Legislature finalizes FY 2026 budget with wins for counties
In a whirlwind week at the Capitol, the Michigan Legislature worked through late-night and early-morning sessions to avoid a government shutdown and finalize the state’s FY 2026 budget. On Oct. 1, lawmakers passed a one-week continuation budget to keep state operations running while negotiations continued. Just two days later, in the early morning hours of Oct. 3, the Legislature gave final approval to the full FY 2026 budget.
For Michigan’s 83 counties, the outcome represents significant progress compared to earlier proposals.
Revenue sharing maintained at FY 2025 levels
The FY26 budget continues county revenue sharing at FY25 levels, with the same distribution formula in place. This is a major win for counties, especially after the House’s August-passed version included a 12 percent cut to county revenue sharing. Avoiding this reduction ensures counties can continue delivering core services without shouldering the brunt of state budget-balancing efforts.
$11.6 million provided for public safety support
The budget provides $11.6 million in new funding for counties to apply toward public safety measures. Unlike some restricted pots of funding, this allocation provides flexibility: counties may direct the dollars to a wide range of public safety services, not just sheriff’s departments. These funds will be distributed to counties as public safety assistance payments. The payment calculation is based on each county’s adjusted taxable value population, ensuring a fair statewide distribution.
Prosecutor funding secured
The FY 2026 budget also resolves the lingering FY 2025 prosecutor funding issue. The budget provides a fix for the 15 eligible counties that were shorted in FY 2025 and includes an additional $17 million for those same counties in FY 2026, ensuring prosecutorial functions are properly supported moving forward.
Veteran Service Grants partially restored
While the FY25 supplemental budget did not backfill mid-year cuts to county veteran service grants, the FY26 budget allocates $4 million for these grants, reinstating important resources for veterans and their families.
Overall, it’s a win for counties
“Taken together, the FY26 budget delivers a stronger financial foundation for counties than many feared during summer budget negotiations,” said Deena Bosworth, MAC’s director of governmental affairs. “Revenue sharing was preserved, road funding increases were secured (see separate article) and counties gained additional resources for public safety and prosecutors. While the lack of a backfill for FY25 veteran grants is disappointing, counties emerge from the budget process in a far better position than anticipated just weeks ago.”
“MAC is encouraged by the outcome and appreciates all the advocacy efforts by our counties across the state,” added Executive Director Stephan Currie. “Your engagement efforts were invaluable. The Legislature’s decision to prioritize stability for counties as essential partners in delivering services to residents across the state is notable.”
Gov. Gretchen Whitmer must still sign the budget bills to make them official. She is expected to do on Tuesday.
For more information on the budget, contact Deena Bosworth at bosworth@micounties.org.
Road package brings major dollars for counties
A long-term road funding plan has been enacted after a series of budget implementation bills were passed to establish new revenue sources dedicated solely to roads.
Legislation to establish revenue includes a wholesale tax on marijuana, decoupling of state and federal business taxes, preservation of insurance provider tax, and the redirection of sales tax at the pump to be used solely for roads.
House Bill 4951, by Rep. Samantha Steckloff (D-Oakland), establishes the Comprehensive Road Funding Tax Act. The bill imposes a 24 percent excise tax on the wholesale price of marijuana, creates the Comprehensive Road Funding Fund (CRFF) and determines distribution of the revenue between the CRFF and the Neighborhood Road Fund (NRF). HB 4951 would increase state revenue by approximately $420.7 million per year, with $3 million directed to the CRFF and any remaining revenue into the NRF for fiscal year 2026. Beginning in FY27, $500,000 will be earmarked for the CRFF and the remaining revenue will be directed to the NRF. Beginning in FY 2027-28, the CRFF earmark will be adjusted for inflation.
