Attorney general clears path for previously denied work projects; legal challenge looms
MAC received significant clarification this week regarding the status of nearly $645 million in state funding that had been left in limbo following action by the House Appropriations Committee late last year.
Attorney General Dana Nessel issued a formal opinion concluding the statutory mechanism used by the House Appropriations Committee to “disapprove” work projects carried forward from a prior fiscal year is unconstitutional. Under Michigan law, formal opinions of the attorney general have the force of law unless and until overturned by a court.
Under the Management and Budget Act (MBA), specifically MCL 18.1451a, appropriations approved by the Legislature and the governor for one fiscal year may, under certain conditions, continue into the next fiscal year as “work projects.” The statute authorizes the state budget director — acting on behalf of the executive branch — to designate eligible appropriations as work projects, subject to defined criteria, timelines, and reporting requirements.
The same statute also permits either the House or Senate Appropriations Committee, acting alone, to disapprove those work project designations. In December, the House panel exercised that authority to disapprove nearly $645 million in previously enacted funding, affecting a wide range of projects involving local governments, nonprofits and other entities.
In her opinion in response to a request from Senate Appropriations Chair Sen. Sarah Anthony (D-Ingham), Nessel concluded the committee “disapproval” provision in MCL 18.1451a violates the Michigan Constitution.
Allowing a single legislative committee to unilaterally negate spending authority already enacted into law constitutes an unconstitutional “legislative committee veto,” the opinion states. This mechanism infringes on the executive branch’s core responsibility to execute the laws once an appropriation has been passed by both chambers of the Legislature and signed by the governor.
The disapproval provision also violates constitutional requirements, the opinion stated, related to separation of powers, bicameralism and presentment — principles that require laws to be passed by both the House and Senate and presented to the governor for approval or veto.
Shortly after the opinion was released, Deputy State Budget Director Kyle Guerrant notified state departments that the administration agrees with the attorney general’s conclusion. Departments were advised that previously denied work projects may proceed, provided the appropriate procedural steps are followed.
House Speaker Matt Hall (R–Kalamazoo) strongly criticized the opinion and announced plans to file a lawsuit challenging it. Speaker Hall has long defended the work project disapproval provision and characterized the opinion as politically motivated.
MAC will continue to monitor developments closely, including any litigation and potential legislative responses. We will also remain engaged with the administration and Legislature to ensure counties receive timely information about the status of affected work projects.
Members with specific questions about individual projects or funding streams are encouraged to contact Deena Bosworth at bosworth@micounties.org.
State court says MDHHS needs changes to proceed with mental health revamp
An administrative revamp to how Michigan oversees local mental health services is in limbo following a decision by a state court on a Michigan Department of Health and Human Services (MDHHS) bidding process.
On Thursday, Michigan Court of Claims Judge Christopher P. Yates ruled the consolidated Prepaid Inpatient Health Plan (PIHP) procurement litigation involving the state’s Request for Proposals (RFP) conflicts with state law in several respects.
This decision builds on the court’s earlier October ruling, which allowed MDHHS to move from the current PIHP structure to a competitive procurement model and reduce the number of PIHP service regions.
In the new opinion, the court did not immediately halt the procurement through an injunction, instead issuing a declaratory ruling identifying the legal defects and directing the state to determine how it will bring the procurement into compliance. In other words, the court says the RFP cannot stand as written, but it left the next corrective steps to state officials.
The state will need to choose a path to address the court’s declaration — such as issuing additional amendments, taking other corrective procurement actions or potentially withdrawing and reissuing the RFP. The court signaled it will “stay its hand” for now, but it could step back in if the state is unable or unwilling to resolve the conflicts.
While the state’s previously stated timeline has pointed toward contract awards in February 2026 and implementation on Oct. 1, 2026, the practical impact on timing will depend on the corrective approach the state selects.
For more information on this issue, contact Jimmy Johnson at Johnson@micounties.org.
Court of Claims allows marijuana excise tax lawsuit to continue
The lawsuit filed by marijuana industry groups in opposition to Michigan’s 24 percent wholesale marijuana tax that took effect Jan. 1 will continue, a Court of Claims judge ruled on Monday.
While the industry may pursue its challenge to the tax, the state may continue to collect the levy in the meantime.
The marijuana levy was part of the 2025 road funding plan and is estimated will generate $420 million annually for a new Neighborhood Road Fund. Industry groups claim the tax amended the 2018 ballot measure that legalized recreational marijuana, which would require a two-thirds majority vote of legislators. The Comprehensive Road Funding Tax Act passed in October 2025, now Public Act 23 of 2025, did not receive a two-thirds vote. Court of Claims Judge Sima Patel disagreed with industry groups, though, citing that the new law was “another tax” and not an amendment to the ballot measure.
