Budget taking shape: Road funding deal announced but counties must stay alert
On Thursday evening this week, the Governor’s Office, House and Senate announced a $1.85 billion road funding agreement that represents a breakthrough in Lansing’s long-running debate over infrastructure. While this agreement is an important milestone, the state budget is not yet complete — and county statutory revenue sharing remains at risk.
What’s in the road funding deal
The agreement includes:
- $1.5 billion of the deal will go to local roads
- A new 24 percent wholesale excise tax on marijuana (estimated to generate $420 million annually).
- Redirecting all state gas tax revenue exclusively to road funding.
- Defunding Michigan’s corporate grant program that had supported major development projects.
- A commitment that tax increases must be matched dollar-for-dollar with spending cuts.
What it means for the budget
While the deal clears a major hurdle, budget target numbers have not yet been finalized, and Speaker Hall has acknowledged that the FY 2026 budget will be smaller than last year’s.
The House passed several bills to align the budget with the agreement, including:
- House Bill 4951: Creates the marijuana wholesale excise tax.
- HB 4968: Seeks a federal waiver to preserve provider tax revenue during OBBBA implementation.
- HB 4961: “Decouples” Michigan from federal OBBBA tax changes, avoiding an estimated $540 million revenue loss.
What counties need to know
Even with progress on road funding, the big question for counties remains statutory revenue sharing. This agreement does not resolve the threat of cuts.
MAC has made clear to legislative leaders that any cuts to county revenue sharing would be devastating after years of chronic underfunding.
We urge county commissioners to:
- Review MAC’s action alerts and talking points that have already been distributed.
- Contact your representatives and senators now and tell them to protect county revenue sharing.
- Remind lawmakers that counties provide essential services — courts, jails, elections, public health, and more — that cannot be maintained at current levels if funding is cut.
The Oct. 1 budget deadline is rapidly approaching. Now is the moment for counties to stand together and make our voices heard. MAC appreciates actions by many counties to pass resolutions opposing cuts to revenue sharing, including Baraga, Chippewa, Delta, Iosco, Manistee, Montcalm, Ontonagon and Sanilac.
For more information, contact Deena Bosworth at bosworth@micounties.org.
Podcast 83 recaps mental health event, stalled budget situation
MAC’s participation in a press conference last week to draw attention to a state plan that threatens local public control of mental health services was one of several topics discussed in this week’s episode of Podcast 83.
The event was designed to showcase opposition to the PIHP RFP process, started by the Michigan Department of Health and Human Services, to alter oversight of community mental health services. MAC First Vice President Antoinette Wallace was among local leaders to speak.
“We’re hoping this press conference is going to get a little bit more traction here in the press,” said Jimmy Johnson, governmental affairs specialist. “And we’ll be able to start putting some pen to paper and getting some changes.”
Of course, the news in Lansing continues to revolve around the Legislature’s inability to adopt a fiscal 2026 budget.
“We thought they were really getting close,” said Governmental Affairs Director Deena Bosworth. “And then we heard today (Sept. 22), it all fell apart. The devil is in the details. … They (have to) decide they can’t live with one thing or another and they have to dig in their heels. So here we sit a week out. We don’t have a budget. We’re not in great shape. We’re not in terrible shape, but we’re not in great shape. And everybody’s preparing for a government shutdown.”
For more on the budget situation, watch the full episode by clicking here or on the image above.
Staff picks
- Michigan State Capitol’s historic glass floor undergoes major restoration (WILX)
- Will a tiny reactor someday power your town? (Governing)
- Trump cancels trail, bike-lane grants deemed ‘hostile’ to cars (City Lab)
- Should states ban food dyes and additives? (National Conference of State Legislatures)