of state government instead of investing in infrastructure, saving money or lowering taxes.
Despite Republicans’ best efforts to rein in spending, the newly approved budget relies too heavily on new taxes and tax shifts. Legislative leaders already acknowledge that annual budgets in the coming years will likely be hundreds of millions of dollars short, which would require more cuts — or worse, more taxes and fees — to remain balanced as required by state law.
The additional investment in Michigan roads outlined in this budget — ramping up to $1.9 billion annually — is desperately needed, but it relies too heavily on tax increases and missed opportunities to capitalize on recent tax changes at the federal level. Ultimately, these costs will be passed along to Michiganders through higher prices or lost jobs.
The budget deal separates or “decouples” Michigan from some recent changes in federal tax law, costing state businesses an estimated $540 million more than they would otherwise have paid in the new fiscal year. Worse, it makes Michigan less competitive moving forward. Why would businesses create new jobs here when there will be a significant tax advantage in neighboring states?
A new wholesale tax on marijuana products is expected to cost businesses and taxpayers roughly $420 million, although I highly doubt it will rise that much. The marijuana industry is already suing in an effort to block its implementation.
The budget deal would allow the Department of Health and Human Services to restructure an assessment on health insurance providers that raises about $650 million a year. This cost is primarily passed along to Michiganders through higher insurance premiums, and a state agency should not have that kind of authority.
As part of the roads deal, local governments will miss out on an estimated $63 million in constitutional revenue sharing that helps communities pay for police, fire and other services. This reduction hits rural townships particularly hard.
While I support investments in Michigan schools, this budget spends money in the same ways we always have — which is unlikely to produce better results. Michigan ranks below the national average in achievement test scores despite spending more per student than most states. This plan does not address glaring issues with chronic absenteeism and only gives lip service to cellphone distractions in schools.
Would it be better to spend $200 million on the governor’s plan to add accountability and resources for failing schools or to give one-time bonuses to educators regardless of student performance? Students would have been better served by leaving compensation solely to local bargaining and focusing our attention on failing schools. Unfortunately, the governor’s targeted improvement plan will have to wait.
I also disagree with the decision to shift an additional $400 million from the K-12 School Aid Fund to universities, which again is part of funding shifts to free up money for road repairs.
House Republicans deserve credit for some significant achievements as they negotiated with a Democratic-led Senate and a Democratic governor. I applaud the decision not to renew funding for the Strategic Outreach and Attraction Reserve Fund, a failed economic development program I have sought to eliminate for the past few years.
New transparency requirements ultimately will help reduce spending on pet projects and hopefully screen out some of the undeserving recipients. The budget plan also takes a step toward reining in the size of state government by eliminating 2,000 “ghost employee” positions that, for the most part, have remained unfilled.
It is difficult to craft a state budget that everyone will be happy with when political power is divided. But we cannot continue down the unsustainable path of raising taxes and making life more expensive for Michiganders.
State Sen. Thomas Albert represents the 18th District, which includes Barry County and portions of Allegan, Calhoun, Kalamazoo, Kent and Ionia counties.