For more information on this issue, contact Samantha Gibson at gibson@micounties.org.
Podcast 83 team predicts another slow year for legislation in Lansing
MAC’s Podcast 83 team opened its 2026 schedule this week with an analysis of what will go on in Lansing this year.
The short answer: Not much.
“We recently heard from the House Fiscal Agency at a luncheon, and the numbers projected for the coming (budget) year weren’t super promising,” said Samantha Gibson. “I don’t think anything too detrimental, as far as the deficit goes, but definitely not what we saw a few years ago when there was a $9 billion surplus …
“(Looking) much like last year, where there was not a ton to go around … So, I think this budget season, deficit or not, will look similar to the last.”
Gibson also noted the court fight over a key element of the 2025 road funding package could further slow legislative activity in 2026: “As far as road funding alone goes, there’s a question around whether the marijuana tax is going to move forward? That lawsuit is ongoing. There is uncertainty as to when Treasury is going to be able to start collecting and then distributing on the new corporate income tax, too.”
Putting the team on the spot, Currie asked all three MAC panelists whether there would be more or fewer bills enacted in 2026 than in 2025, when the Legislature set a historic low for enactments.
All three took the under, with Gibson saying as few as 30 bills, Deena Bosworth going with 56 bills and Jimmy Johnson saying 65 to 70 bills.
To watch the full episode, recorded on Jan. 6, click here or on the image above.
Learn how Savi’s loan forgiveness work can help your county attract and retain employees
Join MAC and Savi for a special webinar on Jan. 13 to learn how your county can create an excellent benefit to help you attract and retain employees.
Did you know that over 9 million public service workers, including full-time county employees, are eligible for student debt forgiveness through the Public Service Loan Forgiveness program? Yet, fewer than 3 percent have received relief.
Please join us as we speak with student debt forgiveness expert Tony Raffa, who will clear up much of the confusion over:
- Executive orders and what they mean for employees
- Changes in the Department of Education and its impact
- Current student debt relief programs and who is eligible
- Common issues with applying for and receiving student debt forgiveness
A new tool is available to help your employees calculate their potential student debt relief and cut through the red tape when applying. We will show how the tool helps employees save an average of $2,244 a year, freeing up space for them to hit their financial goals.
Click here to register for the webinar, which will run from 11 a.m. to 12 p.m. Eastern on Jan. 13.
Academy calendar will feature ‘Mid-Term’ event for commissioners
The 2026 calendar for MAC’s County Commissioner Academy (CCA) will focus on the topics of budget and finance, with five credit-earning opportunities now slated.
County Commissioner Academy is a professional development program for commissioners incorporating a series of events and workshops focused on the day-to-day responsibilities of a Michigan county commissioner.
Most notably this year, commissioners can earn 2 credits by attending a New Commissioner School “Mid-Term” briefing hosted jointly by MAC and Michigan State University Extension.
Commissioners aiming to earn their Year 2 certificate need to acquire 5 of the 8 possible credits to be presented. See the calendar below for opportunities. For details on CCA, visit MAC’s website or contact Communications Director Derek Melot at melot@micounties.org.
Initial CCA calendar of events:
- MAC Spring Webinar (March) (1 credit)
- MAC Legislative Conference (April 27-29) (2 credits) (Registration expected to open at end of January)
- New Commissioner School “Mid-Terms” (June and October in-person) (2 credits)
- MAC Summer Webinar (August) (1 credit)
- MAC Annual Conference (Sept. 9-11) (2 credits) (Registration expected to open at end of June)
Counties must respond to asset forfeiture survey by Feb. 26
Every county, township, city and village, as well as every state of Michigan department is required to file an annual asset forfeiture report online, even if the agency has no forfeitures to report. Any property seized after Feb. 1, 2016, and forfeited (finalized) during this reporting period (Jan. 1, 2025-Dec. 31, 2025) must be described in Section C of the online survey.
The survey link can be found on this site; the 2026 Asset Forfeiture Report and 2026 Asset Forfeiture Report Instructions are on the left side. Please note, once the form has been completed and submitted online, the data is automatically transmitted, and the agency will be emailed a copy of the submission for their records.
NOTE: The survey will not be accessible after Feb. 27, 2026; those that do not complete the survey by Feb. 27, 2026, will be listed in the 2026 Asset Forfeiture Report under Chapter 28 as having failed to properly report the information required under MCL 28.116.
Contact Brian Peacock at peacockb@michigan.gov or 517-449-2985 with any questions.
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