House Bill 4961, by Rep. Ann Bollin (R-Livingston), enables the decoupling of state and federal business taxes as a result of the One Big Beautiful Bill Act and establishes no tax on tips, overtime and Social Security. House Bill 4968, by Rep. Greg VanWoerkem (R-Ottawa), preserves a form of the insurance provider tax. House Bills 4180–83 implement a fuel tax swap beginning Jan. 1, 2026.
Revenue established in this legislation and directed to the Neighborhood Road Fund (NRF) is as follows:
- $459.5M increase to MTF with already established Public Act 51 distributions
- $1.1B to NRF and allocated to:
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- $100M to local bridge advisory board
- $40M to local grade separation fund
- $35M to CTF/transit
- $65M to the Infrastructure Projects Authority Fund, a state-run grant program
- Through FY30, with an estimated $865M remaining, 52% of which will be allocated to county road commissions
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MAC supports the Transportation Funding Package.
For more information on this issue, contact Samantha Gibson at gibson@micounties.org.
Macomb’s Wallace takes over as MAC President; 7 board seats filled at Annual Conference
Macomb County’s Antoinette Wallace acknowledges the crowd after her inaugural speech as MAC’s 117th Board President on Oct. 1.
“Together, we will continue to push forward with unity, courage, and vision. Our work will not always be easy, but it will always be meaningful. Because when counties succeed, Michigan succeeds.”
With those words, Antoinette Wallace of Macomb County challenged county leaders during her inaugural address as MAC’s 117th Board President on Oct. 1.
Wallace delivered her remarks after taking the oath of office during the President’s Banquet at the 2025 Michigan Counties Annual Conference in Grand Traverse County.
About 300 county officials and others attended the three-day event at the Grand Traverse Resort, during which MAC held elections for its Board of Directors.
Joining Wallace in leading the Board for 2025-26 will be Bryan Kolk of Newaygo County as first vice president and William Miller of Oakland County as second vice president. Wayne County’s Melissa Daub ends her presidential year and moves to the role of immediate past president.
In caucuses earlier on Oct. 1, commissioners filled seven seats on the 16-member board:
- Region 1 – Joe Derocha of Marquette County was elected
- Region 3 – Phil Kuyers of Ottawa County was elected
- Region 4 – Monica Schafer of Ingham County was elected
- Region 5 – Antoinette Wallace of Macomb County was re-elected
- Region 6, Seat A – Lisa Salgat of Arenac County was elected
- Region 6, Seat B – Jay O’Farrell of Iosco County was re-elected
- At-large – William Miller of Oakland County was re-elected
Materials from the conference, including slide decks from the 10 policy workshops for county leaders and photos, will be placed on the MAC website next week.
“With all of the recent budget struggles in Lansing, it was good to see a spirit of bipartisanship and a determination to address Michigan’s policy challenges among the members attending this week,” said Stephan W. Currie, MAC’s executive director.
MAC’s next conference is the 2026 Legislative Conference, April 27-29 in Lansing.
New help available on properly spending opioid settlement dollars
With upcoming changes to the Michigan new State-Subdivision Agreement, as part of the Purdue and Sackler family opioid settlement process, it is critical for local governments across Michigan to continue to critically assess each allocation and expenditure.
Changes to the State-Subdivision Agreement will include the ability for counties to seek general guidance from the Michigan Department of Attorney General on use of funds. With the new ability to ask about specific expenditures, local governments are encouraged to reach out to the Michigan Department of Attorney General at ag-opioidlitigation@michigan.gov with any expenditures for which they are uncertain about allowability.
Local governments can also reference the lists of unallowable uses provided by numerous states across the country (Michigan may see a similar document in the future):
- California (page 4)
- Indiana (page 4)
- Kansas (page 36)
- Pennsylvania (scroll to items under “Exhibit E”)
- Virginia (bottom of page 1 and 2)
MAC also can assist with helping counties determine alignment with Exhibit E and the legal definition of opioid remediation. For such assistance, contact Amy Dolinky at dolinky@micounties.org.
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