The Michigan Senate passed the first part of its $88.1 billion proposal for the next state budget Wednesday.
The bill covers around $63 billion of spending for state departments, and the Senate's full budget proposal would include $12 billion more in state spending than the House plan.
Senate Appropriations Committee Chair Sarah Anthony (D-Lansing) said there’s not a lot of flashy new spending in the plan, but she’s proud of the money it puts toward free school meals, affordable housing, and the social safety net.
Federal cuts under President Donald Trump's signature legislation, the One Big Beautiful Bill Act, are leading Michigan to take up a bigger portion of costs, especially around Medicaid and food assistance.
Anthony told reporters getting the Senate’s vision out now gives more time for negotiations as the state faces a budget shortfall.
“That One Big Beautiful Bill has had a significant impact on our balance sheet and so I don’t think that we can waste a ton of time,” Anthony said.
The Republican-led Michigan House of Representatives passed its budget proposal last week, a marked difference from last year. In 2025, delays meant a new state budget didn’t pass until after the current fiscal year had already begun.
Unlike the House proposal, which would cut the budget, the Senate plan would raise spending. That decision caused Senate Republicans to speak against the bill ahead of voting Wednesday.
State Senator Thomas Albert (R-Lowell) said the Democratic-led Senate proposal would spend money in the wrong places. He said the plan shouldn’t add more state employees, raise hunting and fishing fees, or send more money to local governments.
Albert also worried line-items listed as “one-time spending” could actually be used for ongoing needs.
“When government uses one-time spending to expand programs that continue every year, it builds an annual budget problem and breeds uncertainty and instability,” he said.
Another point of criticism for Senate Republicans was the use of the state’s rainy-day fund in the broader budget proposal.
“Using state savings now is unwise because it’ll leave fewer resources available if we truly do face a financial emergency in the future,” Albert said.
A proposed budget supplemental for the current fiscal year suggests putting $200 million in rainy-day funding toward Medicaid, and another $150 million toward dealing with the effects of federal cuts.. Anthony said it wasn’t an easy choice.
“We’re not doing that lightly. We didn’t want the rainy-day fund to address any and everything in the state budget. Making sure that we’re addressing those impacts of the federal government were our intentions,” Anthony said.
The Senate’s fiscal year 2027 plan adds up to right around what the governor proposed spending. The governor’s proposal included possibly raising taxes on nicotine products, online gambling, and digital advertising.
The Michigan House Speaker has also proposed his own tax increases, including on services which he said would allow for lower property taxes and other savings.
Anthony, however, said talks over how to raise revenue could come later.
“When we talk to people across the state, people are hurting right now. So, we didn’t want to start negotiations talking about raising taxes. That feels a little tone deaf when folks are worried about whether their healthcare will be addressed or whether they can put food on the table,” Anthony said.
A final version of the state budget will likely look very different from the Senate, House, or governor’s current proposals. There’s a July 1 deadline in state law to get everything done.
